However, after Brazil returned to democratic rule in the mid-1980s, a new attitude toward Rio’s favelas began to take shape, blending the hopes of its poorest citizens and the ideals of architects, urban planners, engineers, anthropologists, sociologists, economists and grassroots activists. Starting with a pilot program of small, self-help community projects, by the end of that decade the municipal government crafted an innovative strategy to deal with favelas. Rather than raze these settlements and cram their population into public housing, the city would seek to upgrade their basic infrastructure and provide much-needed social services.

In 1995, with the support of the IDB, Rio de Janeiro launched the Programa Favela-Bairro, an initiative that seeks to turn forlorn shantytowns, home to more than 1 million people, into proud neighborhoods, and to knit them into the formal city’s fabric.

Despite monumental challenges, Favela-Bairro has achieved remarkable success. The program, which has been hailed as a model for cities in developing countries, quickly gained popular support in Rio de Janeiro, to the point where two top politicians have battled publicly over who fathered the idea.

“Favela-Bairro is one of the most ambitious and forward-looking neighborhood upgrading programs that any city has ever launched to deal with marginal settlements, not only in Latin America but in the world,” says Dr. Janice E. Perlman, president of the Mega-Cities Project, a transnational network of specialists who analyze urban problems.

Under the program, the municipal government and the IDB have committed more than $600 million, the bulk of which will be spent on public works in some 120 of the city’s 600 favelas. These investments include opening streets and creating parks, playgrounds and other public spaces, as well as bringing essential services such as potable water, sewerage systems, storm drainage, garbage removal and public lighting to places where not even mail was delivered.

The program also offers beneficiary communities a menu of social services that are provided by civil society organizations. During Favela-Bairro’s first phase, which concluded in 2000, the program built daycare centers, indispensable to accommodate working mothers. For the second phase—and in response to demand from the residents themselves—other services were added such as school retention and reinforcement programs, youth leadership activities, counseling on domestic violence, sexual abuse, teenage pregnancy and drug and alcohol addiction. An income-generation component offering adult education and job training was also included in the menu of options.

“We did not have to look far to find what was needed. The people told us what they wanted,” says IDB project team leader José Brakarz, a Rio-born urban planner who has worked on Favela-Bairro since Brazilian officials first proposed the plan almost a decade ago.