How favela tourism is tackling Brazil’s poverty and inequality

If you ask the average Brazilian what’s wrong with their country, they will probably respond with two words: corruption and inequality. And they wouldn’t be wrong. Brazil is the most unequal country in South America as of 2017 (its six richest men have the same wealth as the poorest 50% of the population), and political corruption scandals are largely to blame for its recent recession, which has been the worst on record.

Corruption and inequality clearly go hand in hand, creating and perpetuating a super-elite who live among the sidelined, struggling majority. 

Nowhere is this majority more visible than in the country’s favelas. Rio de Janeiro alone officially has 763 of them, housing nearly a quarter of the city’s population. The word “favela” cannot be translated into “slum”, “ghetto” or “shantytown”, because it is a unique Brazilian phenomenon.

While many of the stereotypes of the favelas – gun violence, drug dealing, poverty – are at least partly true, they are also home to 12 million Brazilians generating R$38.6 billion (over £7bn) per year.

Wage growth over the past twenty years has been significantly higher in the favelas than elsewhere in Brazil, and they are becoming increasingly gentrified. As of 2013, 65 per cent of favela dwellers were middle class. One of the first to be pacified, Vidigal, is now one of the most developed and wealthy favelas, home to hostels, bars, clubs and even a renowned sushi restaurant selling passionfruit sashimi.

Despite the enormous economic potential, stigmatisation of the residents, pejoratively labelled “favelados”, makes socioeconomic development challenging. While many residents fly under the governmental radar tax and regulation radar, they also suffer from the lack of government when it comes to public services. Residents generally have the worst schools and public transport in the city, and some favelas don’t even have necessities such as sewers, roads and medical clinics.

With crippling bureaucracy, widespread corruption and an economy that’s only just pulled itself out of a recession, making a life for yourself anywhere in Brazil is hard. But for a resident of a favela, someone living literally on the margins of the city in an area founded by ex-slaves, it is even more challenging.

The residents of favelas are trapped in a vicious cycle of social stigmatisation and economic exclusion, one perpetuating the other. To effectively raise the quality of life in the favelas, one cannot be alleviated without the other.

Adam Newman, an American who moved to Vidigal seven years ago, founded his tourism platform Favela Experience on exactly the belief that the social and economic marginalisation must be tackled together: “Tourism in Rio de Janeiro is the second-largest producer of GDP, second only to oil,” he says. “A third of people live in a favela in Rio. But if we look at the revenue from tourism actually going into the favelas, it’s basically zero, which is not hard to believe when you look at the greater scheme of institutionalised racism in this country.”

Newman defines Favela Experience as a social impact tourism company, distinct from “poverty tourism” which originated in the 19th-century East End of London and is now associated with tours around the slums of India, townships of South Africa and the favelas of Brazil.

While such tours at best break down stereotypes and connect people from different backgrounds, they typically do nothing economically for the actual residents: practically all the tour operators, NGOs or guides who run these tours are based outside the slums.

For the profits of tourism to in any way empower the favelas, respectful and contextualised tourism needs to somehow tie itself to entrepreneurship, with tourism being the leg-up that enables residents to start building their own enterprises.

Favela Experience aims to do just that. The locals, running their own tours, receive the majority of revenue, and a portion of the profits the company makes goes to its sister NGO, Favela Inc, which incubates start-ups in the favelas. The company is closing its first round of incubation for start-ups ranging from an ex-trash dump turned agroforest and eco park to an artisanal brewery. In fact, tourism has been so effective at generating wealth that the average “incubee” makes a minimum wage salary from working only two hours a week.

Newman says that every tourist leaves the tour with a radically different perception of favelas. “The majority of people believe that favelas are only violence and drugs … And without glamorising favelas, the reality is that the majority of the community is made up of creative, inspiring, motivated citizens who are just trying to live a good life.”

It is clear that Brazil has enormous potential to reduce its poverty, corruption and class and race-based inequality. But for this to happen, favela residents need to be part of that story. This kind of socially conscious tourism may just be the place to start.

Written by Amelia Stewart

Amelia Stewart is a former Research Associate at The Entrepreneurs Network.
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