Life in Brazil's favelas

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MARCO WERMAN: Brazilians elect a new president this weekend. Their outgoing leader, Luiz Inacio Lula da Silva, is hugely popular. Lula boasts that during his eight years in office, millions of Brazilians were lifted out of poverty. That includes those living in some of Rio de Janeiro's notorious favelas. Reporter Jason Strother recently visited the Rocinha favela and sent this story.

JASON STROTHER: The line at Banco Caixa spills out onto the street. 48-year-old Jose Wilson is waiting to use the ATM. Wilson sells fresh coconut milk, and he goes through about 140 coconuts a day in the summer. He makes about 600 dollars a month, twice Brazil's minimum wage. Wilson says he's getting some cash to buy more coconuts.


STROTHER: He says �it's really great that the bank's here. I don't even have to leave the favela to go to the bank.� Wilson isn't the only one who's making money in Rocinha. According to government figures, there are 5,000 locally owned businesses here. Some residents say movies like City of God or tours that highlight the poverty and drug trafficking in Brazil's favelas don't give the whole picture of what life is like here. Eduardo Casaes is a lifelong resident of Rocinha and serves as a liaison between his community and the Rio government.


EDUARDO CASAES: People think that there are only dirty and uneducated people here, he says. But we have jobs, it's really a middle class neighborhood. People go to work and children go to school here.

STROTHER: Casaes says the main problem with Rocinha and other favelas is their infrastructure. Buildings are dilapidated and the streets are narrow and clogged with motorbikes and pedestrians. But some business owners say Rocinha's layout actually works to their advantage. Carlos Roberto de Azevedo owns two minimarkets in the favela.


CARLOS ROBERTO DE AZEVEDO: There are a lot of opportunities for various types of businesses, because it's a very concentrated area with many people walking around. There's a lot of demand for different types of businesses.

STROTHER: There are other not-so-legitimate benefits of doing business in the favela. Many people tap into the power grid and get their electricity for free. And since all shops run on a cash only basis, business owners often get out of paying taxes. Tax complications are one thing that prevents more outside businesses from opening up in favelas, says Andrea Gouvea Viera, a city official working closely with the Rocinha community association. But she says the interest is there.

ANDREA GOUVEA VIERA: More companies are willing to go to these, the consumers. But we still have a problem, that's the security, and we still have a problem with the trafficked drugs.

STROTHER: Viera says when shops open up in Rocinha, the owner usually gets a visit by a drug trafficker middleman. The owner has to promise not to cooperate with the police. But minimarket owner Carlos Roberto de Azevedo says that shouldn't prevent outsiders from setting up shop here. He points out that a Brazilian franchise restaurant opened up a while ago and it hasn't had any problems.


DE AZEVEDO: It will help the favela's image if more businesses come here. Nothing bad has happened to the restaurant, it's never been robbed. Companies and banks need to stop being afraid of opening businesses here.

STROTHER: Azevedo says, the way he sees it, as more businesses from outside Rocinha move in, the favela becomes like any other neighborhood. For The World, I'm Jason Strother in Rio de Janeiro.