The Rise of the Favela

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The Latin American Monitor (Christian Science Monitor) has an interesting post this week about Brazil's rising "favela consumer class." RioGringa, the author, notes that around 65 percent of favela (a term for urban Brazilian slums) residents are now considered middle class. This "C" class, in Brazilian parlance, constitutes about 12 million people--about the size of Illinois or Pennsylvania, the 5th and 6th most populous states in the U.S.--and earn around $28 billion a year, which the author compares to the entire GDP of Bolivia.


Riding a tide of strong national growth and aggressive social development policy under the PT (Worker's Party), favela residents have begun to replace the image of gang-ruled no man's lands with that of a developing, even thriving heart of a Brazilian renaissance. RioGringa points to the increasing access to goods, especially durable goods, for favela residents as an indicator of a growing middle class. Over half of residents now have washing machines and 40 percent have computers. Much of this urban boom comes as a result of easier access to credit, underwritten by government programs like the Growth Acceleration Program or Bolsa Familia.

 

 

This boom in hardware and appliances is stretching an already tenuous infrastructure in many favelas. Touring several favelas in 2009, I remember being overwhelmed by the sketchy mass of cables and wires, jerry-rigged by handy residents to connect their new TVs and washers to the grid (see image). The challenge will be formalizing the tenuous (and sometimes illegal) connections between favela residents and the economy and infrastructure; this means improving access to sewage and utilities, land tenure, and public services like education, health care, and security.

 

 

 

 

 

First Fruits of the Brazilian Truth Commission

Brazil is learning startling truths about what took place during the country's period of military dictatorship (1964-1985). The president of Brazil's National Human Rights Commission (Comissão Nacional de Direitos Humanos) Wadih Damous, demanded this week that along with the thousands of politically motivated tortures that took place under military rule, abuse and torture of the children of prisoners be investigated.

This comes barely a week after the high profile suicide of Carlos Alexandre Azevedo, son of a well known Brazilian journalist. Azevedo was captured with his mother in 1974 and apparently abused by the jailers--to torture his watching mother--when he was not yet two years old. Azevedo suffered from numerous social and psychological traumas as a result of the abuse he suffered as a toddler, apparently never recovering. Other reports of the willingness of Brazilian authorities to abuse the children of suspected subversives have surfaced in recent months, though it is not yet clear if the practice was as systemic as the Argentinian corollary, where children were systematically taken from their parents (who were usually then killed) and given to be raised by members or friends of the ruling junta.

The National Truth Commission (Comissão Nacional da Verdade), established May of 2012, has been looking into disappearances, torture, rape, and other abuses that took place during Brazil's "dirty war" against suspected leftists and insurgents. On Monday, the Commission revealed that it had identified dozens of individuals--mostly military and police officials, but some civilians--who had been involved with certain atrocities.

The Commission has run into strong criticism though, as important segments of the public are strongly resistant to any digging around in the unpleasantries of the past. Many are simply too young or care too little about what they see as relatively minor abuses of a distant past. An estimated 500 individuals disappeared during the twenty year period, while another 9,000 were jailed and tortured in brutal crackdowns. The Commission estimates that approximately 50,000 were arrested in 1964--the first year of military rule--alone. Compare these numbers to the more spectacular horrors of Peru or Guatemala for example where nearly 70,000 and 200,000 were killed, respectively (or tiny Uruguay, where around 200 disappearances had a much more pervasive effect); much of Brazilian society--now a country of around 200 million--was relatively untouched by state violence during the period.

On the other hand, since Brazil passed a military amnesty in 1979 (which was upheld in 2010 by the Supreme Court), no prosecutions will result from the Commission's work. Still, the body hopes to name names, and to provide a deeper and clearer history of what actually happened during this dark period. And, digging up the truth is not just an academic exercise. The history, and especially the personal histories that emerge during this process (the Commission has a two year mandate) could have unimaginable consequences on Brazilian society and politics, not to mention the families and societies that lived them.

