Transitions

Why the World Needs to Get Ready for the Next Generation of Slums

People who live in slums don't have easy lives to begin with. Lately, though, politicians have been doing their best to make matters even more complicated. A few weeks ago the Venezuelan government started evicting Caracas's infamous 45-story slum, the "Tower of David," relocating residents to government housing outside the city. In early July, a few weeks earlier, a thousand slum dwellers in Islamabad found themselves confronting riot police as they tried to protest the Pakistani government's plans to evict them from their homes ("katchi adabi" settlements). Around the same time, a local government in India approved plans to build the first of 10,000 new "transit accommodations" for displaced slum dwellers. That followed Bombay's brutal anti-slum drive in May, when authorities bulldozed more than 100 family homes, forcing over 600 residents onto the streets.

If it seems like conflict over slums is mounting, that's because it is: The urbanization of the world is accelerating. In 1950, just 29 percent of the world's population lived in cities; back then, that was roughly 742 million people. Today, more than half of the world's people -- more than 3.5 billion -- are citydwellers. That may sound like a dramatic shift, but you ain't seen nothing yet. Roughly 70 million people move into cities every year, and the vast majority of them usually end up in illegal or informal urban settlements. According to U.N. estimates, by 2050, a third of the world's population will live not just in cities, but in slums.

The growth of slums is a bit like climate change: We know it's happening. We know it's important. But no one, so far, seems to have much of a response.

Policymakers tend to view slums as a necessary evil, a problem best contained through coercion or ad hoc responses. Experts point out, however, that there is a rational way to deal with the coming surge of urbanization: Plan for it. If cities are prepared to anticipate and acknowledge the inevitable influx of urban migrants, slums might not be slums.

Slums are characterized by shoddy construction, inadequate plumbing, and a severe dearth of public services. "Slum" itself is, in some people's eyes, a dirty word -- or at least one with such negative connotations that the stigma of being a "slum dweller" can diminish residents' prospects, pushing them to the margins of society. City authorities usually allow slums to grow, unmanaged and underserved, and then react to the resulting problems by evicting or displacing residents or bulldozing their homes. (The photo above shows a mother and daughter who were evicted from their home in a Rio de Janeiro favela in advance of the World Cup.) Thanks to the misguided belief that slum migrants will move into better housing once they've set down roots, cities tend to neglect public or affordable housing initiatives that could help poor newcomers. "The problem of acceptance of slums is that it's discouraged forward planning," says Larry English, a leading expert on urban development at the humanitarian organization Homeless International. "The idea that people transition out of slums -- this is lazy thinking." (I spoke to him and the other experts cited in this post at a recent conference in Dubai hosted by the philanthropic group Geneva Global and the Legatum Foundation.)

English explains that the laissez-faire attitude toward slums arose in the 1970s and 80s, when city planners began to "embrace slums as a grassroots alternative to formally planned settlements -- a solution rather than a problem." This caused many governments to recognize slums as legal settlements -- in itself a significant improvement over previous approaches -- but permitted them to let development issues take a back seat until community political movements demand they "upgrade" public services and infrastructure. It's a solution that makes little economic sense, says English, noting that upgrading an existing slum costs five times more than if it were planned before settlement occurred.

Some countries, like South Africa, have been proactive in improving existing slums and planning for future migrants. But others, like India, are struggling to do the same. According to Pramod Nigudkar of the Committed Communities Development Trust in India, 52.5 percent of the people in Mumbai live in slums that take up just 9 percent of the city's land. Though migration to the city has abated slightly, the city has still failed to prepare for the estimated 60,000 people moving in each year. In 2000, the Maharashtra State Government recognized existing slums as "legal," but have yet to do so for newer ones. The current approach favors contracting private builders to "redevelop" the land -- which often involves evicting or relocating slum dwellers, and, according to Nigudkar, the city has done little in the way of planning for future urban migration.

What this comes down to is systematic neglect of slum dwellers, who continue to be treated by cities as outsiders. At the Dubai conference, participants outlined the many opportunities that slum dwellers offer to the cities they join. They offer new markets for products and services. Many are themselves necessarily entrepreneurial, and, en masse, they contribute to "agglomeration economics," bringing down costs, easing infrastructure needs, and providing labor. But regardless of what they bring, slum dwellers are, first and foremost, human beings entitled to basic human rights and a modicum of respect from governments.

