Keywords

2.1 Introduction: Urban Neoliberalism and a General View of Belo Horizonte and its Recent Metropolitan Expansion

Since the 1970s, there has been a profound turn in central capitalist and peripheral countries to neoliberalism as a practical economic policy and also as a form of hegemonic ideological thought; as such, deregulation, privatisation and the removal of the domain of the state in social provision have become widespread. According to Harvey (2007), neoliberalism is, in principle, an economic policy theory which proposes that social welfare is best reached through the release of entrepreneurial and individual creative freedoms within an institutional framework of the ‘minimal state’ that ensure full private ownership, open markets and free trade. In practice, it corresponds to a strategy of global elites against the attempts of workers to remain in power and strengthens its appropriation of global wealth.

From the point of view of urban planning, the rise of neoliberalism in the 1980s and 1990s replaced the traditional planning associated with the Keynesian interventionist welfare state (Brenner and Theodore 2008) and moved towards the weakening of long-term planning, the loosening of urban regulation, following market trends and the promotion of the urban spectacles. Harvey (1996) calls this process a transition from managerialism to entrepreneurialism in urban governance in late capitalism, with the adoption of the business logic and various fiscal and marketing strategies for promoting cities in the face of a growing ‘war of places’ on a global scale.

The main criticisms made of neoliberal strategic planning concern its very limited social participation, short-term thinking and the growing fragmentation of state action. Participation in strategic planning focuses on identifying the most important key actors in the quest to build a usually false consensus and authoritarian legitimations, excluding various segments of the population in decision-making processes, as analysed by Souza (2001) and Vainer (2000). It is considered that the realisation of mega-events operates at the heart of this new neoliberal urban governance model, based on increased competition between cities to attract foreign capital. It is in such a context that the 2014 FIFA World Cup took place in Brazil, and particularly in Belo Horizonte and its metropolitan region.

The Metropolitan Region of Belo Horizonte (MRBH), made up of 34 different municipalities, is inhabited by five million people and is the third most-populated urban region in Brazil. With strong links to São Paulo, Rio de Janeiro and Brasília, the MRBH lies in the Southeast region of Brazil, the most urbanised and developed part of the country. Belo Horizonte, the main city in the metropolitan area and the capital of the state of Minas Gerais, was founded in 1897 as a planned city according to the urbanistic principles of the late nineteenth century and today has 2.5 million inhabitants. The metropolitan economy is driven by a strong mining–metallurgy–car manufacturing complex which took off after the 1950s, and also by a booming real estate sector, services and a large public sector.

The production of space in Belo Horizonte has always been characterised by a strong confluence of public and private interests, whereby public investments, particularly in urban/regional infrastructure, have established the main directions of expansion, with surrounding residential space being the outcome of real estate capital investments in different decades. Informal housing settlements, representing around 20 per cent of the housing stock, are a constant feature of the urbanisation of Belo Horizonte. The prevailing territorial pattern, as in many Brazilian cities, shows a concentration of most facilities, amenities and services in central areas, and social and environmental deprivation in peripheral urbanisation, the spatial outcome of high inequality, failure of social housing policies and the privileged conditions of the reproduction of capital invested in land and property. Recent waves of metropolitan expansion point to the overlapping of a more diverse pattern of urbanisation in both rich and poor areas to the north and south (Costa and Mendonça 2012). In such a complex urban fabric, investments related to the 2014 FIFA World Cup ended up reinforcing urban growth tendencies and inequalities.

2.2 The Local Responsibility Matrix and the Federal, State and Municipal Government

Due to the ongoing trend of the strong devaluation and volatility of the Real (R$) against the dollar (US$) that started in 2015, we have decided to maintain all the values in this chapter in the Brazilian local currency. All our data originally collected in 2013 and 2014 was updated to actual values on 14 February 2016. The Central Bank official exchange rate for that day was US$1.00 = R$3.99. Accessed 14 February 2016: http://www.copa2014.gov.br/pt-br/sobre-a-copa/matriz-de-responsabilidades.

A total of 2.6 billion Reais (R$) in public investment and financing were originally assigned to the 2014 FIFA World Cup in the Belo Horizonte Responsibility Matrix, of which almost 2.3 billion were contracted, and only 1.5 billion used (actually paid). The amounts for the World Cup organisation in Belo Horizonte bring to light the main protagonist role played by the Federal Government, which was responsible for 75 per cent of the investments. Of this total, R$1.35 billion were in the form of Federal funding investments, of which R$400 million (or 28 per cent) came from the BNDES (National Economic and Social Development Bank) for renovation projects and the adaptation of the Mineirão Stadium. The rest was related to urban mobility projects, financed by the Caixa Econômica Federal (Federal Savings Bank).