It will be interesting to see what the emergence of a (potentially) new collective knowledge and understanding of this period could do for the prospects for justice in Brazil. If the Commission does reveal atrocities or abuse that were, perhaps, more extensive or more heinous than generally accepted, could a civil-social groundswell provide the kind of political momentum to revisit the amnesty issue a la Uruguay and Argentina? Too soon to say, for sure. But, it seems a positive sign that Brazil is dealing with this difficult part of its past. Combined with last year's high-profile corruption scandal (Mensalão), which resulted in 35 convictions in a country that does nearly as well on corruption indexes as it does in the World Cup, the Truth Commission's first fruits, though devastatingly bitter, are a step forward.

Brazil to expand anti-poverty measures

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The Brazilian government announced this week that it plans to expand the program Brazil Without Poverty (Brasil sem Miseria) to provide benefits to about 2.5 million families. The program, launched in June of last year, is a key part of president Dilma Rousseff's initiative to lift millions out of poverty and builds on popular programs begun under Lula's Zero Hunger (Fome Zero) campaign.

Currently, about half of the rural Brazilian population--about 15 percent of the total population--lives in poverty, while around 16 million (eight percent) live in extreme poverty, defined as living on less than about US$44 per day. Poverty in the country is particularly concentrated in the "semi-arid" northeast of the country, where a despite decade of impressive national growth, conditional cash transfers, and other development efforts, much of the population is extremely poor. As a result, Dilma's Brazil Without Poverty program seeks to fill in the gaps left by the popular Bolsa Familia or the Program for the Acquisition of Food, a well-functioning local agriculture development program that has helped bolster the production and sustainability of local agriculture, rather than simply alleviating the ravages of poverty and hunger.

President Rousseff's goal is to reach all 16 million living in extreme poverty.

One of the ways in which this program fills in these gaps is by actively seeking and registering families who are eligible, but have not yet participated in one of several other development schemes:

Active Search (Busca Ativa) is the strategy adopted by Brasil Sem Miseria to find and register all extremely poor families that have not been located yet. Developed in the municipal level, it is implemented by social assistance mobile teams and by the increase in the transfers of Federal Government resources to city governments. Thanks to Busca Ativa, 687 thousand families previously “invisible” were included in the Cadastro Único in its first year of existence, and are already receiving the Bolsa Família and other social benefits.

The government claims it has already lifted around 22 million people out of poverty over the past decade (while it is difficult to distinguish the particular effects of various specific projects from the effects of overall robust national economic growth throughout the period, most scholars who look at Brazil's progress agree that active anti-poverty programming deserves a significant amount of credit).

While the reach and cost of Brazil's development portfolio is impressive (this new expansion will bring targeted social spending via Bolsa Familia to about US$12 billion), its biggest downfalls so far seem to be in providing the infrastructure or follow-through for recipients who receive benefits. For example, with the Bolsa Familia program, evaluators frequently find that where recipients are required to receive medical checkups (especially pregnant women and young children) the clinics that serve the area are often inaccessible and/or under equipped. And, while benefits make it easier to send children to school more regularly, the schools serving poor rural areas in Brazil are often inadequate. Finally, the sheer number of poor Brazilians--urban and rural--make coverage a real challenge; some qualified families are simply left out.

Brazil to monitor Bolivian skies with drones

Brazil and Bolivia are in the final stages of reaching a deal to allow Brazil to operate unmanned aerial drones over the border with Bolivia. According to BBC Mundo, the deal--the details of which will be released only upon final approval--is expected to see Brazil play an increasingly lead role in counter narcotics operations throughout the Southern Cone.

The use of drones in Brazil, soon over neighboring countries' airspace, is increasing in the context of decreased U.S. presence in the region and an increased drug trade through the Southern Cone. In 2008, the Bolivian government kicked out the American DEA following accusations of "political meddling." Over the same time period, research is beginning to show an increasing flow of drugs through Brazilian, Argentine, and Uruguayan ports. Cocaine consumption in the U.S. has declined nearly 40 percent in the last decade, according to government figures, while consumption in Europe has risen. The European market is now nearly the size of the U.S. market, and Europeans generally pay more per kilo for cocaine.

