December 2011 Number 172 www.worldbank.org/enbreve A regular series of notes highlighting recent lessons emerging from the operational and analytical program of the World Bank‘s Latin America and Caribbean Region (LAC). Creating More Livable Cities: The Case of the Rio de Janeiro Metropolitan Area LAC Urban Development and Water Unit (LCSUW) Spanish Fund for Latin America and the Caribbean 68265 Despite Rio de Janeiro’s privileged position as have resulted in a tangible reduction in poverty in one of Brazil’s historical capital (from the eighteenth the world’s most inequitable societies. century until 1960) and as a major center for tourism, culture, and education, the city and its With this in mind, the World Bank, with a guarantee from region (collectively known as the Metropolitan Brazil’s federal government, is funding the Rio de Janeiro Region of Rio de Janeiro or Região Metropolitana Metropolitan Urban and Housing Development Policy do Rio de Janeiro, RMRJ) confronted significant Loan (DPL). This DPL is part of an ongoing effort to address challenges during the final decades of the regional challenges in the RMRJ. Additional advisory twentieth century. Since the relocation of the activities to the state government of Rio de Janeiro national capital to Brasilia, ongoing industrial included a three-day policy workshop with international restructuring, and social inequality contributed to experts on metropolitan governance and international declines in the region’s share of Brazil’s population study tours exploring successful metropolitan models and gross domestic product (GDP). However, and lessons learned from other host cities of such mega since 2001, the region has entered a new period events as the Olympic Games. of expansion, based on the surging petrochemical and metallurgical industries, and port and logistics The DPL-financed project will support the state services. Also promising for development over the government’s policies in planning and managing coming years, the city will host the 2014 World territorial growth in the RMRJ and will promote Cup final game and the 2016 Summer Olympics. affordable housing and targeted and integrated social development programs for the urban poor. In addition, the city and the metropolitan region will develop a At the national level, Brazil escaped nearly unscathed comprehensive and inclusive development strategy. from the worldwide downturn of 2008, fueled by growing economic activity and buoyant domestic demand. Countercyclical fiscal measures implemented in 2010 further encourage this strong economic trajectory. This record of stability and growth in recent years is based on the country’s prudent macroeconomic policies. Moreover, Brazil’s fiscal responsibility law, inflation targeting regime, and floating exchange rate helped create favorable macroeconomic conditions that resulted in reductions in debt and inflation. This policy framework and recent growth have attracted foreign investment, helping to finance the widening current account deficit. The favorable economic environment and sound policies 1 To that end, the DPL’s components and subcomponents with the hotels and sport facilities in preparation for include: the World Cup and Summer Olympics, represent more than R$4 million of investment per square kilometer 1. Strengthen planning and management of urban in Rio de Janeiro, according to the Rio de Janeiro growth in the metropolitan region. Federation of Industries (Federecção das Indústrias do a. Integration and coordination in urban develop- Rio de Janeiro). ment and transport. b. Management of the urban environment. This enormous injection of financial resources provides c. Disaster risk management. much needed stimulus to the region, but it also challenges authorities to reflect on how to create a 2. Promote the provision of affordable housing with more livable metropolitan region that benefits the access to infrastructure and service. residents and ensures sustainability. To that end, the a. Enhanced low-income housing policy and DPL-financed activities will support authorities in their financing mechanisms. efforts to develop strategies for planning and territorial b. Strengthened land management and titling. management that encourage economic development and social inclusion. Lieutenant-governor, Luiz Fernando 3. Support the implementation of a targeted, compre- Pezão, stressed the loan’s “flexibility,� which will allow hensive social development program for the urban local government authorities to find regional solutions. poor. Although he did not expect to solve all the region’s a. Improved living conditions in most vulnerable problems with this DPL, the loan contributes much social settings. value added to the region and authorities will at the very least be able to identify alternatives for future The Seminário Rio Metrópole implementation. One major challenge, according to Pezão, is to ensure that the major investments motivated At the Seminário Rio Metrópole, a three-day workshop in by the World Cup and the Summer Olympics benefit May 2011, urbanists, researchers, public managers, and the region’s public in the long run, not just the visiting politicians met to reflect on Rio de Janeiro’s metropolitan throngs of sports enthusiasts. area and discuss ways to transform the region into one of the “best places to live.� The workshop was sponsored Governor Sérgio Cabral by the Rio de Janeiro state government, the World pointed to a number of Bank, and the Spanish Fund for Latin America and the projects already under Caribbean (SFLAC). way that benefit the re- gion’s citizens and will At the workshop, participants recognized that the leave a “final legacy� for concept of a metropolitan region goes beyond the the upcoming genera- arbitrary grouping of neighboring municipalities; it tions. For example, sew- encompasses the way in which these municipalities er treatment in the met- can cooperate and coordinate economic development, ropolitan region should social inclusion, and sustainability of the region as double from 30 percent a whole. Individual municipalities benefit from to 60 percent in the next four years. Moreover, municipal contributing to large projects that cut across and dumps will be replaced by sanitary landfills by 2016. In depend on several cities, such as the Petrochemical the area of transport, the government has expanded the Complex, the ports of Itaguaí and Maravilha, and the subway system, Metrô Rio, with new trains and a new Arco Metropolitano highway. These projects, combined line. It has also improved the highway system. In addition, municipal governments are implementing a green agenda, which includes equipment for the generation of renewable energy, research in low carbon alternatives, the use of rubber asphalt and high efficiency lamps on the roadways, and a “Green Tax� (ICMS Verde). Governor Cabral pointed out that renewable energy will also be on the agenda of the Rio+20 United Nations Conference on Sustainable Development to be held in Rio de Janeiro in June, 2012. 