In terms of the total number of expected actions and projects, Belo Horizonte had 25, fewer than Recife (36), Fortaleza (26) and Salvador (34). However, with respect to the total planned resources, Belo Horizonte came third (after São Paulo and Rio de Janeiro), being assigned around 10 per cent of the total of resources available for the whole country. As for the proportion of these resources given to Belo Horizonte, federal financing is the most important (51 per cent), followed by direct investment by the Federal Government (17 per cent), state government (15 per cent), other sources (10 per cent) and local government (7 per cent). The participation of the Federal Government, either through financing or direct application, represented a significant 28 per cent of the planned resources, while state and local governments had a lower share. By comparison, the city of Belo Horizonte had a higher dependence on Federal funds than the average of all the host cities.

In Belo Horizonte, the reconstruction and adaptation of the Mineirão Stadium accounted for the largest amount of resources allocated to a single project (R$695 million), comprising 26.5 per cent of the total investment for the city. If we group the projects related to urban mobility, they total R$1.4 billion, 54 per cent of the overall total (but of which only R$700 million was put into use). Of this amount, 72 per cent was intended for mass transit investments (such as Bus Rapid Transit (BRT)), 26 per cent for expansion of the road system and the remaining 2 per cent for the expansion of the Traffic Control Centre. Another sector was the air traffic infrastructure, which received an investment of R$430 million (16.5 per cent of the total, of which only R$260 million was used) for the expansion and renovation of the Tancredo Neves International Airport.

According to the data provided on the Federal Government website, none of the actions for tourism infrastructure, public security, telecommunication and the building of complementary installations for the Confederation Cup and for the World Cup—all of them under the responsibility of state or local governments—was carried out by the time that the World Cup started. In addition, a large investment planned in road system expansion called Via 710 was excluded from the Responsibility Matrix in November 2013.

A detailed analysis shows that Belo Horizonte follows the national trend of investment sector division, concentrated mainly on stadia and public transit. It is already possible to note that, at a national level, private investments are only present in the projects related to airports and stadia. In Belo Horizonte, the reform and adaptation of the Mineirão Stadium was performed under a Public–Private Partnership (PPP – see below) and the Tancredo Neves International Airport was offered as a concession to the private sector in November 2013, with a 30-year contract.

It should also be highlighted that, apart from the investments in the Airport (located in the metropolitan municipality of Confins), all other actions and resources were directed at the capital city, leaving most of the metropolitan region lacking World Cup investment (although some of the projects in Belo Horizonte had metropolitan impact, as we will see).

It is important to remember that most of the projects were carried out with a considerable lack of popular participation and social accountability, which was aggravated by a fast-track regime approved at a Federal level to speed up public investment for the World Cup. One of the most drastic and violent expressions of this was the collapse during the World Cup in July 2014 of the Batalha dos Guararapes overpass, which has just been under construction as part of a complex of projects planned for the Pedro I avenue, killing two people and injuring another 22. This tragic event clearly shows the great human cost involved in the implementation of the FIFA 2014 World Cup in Brazil.

2.3 The Urban Role of the Mineirão, Infrastructure Investments and Metropolitan Expansion Trends

When proposing the candidacy of Belo Horizonte as the host city for the 2014 FIFA World Cup, the local government offered the Mineirão Stadium, located in the Pampulha region, for the matches. Publicly owned, it is used for matches of both main local football teams, Cruzeiro and Atlético Mineiro. The development of Pampulha and its main access road, Av. Antônio Carlos, was the first step for public investment towards the northern expansion of the city in the 1940s. The Pampulha development contains important public cultural and leisure facilities, museums, the São Francisco church, a club, party halls, a zoo, etc., built around a large artificial lake, which is one of the city’s main tourist attractions. The main city airport was built in Pampulha in 1933. In the 1980s, a new international airport was built further north in the municipality of Confins, reinforcing the need for the expansion of the metropolitan infrastructure northwards.

However, it was only in 2005, when all long-distance flights were transferred to Confins Airport, that a new wave of investments in infrastructure, technological and economic projects reinforced the expansion towards municipalities north of Belo Horizonte, representing a new form of articulation between public investment in infrastructure and private investment in property, industry and tertiary services.

Before such investment, metropolitan growth beyond the Belo Horizonte municipal border was mostly made up of low-income developments and housing estates. Therefore, such investment beyond Pampulha and the northern boundary helped to substantially increase land and property prices in low-income areas and beyond. The extent to which there will be a classic process of gentrification of popular areas is still to be assessed, but there are widespread signs of an increase in land and property prices along this expansion axis.

