A view of downton Rio.

Rio pride took a nosedive in 1960 when the capital was moved to the futuristic new interior city of Brasília. Four years later, Brazil became a dictatorship, and because Rio had always been politically progressive, the authoritarian powers did all they could to diminish the city. Rio had been a federal district on the order of Washington, D.C., or Mexico City, but it was folded into the surrounding, undeveloped state for administrative purposes. Business shifted increasingly to São Paulo, which also eclipsed Rio in population; Rio was deindustrialized; violence threatened the rich and poor as drug gangs fought one another and a corrupt police force. Inside the favelas, everyone had a gun. Rio’s murder rate escalated; innocent people got caught in the cross fire. Even in the Zona Sul, street crime became ubiquitous. “If you were poor, you were scared of the police; if you were rich, you were skeptical of the police,” said Roberto Feith, Rio’s leading publisher. Some policemen formed unofficial militias, protection rackets within favelas and slums that were hard to distinguish from the gangs they ostensibly controlled.

During that dark period, Brazilian pride found an outlet in soccer, which Brazilians talk about much as the English talk about the weather; it is their default topic. We spent our first nights at theCopacabana Palace, as grand as the Fasano is chic, where Paul McCartney was also staying, which meant that a mob of avid, graying fans was permanently installed on our curb, improvising enthusiastic, tuneless variations on “Sgt. Pepper’s.” The biggest news, however, was that McCartney had taken over Engenhão, which is acting as the city’s main stadium while Maracanã is being renovated for the Olympics. The game we went to had been relocated to a more antique, crowded facility. The solidarity of fans transcends other differences: we had fancy seats, but the fun was clearly over on the cheap side, where rich and poor spectators were living the game as intensely as the players who were playing it.

Given the centrality of sport to the Brazilian psyche, it’s no surprise that the World Cup and the Olympics should have inspired Rio’s leadership. For the first time in half a century, local, state, and national officials are working in sync. In 2008, the secretary of security for the state, José Mariano Beltrame, introduced the Unidade de Polícia Pacificadora (UPP), a new force of younger officers under the aegis of the military police rather than of corrupt local bosses. Beltrame announced plans to pacify the favelas, one by one, as well as the slums in the west of the city. The toughest favela was invaded almost as an act of war, using airpower, the army, and the marines. Once that was done, the government instituted a sort of Marshall Plan to provide the fabric of a civil society. The police stayed on as a force devoted to protecting the citizens of the favelas, rather than to protecting the residents of the Zona Sul from the favelas. They’ve pacified only 68 of the approximately one thousand favelas, but there are now 283,000 people living in these areas.

Pre-Beltrame, there was a reactive police presence, sporadic dominion in response to particular acts of violence; now, the UPP ensures a proactive peace. The fantasy of the right was that crime could be suppressed by escalating brutality; previous efforts in the favelas were conquests, with the entire citizenry treated as enemy combatants, so that extrajudicial killings were considered casualties of war. The fantasy of the left was that violence was the product of a flawed social structure and would evaporate if injustice were resolved; it manifested in limp social programs and a proliferation of NGO’s. The right was troublingly violent, and the left was troublingly complacent. The genius of Beltrame’s process is that it satisfies both sides. The right is thrilled because crime is down; the left is thrilled because social justice is achieved. The rich are safer, and the poor are richer.

A frenzy of construction precedes any international mega-event, and Rio natives—Cariocas—are fiercely opinionated about the rejuvenation of historic sites: the Maracanã soccer stadium, which is either being ruined or being saved, and the Hotel Gloria, which is getting a face-lift from billionaire Eike Batista. The Theatro Muncipal, modeled on the Garnier, in Paris, has just been refurbished. “In Rio now,” said biographer Luciana Medeiros, “it’s like what happens when you fall in love. It’s a sparkle. One of the most symbolic things about Rio was that the street was so dirty. All of a sudden, everybody takes care.”