2 Institutions Matter Many of these reforms must take place in an institutional framework that balances the autonomy of diverse municipalities with their shared practical goals. Urban sprawl has often blurred or made invisible the boundaries between cities. In many cases, a legal or administrative line is all that separates one city from the next. Actions taken and decisions made in one city can and do have important impacts on neighboring cities. As a result, the need for regional cooperation has grown. However, there is no single model for a regional or metropolitan coordinating authority and any such organization will have profound impacts on the political and administrative structures of the metropolitan to the threat of damaging urban sprawl, the model region. New institutions that result from this new level was based on growth boundaries, mixed zoning, and of governance must seek consensus and cooperation controlled growth centers. It has since developed an among the various entities at the municipal, state, and integrated and participatory approach and employs national levels. “More and more, areas come together with management communities. In the end, the impressive common goals but without any institutional framework,� Portland Model is somewhat of an anomaly in the according to Aspásia Camargo, state deputy and United States; the model works and finds its strength in professor at the Rio de Janeiro State University. Camargo the importance placed on notions of leadership (civic continues, “We cannot wait to attack the problem of an and governmental), innovation, and participation or institutional framework for the metropolitan region.� mobilization of communities in the search for solutions. International Study Tour of North In Washington, DC, the delegation visited the World Bank American Metropolitan Regions offices and participated in a well attended brown bag lunch (BBL). The Washington, DC metropolitan region In an effort to learn from the experiences of other cities has a complex and fragmented governance structure, and regions, the SFLAC Trust Fund on Metropolitan which presents unique challenges to addressing region- Governance, in cooperation with WBI, sponsored a tour wide concerns. One ongoing challenge is the under- of four urban regions that have wrestled with similar funding of the Washington Metropolitan Area Transit problems. Between July 25 and 29, the delegation Authority (“Metro�) system. However, there have been from Rio de Janeiro visited Vancouver, BC, Portland, OR, some advances based on smart growth principles and Washington, DC, and New York, NY. Each city and greater the interaction between economic dynamics, land-use metropolitan area represented alternative solutions patterns, and transport. In addition, the recently formed for specific challenges. The cities toured also provided Metropolitan Planning Organization has triggered a important lessons learned for the Brazilian counterparts. productive dialogue among regional stakeholders. In Vancouver, for example, the 2010 Winter Olympics In New York, a number of regional organizations provided regional authorities and civil society the (either private or commercial associations) are working chance to engage in an exercise of strategic visioning in the areas of metropolitan governance, affordable for the next thirty years, particularly in terms of the use housing, and redevelopment, among other issues. of public transport versus car ownership and walking. The Regional Plan Association is active in the area However, the Olympic Games were focused on the city of of metropolitan governance with its upcoming fourth Vancouver and did not mobilize investments in the rest regional plan presenting three interlinked objectives of of the region, with the exception of the city of Richmond, competitiveness, social cohesion and poverty alleviation, where the international airport is located. and climate change. The New York Housing Development Corporation (HDC), a quasi-government organization, Particular conditions in and around Portland led to the finances low and moderate housing projects. Finally, development of the “Portland Model,� which includes the Economic Development Corporation, a non-profit an elected metropolitan council and cooperation with organization established at the time of the economic the local university. Originally developed in response crisis, is involved in capital construction, industrial 3 encourage a comprehensive and inclusive vision that addresses social, economic, and environmental issues. The challenges will include building a viable institutional framework that ensures coordination among the various state and local agencies and cooperation between and among the state and local governments. In the end, the most important challenge—and goal—will be to ensure that the investments benefit all who reside in and visit the metropolitan region. Cities in the Metropolitan Region of Rio de Janeiro (RMRJ) Population: 11,838,752 (2010 Census) Area: 5,292.139 km2 Cities: property management, area-wide redevelopment, real • Rio de Janeiro • Niterói estate operations, the design of tax abatement and • Belford Roxo • Nova Iguaçu tax-efficient financing, and advisory work. Most of its • Duque de Caxias • Paracambi members are appointed by the mayor. • Guapimirim • Queimados • Itaborai • São Gonçalo The visits to the four metropolitan regions sparked a • Japeri • São João de Meriti lively discussion among Rio de Janeiro’s government • Magé • Seropédica officials. The delegation was particularly impressed with • Maricá • Tanguá the presentations on regional planning and operations. • Mesquita • Itaguaí Although the guiding principal was the importance • Nilópolis of participation of all stakeholders, it became clear that there is no standard model for metropolitan governance. With the exception of Portland, there Web Sites were no strong and binding institutional arrangements in the regions toured. However, even in metropolitan Rio de Janeiro State Government regions with complex and fragmented institutional www.rj.gov.br arrangements in place, a minimum threshold of Observatorio das Metropoles coordination among public and private stakeholders www.observatoriodasmetropoles.net makes the system viable. World Bank, Brazil www.bancomundial.org.br Next Steps For a more complete list of references, please download As authorities and citizens in the Rio de Janeiro a digital copy of this publication from http://enbreve. Metropolitan Region address the upcoming challenges presented by a growing economy, expanding population, Author: Eric Palladini. Comments provided by: Alessandra and the impending arrival of millions of sports enthusiasts Campanaro (Task Team Leader) and Monica McDonough. in the very short term, they will have the opportunity to reflect on the region’s past and envision its future. The For more information, please contact Alessandra Rio de Janeiro Metropolitan Urban and Housing DPL will Campanaro, Infrastructure Finance Specialist, LCSUW. Disclaimer: The findings, interpretations, and conclusions expressed herein are those of the author(s) and do not necessarily reflect the views of the Executive Directors of the International Bank for Reconstruction and Development / The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. 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