The Mineirão Stadium was renovated and modernised through a controversial PPP, in which the private consortium chosen to run the stadium for the following decades was granted subsidised Federal loans and also a guarantee by the state of a minimum profit rate. In December 2010, the Government of the State and the Private Concessionaire Minas Arena SA (formed by three local construction companies) signed the PPP, the object of which was the exploitation, operation and maintenance (preceded by the renovation and adaptation) of the Mineirão complex, through an administrative concession. The contract was worth R$677 million for a concession lasting 27 years (until 2037), with a possible extension until 2045.

The government of Minas Gerais did not invest its own resources in most of the projects. The cost of renovation was to be taken on by the private partner, either using its own resources or funding (the R$400 million public loan from the BNDES). During the period of the contract, the state government will pay the concessionaire in two ways: a fixed amount as remuneration for public space management, with decreasing value over time; and a variable amount, calculated according to the financial performance of the management and the quality of service. Such an arrangement guarantees the concessionaire that the state will ensure minimum profitability in the event of net losses. This is a classic example of privatisation of profits by capital and socialisation of losses to society through the state.

The Municipality of Belo Horizonte listed seven important urban mobility projects for the World Cup: three high-capacity transit corridors (the BRT bus system) along the Antônio Carlos/Pedro I and Cristiano Machado avenues and the Central Area; renovation of the Pedro II/Carlos Luz corridor, the building of the Arrudas Boulevard, and the opening of two new main roads (Route 210, which was completed in May 2014 just before the event, and Route 710), which would work as alternative ring roads in order to relieve the current radial system.

Comparing the first published lists of interventions and the last, there was a significant reduction in scope, especially regarding the long-delayed modernisation and expansion of the existing metro. One year before the World Cup matches, the projects on the Pedro II/Carlos Luz corridor had been cancelled and projects relating to the new 710 route had not yet even started (as already mentioned above, Via 710 was eventually excluded from the World Cup Responsibility Matrix, is only now being implemented through different sources of financing and is expected to be completed by middle 2017). The BRTs resulted in over-priced projects and experienced significant delay, not to mention the tragic accident with the Batalha dos Guararapes flyover, which collapsed during construction.

Figure. 2.1 shows Pampulha Lake and the Mineirão Stadium, most mobility infrastructure investments and the most important areas from where people were evicted as a consequence of the implementation of projects mentioned.

Fig. 2.1
figure 1

Urban mobility interventions and expropriation/eviction areas in Belo Horizonte

Source: Tonucci Filho et al. (2015)

Full size image

2.4 Discussing the Impact of Certain Investments: Stadium Renovation and Use, Infrastructure and Land Values

From the analysis of available values, it can be inferred that urban interventions involving greater inputs of funds were mostly located in the northern expansion axis of Belo Horizonte, focusing on two corridors (Antonio Carlos/Pedro I and Cristiano Machado) whose ongoing restructuring was decided before their association with the mega-event. However, it seems clear that the set of mobility investments for the World Cup strengthened the links between the northern axis of metropolitan expansion towards the Confins Airport and the attempt to revitalise the central region of the city. These two areas are experiencing rapid land and property valorisation and are expected to receive many more private and public projects and investments in the next few years. Pampulha stands somewhere in-between them (Tonucci Filho et al. 2011).

This dynamic was also strengthened by a boom in hotel construction, which benefited from the introduction of a 2010 bylaw that created zoning exceptions (through a very controversial—and most likely illegal—arbitrary use of an urban planning instrument inspired by PPPs called Urban Operation) allowing higher buildings with the World Cup in mind. Many of the more than 50 hotels that were granted benefits from this law were not completed by the time of the World Cup, some of them are still under construction and a few have even been abandoned. Although Belo Horizonte was experiencing a shortage of hotel beds before the event, it was also said that the pace of hotel construction exceeded the actual demand for beds in the city, with a sector crisis being expected in the near future. Besides, this high-density high-rise construction had a huge impact on the urban landscape.

The large volume of public and private investment in the northern axis not only increased its importance but also had a significant impact on the dynamics of the metropolitan region real estate. But despite this recent trend of metropolitan restructuring towards the north, the centre-south axis continues to account for the majority of urban facilities and services, and the concentration of high-income dwellings, both in the city of Belo Horizonte and in its metropolitan region (Andrade and Mendonça 2010). The traditional importance of the south-central part of the RMBH was reinforced by high levels of recent investment in the central area, especially in the city centre, which combines rehabilitation projects in important public spaces, renovation, expansion and retrofitting of old buildings (above all, cultural facilities and residential buildings), and new projects (such as the various hotels boosted by the abovementioned zoning exception). Here it is interesting to stress that the mobility projects linked to the World Cup, the ensemble of projects associated with the northern expansion axis and the attempted rehabilitation of the city centre are all processes pre-dating the mega-event planning and organisation. In this sense, the mega-event worked as a catalyst and legitimiser of these ongoing connected processes.

