Favela Economic Vitality Often Overlooked

RIO DE JANEIRO, BRAZIL – Brazil’s favelas are often associated with violence and deprivation, but recent research carried out by Data Favel and Locomotiva Institutes points to the often overlooked economic vitality of these neighborhoods.

When combined, the country’s favelas count 13.6 million residents, just below the total population of the state of Bahia. And with economic activity per year put at R$119.8 billion (US$30 billion), this means Brazil’s favelas move a greater quantity of money than 20 of the 27 Brazilian states.

Celso Athayde, CEO of Favela Holding and founder of Data Favel, wishes wider society would recognize the potential of these communities and encourage further economic development in these areas. Despite this survey, Renato Meirelles, president of the Locomotiva Institute, points out that in favelas opportunities for good employment are generally quite limited.

The research also shows that 89 percent of favelas are in capital cities and their suburbs. Rio de Janeiro is the only city in Brazil’s Southeast with more than ten percent of its population living in favelas, a rate that is closer to that of the North and Northeast, with Pará, Maranhão, Amazonas, and Pernambuco also having above ten percent of residents living in favelas.

Research also showed that 49 percent of households are led by women, that 87 percent of adults have access to the Internet at least once a week, while this figure rises to 97 percent when it comes to young people. 69 percent of residents of favelas have bank accounts, and most of these are in traditional banks, though there is rising use of digital banking too. The 31 percent who don’t have accounts are the poorest and youngest residents.

In favelas there is a clear preference for purchase in physical shops, with a minority of 39 percent buying products online. Increasing use of online services is limited by delivery issues, with a third of those who buy online saying they have trouble in getting goods delivered.

Residents of favelas are also generally optimistic about their personal lives, but much more pessimistic when it comes to their opinion of public life. 80 percent are optimistic about their finances and health respectively; 84 percent with family life; and 76 percent with their professional life.

However, 43 percent believe the Brazilian government will get worse; 39 percent that public security will worsen; and 38 percent that public health will get worse. These views are reflected in a tendency toward self-reliance among favela residents: 64 percent of those interviewed say they depend on themselves to improve their lives, while five percent believe the federal government can help and just one percent that the local mayor will help.

This research was requested by Comunidade Door, whose CEO Leo Ribeiro said that the goal was to show to the rest of Brazil the economic potential of these areas and their residents.