Brazil boom lifts millions into middle class

By Stuart Grudgings

RIO DE JANEIRO (Reuters) - Clearing a space among empty beer bottles, Paulo spreads out a glossy leaflet that envisions an urban development more reminiscent of Tokyo or Singapore than the Rio de Janeiro slum where he has lived for 50 years.

A pedestrian bridge with a sweeping arch is shown next to an azure swimming pool surrounded by palm trees. Nearby, a hospital and a sports center will rise, not far from hundreds of new apartments for residents now living in shacks perched on the hillside.

It is a different world to the daily life of the more than 1 million people living in Rio's slums, or favelas, who have long been left by government to fend for themselves, often caught between ruthless drug gangs and violent police tactics.

"We believe in it," said Paulo, a community leader in the Rocinha favela who, like many in the slums, did not want his real name used for fear of reprisals from drug gangs. He then sounded a note of skepticism about Brazil's government. "If they don't do it, then maybe they will suffer."

The Rocinha development, part of a $315 billion federal program aimed at improving the country's decrepit infrastructure, is one sign of how millions of poor are benefiting from an unprecedented period of economic growth in South America's largest economy.

The income of the poorest 10 percent of people grew by about 9 percent per year between 2001 and 2006, compared with 2 to 4 percent for richer people, according to the World Bank. The country still has some of the worst inequality in the world, but that is changing rapidly as tens of millions move out of danger of hunger and within reach of their first television, refrigerator or computer.

"It's more like it is booming up than trickling down," Deborah Wetzel, the World Bank's lead economist and head of poverty reduction and economic management for Brazil, said of the growth.

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