More than for its superlatives, Brazil stands out for its regional and social disparities. Brazil is noted for having one of the most unequal income distributions of any country. In the rural Northeast (Nordeste), there is poverty similar to that found in some African and Asian countries. Although increased urbanization has accompanied economic development, it also has created serious social problems in the cities. Even the wealthiest cities contain numerous shantytowns called favelas. In Rio de Janeiro, the government has little control over the favelas, which are dominated by gangs that control informal gambling (a numbers game called jogo do bicho ) and drug trafficking as well as influence local politics.
Many poor people, without access to financing, find it necessary to build their own houses. The favelas on the hills of Rio de Janeiro are one well-known type. In other parts of Brazil, shantytowns on stilts are built over water (alagados ), or in marshy areas (baixadas ). In 1991 there were 3,221 medium- to large-size favelas (each with more than fifty-one households), which contained 2.9 percent of the country's households. The largest favelas, such as Rocinha in Rio de Janeiro, are home to hundreds of thousands.
The National Sanitation Plan (Plano Nacional de Saneamento--Planasa) of the 1970s did not keep pace with rapid urbanization in the development of safe drinking water supplies and waste disposal systems, particularly evident in the precarious metropolitan peripheries and favelas. Between 1988 and 1993, 87 percent had access to piped water and 72 percent to sewerage and waste disposal services, yet a 1989 study by the IBGE (Brazilian Geography and Statistics Institute) revealed that 92 percent of the municipalities did not treat domestic wastewater and only 27.6 percent of dwellings in a Northeast metropolis were linked to a sewerage system that passed quality standards.
Municipal services, including infrastructure, education, and health, have not traditionally reached these favelas, as they have not traditionally been zoned as official parts of the City. However, the Morar Carioca Program, also called the Municipal Plan for the Integration of Informal Settlements, aims to provide integrated development and services through the Municipal Secretary of Housing (SMH) to incorporate these areas into the more formal communities that they generally border. Through holistic urban planning, re-zoning, infrastructure upgrading, housing improvements, regularization of land tenure, City services extensions, and concentrated monitoring, this priority of the Rio de Janeiro city government aims to formalize all of the City's favelas by 2020. In the first phases of the program, communities nearest to Olympic and World Cup sites and transportation routes will benefit from planned interventions in sanitation, transportation, health, education, and housing as appropriate.
Rio de Janeiro has over 1,000 favelas. Since the early 1980s, nearly every Rio favela was controlled by violent drug gangs or criminal organizations who operated outside the rule of law. Favelas became a de-facto safe haven for criminal elements. Senior civilian leadership prohibited police from entering the favelas. Criminals filled this power vacuum and ensured that for nearly 30 years criminal organizations controlled large areas of Rio de Janeiro. Armed drug gang members, many only teenagers, walked openly with shoulder weapons without any fear of police action.
The favelas of Brazil are plagued by a constant state of conflict and tension that has been described as a sort of “ordered disorder” or purposeful “insecurity” provided alternately by the state police, local drug traffickers, and local community leaders. Favelas developed as a form of affordable low-income housing, in response to the growing need for cheap labor in Rio de Janeiro. Officially illegal but tolerated by the state due to the labor they provided, favelas were seen as acceptable so long as they remained invisible. This invisible status granted by the state laid the groundwork for favelas to develop into the most “visible and tangible form of the violence used by the state” against Brazil’s urban poor.
Drug Trafficking Organizations (DTOs) have emerged as important informal institutions in Latin America. DTOs in Brazil took root with the introduciton of the drug trade in the region in the late 1970s to early 1980s. Sustainability in the Brazilian case study is attributed to the DTOs' capacity to become entrenched in favela (poor urban) zones. Analysis of the case studies reveals divergent paths and characteristics of DTOs. In Brazil, the absence of internal conflict and the emphasis on illicit distribution (retail) in Brazil resulted in the DTOs focusing on controlling points of sale and internal, informal governance within the favela zones.
Rio de Janeiro’s police force see themselves as providers of order for the greater population of Rio, justifying their violent containment and repression of drug activity in favelas as necessary for the greater good. This reinforces “criminal legitimacy”: as police violence became pervasive enough to seem arbitrary, local residents turned to drug traffickers as de facto community leaders. Local drug gangs provide “a parallel or alternative rule of law” that settles local concerns due to a lack of resident faith in the police.
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