After Bit of Daylight, Darkness Falls on Brazil’s Slum Dwellers

Hard times have returned to Jardin Jacqueline, whose 5,000 inhabitants again are worried about food, jobs and other basics of survival.

It seems difficult to believe now, but just a few years ago people in the favela, or slum, breathed easier. They could even afford an exotic luxury: bricks.

The neighborhood’s low-slung skyline is a monument to the relative boom of consumption that poor Brazilians enjoyed after the end of hyperinflation in 1994. Maria Jose Santana’s family was one of many who saved enough money to replace wobbly shacks with brick homes that now fill the shallow urban valley.

“I got rid of that wood shack, and a good thing too, because the rats were almost as big as me,” Santana said. “We worked hard and built ourselves a new house in 15 days.”

But months of accelerating economic crisis produced a devaluation in January of the Brazilian currency, the real. The buying power of meager salaries shrank, and the prices of meat, rice and other staples increased, conjuring ghosts of the past. Santana’s 44-year-old husband lost his job in a tire-repair shop and can’t find a new one.

“Every day he gets up at 5 a.m. and goes looking for work,” said the chubby, animated mother of four. “He walks all day. Sometimes he comes home with his feet all bruised. But he can’t find anything. There’s too much competition. You have university graduates working as doormen.”

The devaluation three months ago stirred worldwide fears of a Brazilian economic catastrophe with destructive international repercussions. And it aggravated worries in Brazil that the tens of millions of people who had been lifted out of dire poverty would be pushed back down.

The question now is: How hard will times get?

There is little doubt that working people are suffering. But Brazilian reality often defies analysis. Only weeks after doomsday scenarios filled the headlines, officials insist that the macroeconomic picture appears brighter. The stock market has posted record gains, reversing months of headlong capital flight. The currency has stabilized, and spiraling inflation has not materialized. Unemployment has dipped slightly.

“We had a devaluation, which should be the worst of the worst, but I don’t know what to think, because the impact hasn’t been as bad as I thought,” said economist Marcelo Neri of the government-affiliated Institute for Applied Social Research. “I think it will be bad for income distribution, but expectations are at a turning point now.”

The recent optimistic noises at the macroeconomic level, however, do not make much of an echo in the street. A new poll by Brazil’s Vox Populi Institute shows that 53% of Brazilians think the worst of the crisis is yet to come.

As far as leftist opponents of President Fernando Henrique Cardoso are concerned, cities are on the verge of the civil unrest and politically charged violence that erupted in rural areas during Cardoso’s first term.

“The explosion already happened in the countryside, and the urban explosion is coming, because the poor in the city don’t have the survival strategies they have in rural areas,” said Silvio Caccia of Polis, an urban public policy institute here. “The government doesn’t have the resources to help the poor. Neither does the middle class.”

During a two-year period between 1994 and 1996, according to Neri’s institute, the poorest half of the nation’s 169 million people experienced a 55.5% increase in their incomes, compared with a 22.8% rise for the richest 10% of the population. “The economic cake grew, and poor people got a bigger piece,” Neri said.

Since 1996, however, the income gain of the poor half of the population has been only 36%. Aggressive public sector budget cuts and unemployment that rose to 8%--the highest level in the decade--have further darkened the outlook for the poor.

The devaluation has been particularly painful for the service sector and low-skilled workers. In Jardin Jacqueline, men tend to work as construction-related day laborers and women as domestic servants. Among residents in the 16 houses on Santana’s block, only three men have jobs. Maids are being laid off by middle-class households.

Makeshift street stands proliferate in the favela, as everybody tries to sell something on the side: hot dogs, cakes, cigarettes. The big-money allure of the drug trade keeps growing.

“We’re worried enough as it is,” Santana said. “Can you imagine if it gets worse?”