HABI¹A¹ IN¹¸. Vol. 22, No. 4, pp. 449Ð462, 1998 ( 1998 Published by Elsevier Science Ltd. All rights reserved Printed in Great Britain 0197Ð3975/98 $19.00#0.00 PII: S0197-3975(98)00022-8 Alleviating Urban Poverty in a Global City: New Trends in Upgrading Rio-de-Janeiro’s Favelas AYSE PAMUK* and PAULO FERNANDO A. CAVALLIERIs ‡ *ºniversity of »irginia, Campbell Hall, Charlottesville, »A 22903, ºSA sO¦ce of the Municipal Secretary of Housing, Rio de Janeiro, Brazil ABSTRACT In contrast to the ‘‘eradication and resettlement’’ approach of the 1960s and 1970s, and the implementation of isolated public-works projects in the 1980s, the 1990s in Rio have brought a comprehensive upgrading approach to the favelas. Such local innovations in Brazil began to emerge after the enactment of the 1988 Constitution that gave municipali- ties the power to formulate urban policies and laws at the local level. We examine the FavelaÐBairro Program, in particular, highlighting its five central features: (1) projects designed to integrate favelas with planned neighborhoods (bairros), (2) urban redevelop- ment plans that embody a comprehensive approach, (3) an emphasis on coordination among municipal agencies, (4) utilization of a participatory approach, and (5) the use of private sector firms in executing public works projects. ( 1998 Published by Elsevier Science Ltd. All rights reserved Keywords: squatters; integrated redevelopment; poverty alleviation; Brazil INTRODUCTION Symbols of universal homogenization delivered by transnational flows of capital, culture, and ideas abound in ‘‘global’’ cities in less developed countries (LDCs). On the surface, the central business districts of LDCs appear more closely connected to the world’s financial centers than to their own immediate surroundings. As a result, one hears proclamations of New York or Los Angeles or Miami as the new capitals of the ‘‘Third World’’. In these same cities one also observes, if one looks closer, a sharp polarization in wealth, access to economic opportunities, and quality of life between those who claim a stake in the world’s finance capital and the urban poor (Leaf and Pamuk, 1997). Nowhere in the world probably these contrasts are as sharply displayed as in Rio de Janeiro. The dim lights emanating from the favelas on the hillsides in Rio stand in sharp contrast to the bright lights of Copacabana, the entertainment and cultural capital of Latin America. The increasing concentra- tion and visibility of the urban poor in the ‘‘South’’ (e.g. Rio de Janeiro, Buenos Aires, Mexico City) as well as in the ‘‘North’’ (e.g. New York, Los Angeles, Miami) *Correspondence to: P.F.A. Cavallieri. University of Virginia, Campbell Hall, Charlottesville, VA 22903, USA. 449 450 A. Pamuk and P.F.A. Cavallieri show that both regions have recorded limited success in alleviating urban poverty. Local and homegrown initiatives, on the other hand, o¤er some hope. In this paper, we argue that in order to understand the underlying e¤ects of social and economic disintegration and restructuring in ‘‘global cities’’ such as Rio de Janeiro (manifested physically and socially in its favelas), and in formulating alternative poverty alleviation strategies one must focus on local governments, local actors, and local innovations. We further argue that the institutional changes those local actors design in ‘‘global cities’’ should be analyzed as they evolve amidst local institutional arrangements (formal and informal) but with powerful interac- tions with global factors (e.g. international lending agencies, nongovernmental networks, and even the media). Our analysis is grounded in the case of Rio de Janeiro that exhibits complex interactions between global and local factors that play out in the redevelopment of its favelas (housing settlements of the poor on occupied land). The paper starts with a discussion of the macroeconomic and global context in which favelas have emerged. We discuss briefly various government approaches to the favela in the past three decades in Rio, and their impact on the poor. Then, we focus on a specific municipal initiative that seeks to integrate favelas into the social and urban fabric of Rio since 1993, the FavelaÐBairro (FB) Program, which is being implemented in 90 targeted favelas partially financed with an Inter American Development Bank loan. We outline overall program objectives, financial profile, and discuss issues of operational characteristics, intergovernmental coordination, and citizen participation. We discuss preliminary lessons from the implementation experience, and end the paper by articulating the extent to which the new genera- tion of locally designed upgrading programs, such as the one being implemented in Rio, di¤er from those that were advocated by international