Increased operations along the U.S.-Mexican border and cooperation with Central American interdiction efforts has put pressure on traffickers seeking to bring their product to market--as a result, the European market, and shipping routes from the southern cone (via west Africa) have become increasingly attractive. The notorious "tri-border" area between Brazil, Paraguay, and Argentina, has become somewhat of a hot spot for drug movers, organized crime, and according to some reporting, Hezbollah.

The 14 Heron model drones, purchased from the Israeli firm Israel Aerospace Industries for a total of around $350 million, are capable of flying for 37 hours straight, and can cover over 1000 kilometers.

Bolivian Ambassador to Brazil Jerjes Justiniano said "Bolivia has a very positive view" towards anti-drug cooperation with Brazil. It wasn't clear whether the Brazilians anticipated participating with Bolivia on the ground, when it comes to destroying illicit plantations or laboratories.

Growing Pains(?)

Coming off the nightclub fire in the Brazilian city of Santa Maria on January 27th, Brazilians are facing a kind of collective reckoning reminiscent of what Americans went through after tragedies such as Newtown, Deep Water Horizon, or the 2010 Upper Big Branch mine disaster in West Virginia. The fire, a result of an indoor pyrotechnic display at a nightclub packed way over capacity, resulted in the deaths of now 237, with at least another hundred injured--likely permanently--from toxic smoke inhalation and burns.

This episode helps illustrate the gap between expectation and reality in a society that has come into its own in recent decades. Brazil, the "B" in the BRICS countries--a club of booming economies and rapidly developing societies--has experienced strong economic development, improved education and health indicators, and political transformation. The country's middle class has been growing impressively, and its political leaders have taken an increasingly important role in international diplomacy. The country looks forward to marking its arrival on the world stage with a flourish by hosting both the World Cup of soccer and the Summer Olympics in 2014 and 2016, respectively. In fact, Brazilians were preparing to celebrate 500 hundred days until World Cup kickoff, and their famous Carnival celebrations were to begin next week.

Instead, 22 municipalities have canceled Carnival, and the World Cup countdown celebration was put off.

A country becoming accustomed to "First World-ism" (excuse the expression) then, is rightly shocked and horrified by the needless and preventable deaths of so many. As the dust has settled, it appears that the club should not have been open at all. According to an article in this week's The Economist, the club's public health license and fire safety plan had expired. Whether the club was allowed to continue operating because of a bureaucratic mix up, or perhaps corruption, is unknown. What is clear though, is that despite the fact that Brazilians, especially poor favela-dwellers, experience small scale disasters frequently (landslides, crime sprees, bus crashes, etc.) the scale of this one seems to have changed the conversation around public safety.

This is a "never again" moment for Brazilians.

Brazilian states have a patchwork system of public safety regulations, and local municipalities are responsible for enforcement. Federal standards--introduced in 2007, but not passed--are now more likely to pass the congress. Whether this translates into improved capacity and follow through on oversight is another question.

The Economist notes that Brazilians can be proud of the response by firefighters, armed forces, and hospitals the night of the blaze (notwithstanding reports that security guards initially blocked the club exit thinking that people were trying to dodge paying their tabs). This will be of little consolation to those affected. Hopefully the heartbreak and outrage will be enough to break the inertia surrounding public safety and enforcement, and action will extend not just to college towns like Santa Maria, but to the deepest reaches of urban favelas and rural communities alike.

Latin Ameri--Brazil's Middle Class

The Americas Quarterly's fall issue focused on Latin America's rising middle class: "Who are Latin America's new middle classes and what effect will they have on politics, economics and business?" One article, by the World Bank's Luis Felipe López-Calva, dives into the definitions and origins of this burgeoning middle class, a phenomenon that seems to be (finally) gaining traction/acceptance/notice among among the foreign policy community.

One of the main factors behind this monumental, and welcome (if still tentative) trend is thought to be the consistently high price of raw materials produced by Latin America--Peruvian copper and gold, Brazilian soybeans, etc. But important and substantial political and policy shifts have played a huge role in translating raw wealth (Latin Americans have long exported massive amounts of raw material with profits accruing only to the region's tiny elite--coffee anyone?) into development.