Indeed, it should also be noted that the third most expensive project, the Arrudas Boulevard, increased road capacity on the east–west connection through the channelisation of the main river that crosses the city, especially near the central area of the metropolis, thus reinforcing the role of the city centre and of the northern axis. In addition to problems related to their prioritisation and relationship with the World Cup, the ensemble of projects promotes the valorisation of areas near the city centre, linking recent and future investments and creating new profit frontiers for real estate capital. A closer reading of these processes allows us to infer that this process takes place in an urban area located at the junction of the aforementioned Antonio Carlos and Cristiano Machado avenues, with the northern part of the central area, forming a high valuation region with the accumulation of proposals for large projects and public-private enterprises.

In a complementary manner, it should be noted that all interventions planned or under way in Belo Horizonte required land and housing expropriation processes through compulsory purchases and the removal of dwellings. The lack of transparency in identifying the places where expropriation took place and exact numbers prevents a more accurate analysis of this process. In this scenario, two risks were increased: (a) the speculative increase in land prices related to the urgency of the projects; and (b) the violation of housing rights and conflicts also related to the execution period of the work. The high number of conflicts which went to the courts combined a traditional lack of transparency with tight deadlines and resulted in low indemnity amounts of financial compensation offered by the municipality to the evicted families.

In Brazil, the restricted access to rural and urban land ownership perpetuates extraordinary income and wealth inequalities, reiterates violent conflicts around land and reinforces the condition of illegality, through tenure, invasions, occupations, etc., which are still the main form of access to land and residence for most of the urban poor. One of the most disruptive phenomena in Brazilian urbanisation over the last decade has been the increase in organised urban occupations due to a vicious combination of rising land costs and a shortage of adequate housing policies for the poor, something for which the World Cup cannot be blamed, but which it has certainly helped to exacerbate.

Organised by social movements, occupations rapidly take place through the occupation of vacant (public or private) land, and the building of housing and infrastructure by the residents themselves, or by joint communal efforts. In the Metropolitan Region of Belo Horizonte, there are now 20 recent land occupations that have taken place since 2008, which are home to around 10,000 families living under the threat of eviction.

A major consequence of the Mineirão renovation has been the gentrification of the stadium, which was once a place for popular gatherings. To meet the so-called FIFA standards, several architectural and administrative changes were made. The most popular and cheaper standing areas very close to the pitch disappeared as only numbered seats were allowed. The same occurred with popular food and beverage sales, which became regulated and standardised, with a consequent increase in prices. Changes occurred even at the level of language as the word ‘stadium’ or the popular use of ‘the field’ are rapidly being replaced by the internationally recognised word ‘arena’, which had never been used before in Brazil to refer to a football stadium. Thus, the 2014 FIFA World Cup consolidated, and sometimes imposed, important changes to the ways in which people live and experience football ‘on the field’, changing from a popular gathering to a regulated spectacle only affordable by those who can pay for seats, food and drinks. Some of the changes, such as the prohibition of selling alcohol in the stadium, recently relaxed in Minas Gerais, are also related to the worldwide problem of violence between team supporters, which of course contributes to higher degrees of control.

In some Brazilian cities, as in other countries, there is always the risk that a new stadium specially built for a World Cup may become very difficult or expensive to operate after the event, turning into a so-called ‘white elephant’. This is not the case for the Mineirão, which is frequently used for local and national football matches and championship games, and also for shows and major events. In fact, the complex is formed by the Mineirão, the football stadium, and by the Mineirinho, the nickname for a smaller but still very large facility used for other types of sports and for major shows, which was not renovated in the run-up to the World Cup. The Mineirão/Mineirinho complex was built near the cultural/leisure Pampulha development on land that belongs and is adjacent to the Federal University of Minas Gerais, by means of a partnership with the state government that is still in force.