As Janice Perlman, scholar and author of Favela: Four Decades of Living on the Edge in Rio de Janeiro, explained, the essential problem is that cities are failing to treat new urban migrants as people with equal rights. "I think the real issue is that they don't have the same choices as everyone else in where they live," she explains. "It's all about legitimizing the community as working class people with equal protection, equal rights, and then they can live however they choose to."

Ready or not, urban migrants are coming. And once they arrive, doesn't it make sense to treat them like human beings with all the attendant rights and responsibilities -- just like the citydwellers who arrived before them?

YASUYOSHI CHIBA/AFP/Getty Images

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The World's Cheapest Gas? Not for Long

Venezuela's government is desperate for cash. It's so desperate that it's willing to question something few have dared to touch: the country's massive gasoline subsidy.

The official price of a liter of 95-octane gas is 0.097 bolivars. At the official exchange rate of 6.3 bolivars per dollar, this amounts to $0.015. At the actual market rate, the price would require scientific notation.

For all intents and purposes, vendors have been giving gas away for free. This creates an enormous burden on the Venezuelan state: Conservative estimates suggest the annual subsidy is worth $12 billion, with most of it going to the better off (those who own cars).

Not surprisingly, the distortion in the price of gas has become the butt of jokes, with Venezuelans musing over how much a tank of gas costs in comparison to other things. For example, the price of a pack of cigarettes is the same as 12 tanks of gas. A half-liter bottle of mineral water costs as much as three tanks of gas.

The price of gas has been set in stone for the last 17 years, a period that has seen double-digit inflation every year. This begs the question: Why do Venezuelan politicians find it so difficult to let the market determine the price of gas?

The answer lies in the trauma Venezuelans endured the first time they tried to free the price.

There is a long-held tradition of setting the price of gas in Venezuela. The first time the government tried to do away with price controls, thousands of people took to the streets, protesting and looting. The two days of mayhem ended in a curfew that saw the government commit serious human rights violations.

The Caracazo, as the period is known, marked a clear watershed in Venezuelan political life. Until then, Venezuela had been a somewhat functional democracy. The riots, which took place all over the country, woke Venezuelans up to the deep problems that lurked beneath a veneer of harmony, glossed over with oil money.

Ever since then, the price of gas has become the proverbial "third rail" of Venezuelan politics. The last president who attempted to raise it was Rafael Caldera, Hugo Chávez's predecessor. While Caldera did not face any riots for it, he left office with his popularity in the teens. Chávez, for all his bravado, never dared to touch it.

The consequences of the distortion are a textbook case of basic economics. Cheap gas is smuggled across the border to Colombia, where it fetches market prices. There are long lines at Venezuelan gas stations. The streets of Venezuela are clogged with gas-guzzling cars from the 1970s. (The photo above shows Venezuelan soldiers closing the border with Colombia as part of an anti-smuggling initiative.)

The government of President Nicolás Maduro has been hinting that it will tackle the problem. Officials have been talking about the heavy burden the subsidy places on public finance and about the distortions it imposes on the market. Although the government has announced plans to consult the public, it appears to have already made its decision. (The precise timing remains a mystery.)

One of the ironies of this move is that chavismo claims it was born as a movement in the aftermath of the Caracazo riots. These are the same people who, in congress and in the cabinet, have railed for years against "neoliberal" policies such as raising the price of gas.

They now appear to be learning, however, that reality is unavoidable. The government simply cannot keep financing everyone's gas tanks.

The gas hike seems to be the brainchild of oil minister and economic czar Rafael Ramírez, who has been in full Orwellian mode lately. He has railed against the gas subsidy, saying that it amounts to enormous waste, and has even started talking about how it damages the environment. He has not once acknowledged that cheap gas is his own policy.

It's not known when the government plans to raise the price. Local media is reporting that the new price could be 2.7 bolivars per liter -- which would amount to an increase of more than 3,000 percent. The government claims this is the price that would cover cost of production, but falls far short of international prices. It is not planning on liberating the price, merely "adjusting" the price control. But with inflation in the high double digits, it won't be long before this new price is perceived as ridiculously low as the current one.

Regardless, Venezuelans' hard-pressed personal finances are about to take a massive hit. One wonders if they are simply going to grin and bear it, or if this will spur them to take to the streets once again.

Juan Nagel is the Venezuela blogger for Transitions, editor of Caracas Chronicles, and author of Blogging the Revolution. Read the rest of his posts here.

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