While most cultures have created fashion and then found models to show it off, Brazil produced models and then started making fashion to clothe them in. “They need to look good with their clothes on,” Sergio Mattos, owner of one of Rio’s biggest modeling agencies, told me. “But for Rio’s beach culture, they have to look good with their clothes off. We have the world’s only fashion industry without eating disorders.” Along the edge of the beach, there are endless bars serving juice freshly pressed from fruits you’ve never heard of. There are lifeguard stations to keep the beach safe for swimmers and free open-air gyms where body-conscious Brazilians can improve their muscle tone. The Brazilians have a very keen sense of beautiful bodies, and almost no sense of unbeautiful bodies. The great-looking people wear skimpy swimsuits (including those they call fio dental: dental floss) a little boastfully, attracting admiring gazes; the people who are old and fat wear equally tiny trunks without a hint of self-consciousness. So much of fashion is about disguising yourself, and Brazil is a singularly undisguised place. When I went to meet the mayor in the beautiful, Baroque city hall, half the people there wore flip-flops.

The city’s street life has been reborn now that the streets are relatively safe, and there are whole neighborhoods given over to the fun between dusk and dawn. The center of nightlife is glamorously seedy Lapa. In the small hours, music pours out of every other door; the caliber of décor of any particular spot and the quality of the musicians who play there are unrelated, so you have to pause and listen up and down the street before choosing where you want to go. Many of the venues seem both historical and transient, as though they were built to be temporary but survived into permanence. We decided to check out what appeared to be a small chapel, its walls crowded with devotional images, only to find that it was a tiny bar, presided over by a middle-aged transgender woman who had moved to Rio from Minas Gerais, in the east. She offered us a liqueur of her home state, hot and redolent of cinnamon, and told us howlingly funny tales about figuring out her gender identity on a farm in the jungle. It’s not only the sun that’s warm so close to the equator; friendship happens fast in Rio, and you continually find yourself in intimate conversation with people you’ve just met. They, in turn, eagerly introduce you to their friends—some of whom they’ve just met themselves—and after a few nights, you are juggling invitations to parties, dinners, rain forests.

One such new friend invited us to an early-evening samba party. People often gather to play music informally; anyone can bring an instrument and join in. Ours was in a downtown area where it attracted both businessmen on their way home from the office and favela residents on their way to clean those offices. Musically and socially, improvisation was the style. The musicians stopped only once, to announce sternly that the smell of marijuana was likely to bring in the police. Two ample women from Bahia were frying acarajé, delicious fritters of seafood and black-eyed peas, and the local bar was serving caipi-rinhas in plastic cups. Rio is not Rio without a sound track; music salts all the other senses.

“At the end of the 1980’s, among 188 countries listed by the IMF, only one was a more closed economy than Brazil, which was Myanmar,” economist André Urani, editor of Rio: The Turning Point, told me. Fernando Gabeira was first known as the kidnapper of the U.S. ambassador to Brazil in 1969, as part of a protest against the dictatorship; he ran for mayor of Rio in 2008 and lost by less than one percent. “Since the dictatorship, Brazil has become steadily more present in the world,” he said, “and the world has become steadily more present in Brazil.”

“The change is pervasive,” said Maria Silvia Bastos Marques, the former head of Latin America’s largest steel company who is running the business side of the Olympics for the city. “For years, everyone drove a bulletproof car,” she said. “Now people are rolling down their windows: Rio de Janeiro is not going to have any more areas where the citizens cannot go.” Gabeira told me, “Security is an impression as much as it is a reality. If people think things are better, they are better.” Optimism is as contagious as despair.

Some tourists choose to stay in hostels in the favelas; travel companies offer safari-like favela tours; the new Museu de Favela is one of the most dynamic spaces in Rio. There seems to be consensus that the favelas must be preserved. If you give the people land rights, will they not sell off their land so rich people can have the views? Brazil remains one of the most unequal societies in the world, a place, as one upper-class Brazilian said to me, of “cultural inclusion and social exclusion.”

The World Cup and the Olympics may help to resolve these tensions. Bastos worked to renegotiate Brazil’s international debt with the IMF in the early 1990’s, which spurred internal economic recovery, and she believes that the Olympics will provide a similar “occasion to get our house in order.” Mayor Eduardo Paes told me, “Look, Barcelona was reborn from the Olympics; Athens was nearly bankrupted. It’s not easy, what we need to do. The way I see it, we can let the Olympics use the city, or the city can use the Olympics to achieve permanent goals.”

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