However, as the Mineirão was already established in the 1960s in a very respectable part of the city, its renovation did not have major impact on the urban fabric, although it might have helped to raise land values around Pampulha Lake, and thus increase the risk of high-rise construction on its banks. The architectural, urbanistic and cultural importance of Pampulha, particularly at the edge of the lake, where most of Oscar Niemeyer architectural projects are located, has been recognised by many levels of legal heritage protection, such as special zoning and the prohibition of high-rise buildings. However, there are frequent attempts to relax zoning controls and, in 2013, the construction of two hotels planned for the 2014 FIFA World Cup, which could have partially defaced the Pampulha landscape, was halted. As the Pampulha area is highly valued in terms of land and property prices, it is very difficult to evaluate, without a very detailed survey, the extent to which the recent rise in land prices is related to a general increase in property prices along the northern axis, as previously mentioned, or is more directly linked to the renovation process for the World Cup. In any case, we cannot talk about a classic gentrification process associated with changes of people living in the already high-income neighbourhoods, but we can refer to a ‘gentrification of Mineirão users’.

The mega-event organisation had the potential to generate employment and income for the population. However, precarious employment was what followed, as shown by the numerous strikes that took place in stadia and the urban infrastructure construction. In Belo Horizonte, the situation of street-vendors selling food who used to work in the vicinity of the Mineirão Stadium was the focus of major conflicts, as the World Cup General Law guaranteed trade exclusivity to the mega-event sponsors (Brazil 2012). In 2010, the year in which Mineirão was closed for renovation, the 150 families of vendors working around the stadium on match days lost their income, and to this day they have not been allowed to return to their original workplaces.

2.5 Some Conclusions and General Tendencies

Data and information gathered and evaluated in this and other chapters demonstrate that in Belo Horizonte and other World Cup host cities, the same model of neoliberal urban governance appears: the commitment of significant public funds (either in the form of direct investment or loans) to projects of doubtful social return, concession and/or privatisation of public facilities and services, precarious labour relations, attacks on the income generating activities of informal workers, social cleansing through the persecution of homeless people, encouragement of real estate speculation associated with the tourist business, and disregard for rules, legislation and democratic standards.

As has been evident in the international literature, the legacy of the World Cup, from a social and economic point of view, is usually quite disappointing—if not radically regressive—except for the hegemonic actors directly involved in big business and politics: FIFA, football clubs, hotel and other international chains, official sponsors, politicians, the real estate sector, contractors, etc. The widely argued notion that international events are opportunities for aggregating investments related to urban infrastructure required not only for the event but also for local social needs was accompanied with the legitimation of what is being called a governance of exception, where long-established social, environmental and urbanistic rules are easily disregarded so that goals decided elsewhere by the event organisers and their partners can be met, regardless of the cost involved.

However, it is important to note that the FIFA 2014 World Cup did not mean a radical shift in the political direction of the city of Belo Horizonte, as the adoption of neoliberal models of urban policy in Belo Horizonte is directly related to the transition from a former leftist popular-democratic municipal government to a neoliberal-conservative government, a process that has now been taking place for more than a decade. Besides, the Metropolitan Region of Belo Horizonte has a long history of broad state interventionism in the production of space, which was enhanced through the exceptional regime of the mega-event, especially due to the high volume of investments channelled into the restructuring of the built environment.

The fate of Belo Horizonte was decided by the perverse confluence of private economic interests and shady political negotiations, instead of the real needs and wishes of the majority (and minorities) who daily live and work in the capital. The municipal and state urban and regional policies were put at the service of a new round of conservative and elitist modernisation, which was evident in the large urban renewal projects, the circumstantial loosening of planning legislation, in the road improvement works that overvalue car use, and enhancement measures to order, or erode, public space. The World Cup was attached to this project and strengthened it, either through activating exceptions in the legislation concerning zoning and rights or, especially, through the large financial resources provided by the Federal Government, an essential partner at the national level for the ongoing neoliberalism turn in Brazilian cities.

The counterpoint has been the emergence of new forms of resistance and protestFootnote 1 that, in June 2013, took to the streets of the country and, particularly in Belo Horizonte, protested against various factors underlying the organisation of the Confederations Cup (the preview event) and the 2014 FIFA World Cup (the main mega-event).

Despite full employment, growth and stability, the protests expressed a desire for something more: the strengthening of democracy, transparency and social control, and the obvious need for improvements in public services. Before the violent advance of real estate capital, the automotive industry and major projects over the past decade, and, more recently, the mega-events, Brazilian cities succumbed to an intense process of commodification and privatisation that served the minority interests of elites at the expense of the daily needs of its residents. It is not surprising that issues related to better living conditions, to fairer, more diverse and more democratic cities were raised in the demonstrations. Perhaps this powerful political ferment that now runs through the metropolitan fabric may be the main legacy of the FIFA 2014 World Cup in Belo Horizonte and in Brazil more generally.