Cold War Legacy: Cities in Crisis
By the early 1990s, it was obvious to almost all observers that cities in the less developed world were in crisis. Problems included overcrowding , slums and squatter settlements, shortages of urban services, unemployment and underemployment, environmental degradation, and associated social issues. Traditional urban policy approaches hadn’t provided solutions to the on-going challenges listed above. Nor had the newer neoliberal approach — with its associated downsizing of government, privatization of state owned enterprises, and drastic restructuring of the economy. Instead, as Alan Gilbert asserted:
. . . what seems eminently clear, is that urban poverty will continue to plague every Third World city in years to come. . . . The grandchildren of the urban poor will continue to suffer from social polarization, material deprivation, and political repression. If urban conditions may well have improved in Seoul or Sao Paulo, they may well have deteriorated in Calcutta or Addis Ababa.
The detailed future of the Third World city is in doubt, but there is little reason to believe that the urban poor are about to disappear.
As the cities of Brazil prepare to host FIFA’s 2014 World Cup, Gilbert’s 20 year old statement rings true.
To many, the persistence of poverty and the excessive size of many cities in the developing world are linked, and their challenges remain worrisome. Many of these large cities are known as primates. Primacy is defined as a condition whereby one city becomes so dominant that it keeps other parts of its country from developing. During the early Cold War period, primate cities were linked to the absence of regional or national economic integration. They were thought to be antithetic to the preferred model of balanced economic growth. Apprehension over increasing economic imbalance led some scholars and planners to describe many nations as overurbanized, with cities whose economic base was inadequate to cope with their associated population pressures. According to this perspective, urbanization became deviant any time urban population numbers were out of sync with the Western example. Controversy emerged regarding the most appropriate distribution of urban population among different-sized cities. A related notion concerned “systems of cities” within economically interdependent regions. Overurbanization, some contended, was a term developed for understanding First World urbanization processes and had little relevance to the so-called Third World where the links between economic growth and urbanization were far more varied and complete. Issues of primacy or overurbanization were thought to be dominated by global processes whereby cities were now competing in the world economy. Therefore, primate cities were not a problem. They just needed to be strengthened so that they could be better competitors.
The First World vs. The Third World
Differences between the First World and the Third World emphasize the difficulty in applying a universal model of appropriate urbanization. A look at the income gap between rich and poor countries shows that, in 1950, the average per capita income (in 1980 US dollars) of low-income countries was $164. In 1980, as the failure of past approaches to development were acknowledged, and just when the neoliberalist project came into its own, the same income had risen to only $245. Meanwhile, incomes in rich countries had increased from $3,841 to $9,648. In other words, over a thirty year period, the income gap between rich and poor had increased from $3,677 to $9,403. In terms of total income (gross national product: GDP), the low-income countries declined from 4.3 % of that earned by the industrialized countries in 1950 to 2.5% in 1980. By 1995, the income of low-income countries was equal to only 1.7% of that of the industrialized countries. Particularly relevant in the urban context was the reality that within developing nations there was a growing gap between rich and poor. Nowhere was this more evident than in the urban environment which houses a nation’s most privileged and its most destitute. The problems of low income countries have been exacerbated by the rapidly changing international situation. As the Cold War ended, benefits accruing from the flow of military and economic assistance related to national security objectives disappeared. In a situation that some consider exploitative, countries are now required to spend their own money to purchase arms in the hopes of securing substantial aid in return. Influential Non-State Actors (Like FIFA) To make matters murkier still, many feel that the impact of non-state actors on city economies most usually results in exploitation. In fact, one of the most worrisome aspects of the 2014 FIFA World Cup is the perception by many that exploitation is the name of the game. The tournament is scheduled to be the biggest football celebration of all time. But not everyone is expected to benefit. On the contrary, it is argued that the quarter of the Brazilian population living in poverty will suffer. Aside from evictions of favelas for image reasons, and human rights violations, there is the fear that the Brazilian people will not benefit from the billions in profits generated by the international competition. FIFA and the World Cup sponsors (Adidas, Coca-Cola, Budweiser — to name a few) refuse to allow the expected billions of dollars in profits to be taxed in Brazil even though the Brazilian population must bear the cost of hosting the World Cup. Unfortunately there is a prototype. The 2010 World Cup in South Africa resulted in three billion dollars in revenue for FIFA and three billion dollars in losses for the South African State. So it is expected that social benefits in Brazil will come under pressure because of state debt and, in the end, the 50 million poor of Brazil will end up paying for affluent sports lovers to enjoy the World Cup.
2010 FIFA World Cup in South Africa
A closer look at the balance sheet for the 2010 FIFA World Cup in South Africa is sobering. The tournament was eagerly anticipated. Among the South African population there was the expectation of economic growth, better life prospects, and new jobs. But this is what actually transpired.
- the cost to the South African State was 1,709% higher than planned
- instead of a profit of 700 million Swiss francs, South Africa suffered a loss of 2.8 billion; on the other hand, FIFA and its partners took in over 3 billion Swiss francs
- of the 10 stadiums built or expanded to house the 2010 games, at least 3 are considered to be “white elephants,” too big to be used in a cost-effective manner after the World Cup; the stadiums were built despite the objections of the South African Football League after pressure from FIFA
- 20,000 were evicted from their homes to build stadiums and other infrastructure
- up to 100,000 street vendors lost their livelihood during the World Cup
- South Africa was forced to impose reductions in social benefits due to World Cup losses.
2014 FIFA World Cup in Brazil
Despite the example of South Africa, let’s take a look at what’s happening in Brazil.
- 99% of the costs of the 2014 World Cup will be borne by Brazil; the country is investing $14.5 billion (USD) in airports, stadiums, and new transportation systems
- 5 new stadiums are being built and 7 are being renovated, to the tune of $3.9 billion
- private investors are reluctant to invest; only the renovation of 2 stadiums and parts of a third are being privately financed
- it is predicted that the stadiums of Brasilia, Cuiaba, Manaus, and Natal are not likely to be used to capacity after the World Cup
- Brazilian Federal states and the cities are taking on long-term debt (the usual rules on the limitation of excess credit have been suspended); debt ceilings for host cities have been raised
- goods and services linked to stadium building have been given tax exemptions.
What are Brazil’s expectations?
- it is expected that 700,000 jobs will be created
- GNP is expected to increase by $4 billion or 0.26%
To what extent these expectations become reality remains to be seen. Another expectation has already been dismissed. While Brazil voiced a determination to organize the “greenest” World Cup in history, environmental laws have been applied less stringently to infrastructure construction for the 2014 games. There will be simplified environmental sustainability tests for “mega events” and the Constitution and Justice Commission has proposed and amendment to the Forest Law, allowing the reclassification of formerly protected areas. Cities such as Rio de Janeiro, Porto Alegre, and Salvador de Bahia are reducing their protected areas because of infrastructure construction surrounding the World Cup. According to Raquel Roinik, UN special envoy for housing rights:
The 2014 World Cup is being used to change the system of Brazilian cities without criteria, without studies, without open discussion or democratic processes.
In this context, a good look at democratic transitions, institutions, the privatization process, the existence (or not) of civil society, social movements, and (even) culture might give us more knowledge about today’s urban conditions. How these evolved in a Cold War framework will be the subject of coming posts. Next time, though, we’ll take a look at the characteristics of socialist and capitalist cities.