Brazil, a country that accounts for nearly a third of the region's population, deserves a big portion of the credit.  That country's bolsa familia program, a consolidation (and expansion, under Lula) of several smaller conditional cash transfer (CCT) programs that began under Fernando Enrique Cardoso, has played an important part in bringing the poverty rate down from around 44 percent in 1990 to about 24 percent in 2009--nearly cutting it in half.

A close look at bolsa familia shows that this is an impressive, if mixed, program, in terms of outcomes. First, the idea behind the thing is to break the intergenerational cycle of poverty and develop long-term human capital through health care and education mandates. These mandates--for recipients--come in the form of minimum school attendance (at least 85 percent monthly attendance for kids between 6 and 15 years) and vaccinations and medical check-ups, among other things. No medical check-ups? Not attending school? No cash.

The idea behind the "conditionality" of the CCT is two-fold: First, conditionality makes cash cash transfer schemes ("handouts" to some) palatable to voters and policy makers. Second, health, nutritional, and educational conditions are thought to ease the opportunity costs poor people face when deciding whether or not to send a pregnant mom to the clinic or pull a child out of school to work, for example.

The program is huge. It reaches some 46 million individuals (around a quarter of the population). On educational measures, bolsa familia had a clear and positive (if slight) impact, resulting in a 3.6 percent lower probability of children being absent from school, and 1.6 percent lower likelihood of dropping out. At the same time, kids whose families benefit from the program were more likely to be failing school, an indication that progress doesn't come from just showing up, and an indictment on the poor quality of Brazilian schools (especially in the poor and rural northeast).

Unfortunately, the program had similar effects on healthcare attainment. Recipient families surveyed in 2010 were apparently no more likely to have their kids immunized--another indictment of Brazil's failure to provide much of its population with access to good healthcare infrastructure.

The program did better on nutritional measures, yielding significant improvements in infant nutrition (a variable with huge long-term impacts on childhood development),and a 26 percent increased chance of children under 5 years having a normal weight and height.

Not surprisingly, the program has had huge (and less conflicted) impacts on poverty. Between 2003, the year the program began in its current, robust form, and 2008, extreme poverty in Brazil fell from 12 percent to 4.8 percent. Despite the fact that the program suffers from some "leakage" (including individuals and families who should not qualify for benefits) and "exclusion" (not including some who do), over 70 percent of cash benefits reach the poorest 20 percent of the population, with around 95 percent reaching the bottom 40 percent, a subgroup that closely resembles the number of Brazilians living near or under the poverty line. Analysts believe that the program accounts for a major portion of this drop in poverty, and especially, extreme poverty.

And, as a preemptive response to the refrain that handouts lower the incentive to work, consider that labor market participation increased among recipients by an average of 2.6 percent (4.3 percent among women, compared to non-participant counterparts). Stable access to cash also makes people eligible for credit (Brazil has a robust micro-credit culture, evidenced by TVs and refrigerators in the homes of most favela-dwellers), which helps build a stronger domestic market for durable goods. One study estimated that for each real spent, the Brazilian GDP will increase by R$1.44--not a bad bang for the buck.

Latin American economies need to support the development of a robust middle class (not just a class of "not poor, but not middle class yets"), something that can survive economic downturns like we saw in 2008-09. This is good, not just for democracy ("no middle class [bourgeois], no democracy"), but for the lives of millions in the region who have long struggled under the yolk of oppressive poverty and oppressive dictatorships.

China may be good for this trend. While many have some apprehension about China's intentions (China surpassed the U.S. as South America's biggest trading partner in 2010), and worry about Latin America becoming another "China's Africa," they have also shown a willingness to invest in, and provide easy financing to moderate leftist governments working to expand spending on the poor and middle classes. At the very least, their rapid development and voracious appetite for timber, various ores, and agricultural products bodes well for continued investment. Its relationship with some governments (see for example Ortega, Daniel or Chavez, Hugo) and their combined impact on democratic and civil rights are less certain.

Not all China does in the region should make Americans hyperventilate. Yo-yo Ma's Obrigado Brazil might attest to that (Yeah yeah, I know he's American, born in France...).