agencies in the late 1970s around the world and their potential in reducing poverty while improving living conditions of the urban poor. The data and information to examine these questions come from the FavelaÐ Bairro Program Unit of Municipal Secretariat of Housing, IP¸ANRIO (the mu- nicipal planning agency), and personal interviews with favela residents, planners, and contractors undertaking the upgrading projects in Rio. FAVELAS IN A GLOBAL AND MACROECONOMIC CONTEXT According to United Nations projections, the world’s most highly populated cities in the year 2000 will be located in less developed countries (LDCs). Of the top 16 ‘‘mega cities,’’ two of them, Sao Paulo and Rio de Janeiro will have 22.1 million and 12.5 million people respectively in their metropolitan regions by the year 2000 (UN, 1991). These cities will reach these phenomenal population levels as a result of economic transformations in rural areas that continue to fuel migration to cities (at a slower pace), and subsequent urban population growth. These demographic and economic changes will require new housing areas and redevelopment of existing neighborhoods. Ironically, these cities are already experiencing great di¦culties in meeting the challenges of rapidly expanding cities of the past century. In the case of Rio de Janeiro, nearly 25% of the population currently live in more that 1200 informal housing settlements (573 favelas and 688 loteamentos irregular- es1) with serious infrastructure deficiencies. Many of the inhabitants live in substan- dard conditions without proper sanitary conditions and in unsuitable areas such as steep slopes, riverbanks, and swamplands. Poor physical and social conditions in these settlements significantly reduce the quality of life and economic productivity of the urban poor while increasing their vulnerability (Wratten, 1995). Moreover, in the past 15 years many of them have become privileged territories for drug dealers who defy authorities and spread terror among favela dwellers. While these Alleviating Urban Poverty in a Global City 451 settlements continue to grow (Valladares and Ribeiro, 1994), the national debt crisis, and clientelistic politics (Gay, 1990; Banck, 1986) in the last decade have severely hampered and continue to challenge the municipality’s ability to manage this massive growth. The City of Rio alone (excluding the metropolitan area) is expected to reach a population level of 5.6 million by the year 2000 that will exacerbate already serious infrastructure deficiencies in these settlements. The past several years have brought some improvement in economic conditions in Brazil that is likely to accelerate urban redevelopment in its large cities even further (mostly in informal housing settlements if current trends continue) and will put additional pressures on infrastructure capacity. The management of this pro- cess will require a comprehensive approach to redeveloping favelas, integrating them to the rest of the urban fabric, and building upon community-based institu- tional arrangements already in place in the favelas. The FB program in Rio has begun engaging residents in the design and implementation of upgrading projects, has adopted an integrated urban redevelopment approach, and has secured the cooperation of various governmental agencies (discussed later). To what extent will the FB program, reaching four percent of Rio’s favelas, improve housing and living conditions in these settlements, reduce favelados’ vulnerability, and alleviate urban poverty citywide? The past three decades indicate that macroeconomic conditions played a significant role and will continue to a¤ect the lives of favelados. Brazil’s current situation is rather paradoxical. While it ranks as one of the top 10 countries with the highest GNPs in the world (mainly as a result of the gigantic dimensions of its territory and its rich natural resources), it ranks very poorly in terms of social development (due to polarization of wealth, social inequality, and the extent of absolute poverty). The spectacular national economic growth of the 1960s and early 1970s has magnified regional disparities. More than 60% of Brazil’s Gross National Product comes from only three of its 27 states (Sa8 o Paulo, Minas Gerais and Rio de Janeiro). Polarization of wealth is particularly visible in Rio de Janeiro and Sao Paulo where economic opportunities are concentrated, and where the nation’s most densely populated favelas and loteamentos irregulares are also located. Brazil’s economy has started showing signs of decline following the ‘‘oil crisis’’ in the late 1970s, and continued throughout the 1980s despite the introduction of a set of IMF-financed structural adjustment policies by the government. Looking back, Latin Americans refer