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Businesses Seek a Slice of the Pacified Pie in Brazil’s Favelas

Following the surge of “pacifying” missions in many of Rio de Janeiro’s famed favelas, Forbes’ Ricardo Geromel discusses the arrival of private sector investments and how they may evolve in the future.
February 5, 2013, 1pm PST | Melina Cordero
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Since the launch and installation of Pacifying Police Units in many of Rio de Janeiro’s largest favelas, businesses that once dismissed the neighborhoods as unstable danger-zones are now strategizing their entry into “untapped markets”.

And these markets, as Geromel writes, are no small matter. In addition to housing a population larger than Portugal’s, a recent survey by Insituto Datapopular found that favelas generate approximately R$ 13 billion each year. With fears of insecurity quelled by the presence of the Pacifying Police Units (UPP in Portuguese), businesses are now rushing in.

Geromel cites the case of Ricardo Eletro, a national retailer that has invested more than R$1 million in a unit in Rocinha, the country’s biggest favela.  In the same neighborhood, another national retailer, Casas Bahia, invested in a 1,400 square meter property.  And, in another of Rio’s smaller favelas, multinational Banco Santander has opened its first branch.

New investments from private sector players, Geromel writes, could bring long-term improvements to social and economic conditions in the favelas.  Geromel cites the case of TenSports Marketing and the Indoor Soccer Federation of Rio de Janeiro, who have recently partnered to sponsor a soccer tournament between several of the city’s favelas. As part of the project, called the “Pacified Rio Cup,” the companies are investing in the construction and renovations of local soccer fields and recruiting local residents to work on-site.

In addition to new sports facilities and temporary employment opportunities, Geromel sees the potential for new sponsorships and marketing initiatives that would bring more money into these low-income neighborhoods. “…thanks to ‘Pacified Rio Cup,’” Geromel writes, “I imagine companies paying large sums and building amazing soccer fields in the favelas in exchange for publicity.”

Geromel aligns his hope for change with those of Rio’s mayor, Edouardo Paes who, in a recent TED talk, proclaimed that “Favelas are not always a problem. Favelas can sometimes really be a solution.” 

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Published on Thursday, January 31, 2013 in Forbes
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