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Market Forces on the Morro | Brasil de Fato


Source: Brasil de Fato

Militarized police state and the incursion of market forces generate new tensions in the slums

By: Gláucia Marinho e Katarine Flor

The story reminded me of the Peruvian economist Hernando de Soto Polar of the Institute for Liberty and Democracy.

De Soto`s main thesis speaks to the means of introducing workers and small entrepreneurs in an informal  economy to a formal system of legal commitments and guarantees, unleashing, he says, “an astonishing ability to wring a profit out of practically nothing (Wikipedia).”

I have always been drawn to this way of thinking — I suppose that makes me a liberal of some sort.

The problem with this model is that in real life, public agents — such as the military police who moonlight as members of militia groups — play a game of public-private arbitrage, subjecting those under their “protection” to redundant fiscal tribute to what amounts to a parallel state. 

This perhaps explains the failure of de Soto`s model in Fujimori`s Peru.

Creating formal legal mechanisms mean little if those mechanisms are subject to corruption, while free market innovations  — the Commission for the Formalization of Informal Property (COFOPRI) — mean little without land reform.

In this case, the disappearance of a local man seen entering a UPP raises questions about the social cost and economic shock of retrofitting the ”hillside” as an extension of the”asphalt.”

The guarantors of peace and order continue to apply the logic of pessoa de bem and pessoa do mal to members of the community they patrol.

The policy of military intervention in the Rio slums, implanted by the Police Pacification Units — UPPs — is completing its first five years. During that time, a new scenario has emerged in the impoverished areas of the city.

The imposition of a militarized police state and the exposure of these areas to the workings of the [formal] market are generating new tensions in the Rio slums.

The rise in rents, the restrictions on leisure activities (no funk dances)  and the criminalization of the community’s way of life have led many to flee the areas without any need for bulldozers or gunfire.

In  Rio de Janeiro, more than 20% of the population live in favelas. This amounts to 1.3 million persons living in 763 communities through which circulates  R$ 13 billion per year.   This value is higher than the GDP of a number of capital cities, such as Florianópolis, Natal and Cuiabá.

“With the installation of the UPPs in the favelas, investment capital can move into these areas with a  level of legal and financial security they did not enjoy before,” says  Universidade Federal do Estado do Rio de Janeiro (Unirio) professor Rodrigo Castelo.

The Market

This has been taking place on a massive scale since the introduction of the first UPP. The market has its eye on the investment potential of buying real estate from residents of these areas.

“The economic power of the favela is considerable,” says  Romualdo Ayres, director of sustainability for the Brazilian Association of Franchising. All told, Brazilian franchises took in nearly R$ 14 billion in 2012.  At the same time,  the GDP  of the favelas amounted to R$ 13 billion.

“The available income of these people is nearly equal to the available income of all the franchises in Brazil,  The drug traffic left behind an economic flow that must now be replaced,” says Ayres.

There are many success stories of entrepreneurial undertakings in the favelas, even before the arrival of the UPPs — Yes, the language school in Rocinha, for example. The branch installed on the hillside has 750 registered students, far more than the average of 550 students of its other campuses in the city. The mass entrance of companies into the favelas is evidence of a financial interest underlying the issue of public safety.  SKY, for example, arrived in Jacarezinho one day before the police did.

According to the state housing syndicate  (Secovi/RJ),  with the creation of the UPPs, Rio has assumed at least one more source of inflationary pressure. In the five years of the UPPs, in some favelas and slums, the price of real estate increased 100% or more.

Along with the cost of real estate, the regularization of electricity  and water, which lacks specific programs for low-income residents, is elevating the cost of living and making it impossible for long-time residents to remain. Currently, the cable car of the  Morro do Alemão receives more tourists than the Sugarloaf Mountain tram. In November 2012, it registered more than twice the visits received by Pão de Açúcar, a traditional Brazilian postcard.

Where is Amarildo?

THe UPP is not just an economic program. Its aggressive stance and its control over daily life, expressing itself as the use of excessive force, has often provoked reactions from residents or friends and relatives who end up criminalized or dead. This year alone, there have been three high-profile cases of this kind.

In March, Mateus Oliveira Casé, 17, suffered heart failure after being electrocuted by a military police officer (PM) from the UPP of  Manguinhos.

In April, Alielson Nogueira, 21, died from a gunshot to the back of his head as he was eating a hot dog, during a confrontation between residents and PMs from the UPP of Jacarezinho.

The most recent case is that of construction worker  Amarildo de Souza, 47, who disappeared on July 14 in Rocinha. Amarildo was returning from a fishing trip when he was summoned by PMs of the UPP who wanted to question him. Amarildo was seen entering the UPP, but to date has not left it.

Demanding to know the fate of Amarildo has become a modestly successful social networking campaign.

Sydney Rezende of Globo.

Police from the Gavea precinct conducted a search on Tuesday in the Port Zone of Rio.

The officers went to Comlurb, on Carlos Seixas Street, but found nothing. Another search was conducted last week in the area known as Dioneia, Hieghts, in Rocinha, based on witness statements, but found no traces of the missing man.

The NGO Rio de Paz will protest today in front of the Copacabana Palace hotel. On Thursday, relatives of the man will hold another protest, in Rocinha, at 18h.


Amarildo Souza Lima, aka “Boi,” disappeared after giving a statement to UPP officers on July 14. There were a  number of protests by residents, who went so far as to shut down the Lagoa-Barra highway twice, on July 17 and July 19. At the outset of the investigation, the PM said it had removed the four officers involved from active duty at the UPP: they will work at desk jobs at the Pacification Police  Coordination office until the conclusion of the investigation.

According to precinct commander Zaccone, investigations are underway. The police  from the UPP of Rocinha, as well as relatives and neighbors of Amarildo have already given statements in the case, which will be handled by the Homicide Division (DH) starting on July 31, 15 days after the man’s disappearance. The case will be handled by the  Missing Persons office of the DH.

Zaccone, says that the GPS of the patrol cars are being analyzed, and that footage from surveillance cameras in Rocinha are being studied. On Thursday, members of the police investigation visited the area known as  Dioneia Heights, where tips were received that Amarildo might be buried, but nothing was found.