The two faces of Sao Paulo

The world is becoming more urbanised - but most of the new arrivals end up in slums. Daniel Howden reports from a city divided by money
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This year a woman will give birth in the slums of Kibera outside Nairobi, a young man will leave his village in China for the booming metropolis of Shenzhen or a peasant farmer's family will leave the arid north of Brazil for the bright lights of Sao Paulo. The moment itself will go unremarked. But the appearance of that infant, individual or family within the city limits will mark a watershed in human history. For the first time the urban population of the world will outnumber the rural.

At the forefront of this urbanisation are the mega-cities of the developing world. There are 22 Third World cities of more than eight million inhabitants that meet the UN's mega-city criteria, and it is there, as Mike Davies points out in his landmark work Planet of Slums, that the futures of the majority of humanity will be played out.

It's possible the momentous arrival will come at Prestes Maia in Sao Paulo. The largest squat in Latin America, nearly 2,000 people have crammed into this disused textile factory. Its 20 storeys provide shelter for some of the poorest people in arguably the most unequal place on earth.

These are the final days of Prestes Maia and the families face eviction. Just as the crumbling façade stands at odds with the gentrification of the city centre, its occupants find themselves unwanted holdouts in a process of economic segregation. Raquel Rolnik, Brazil's newly appointed minister for cities, is tasked with making sense of this deeply divided landscape. " This urban world is not a world of cities it's a world made of slums," she says.

Sao Paulo is the largest city in the developing world, with a population of up to 20 million according to the UN. It is a city of naked contradictions, intense inequality; a city of walls. At its centre the massed ranks of corporate headquarters and gridlocked roads give testament to continental wealth; ringed by neighbourhoods of condominiums and walled mansions. Beyond this planned city lies the other two-thirds of Sao Paulo, a precarious world of unnamed streets and endless favelas.

From the outside Prestes Maia gives no hint of the life within. Past the volunteer gatekeepers on recycled furniture, the stairwell climbs past floor after floor of human ingeniuity. The one-time lift shaft is now a conduit for improvised water pipes, while smashed windows provide entrance to the vines of naked wires that provide what dim light there is. On each level the vast parquet floors have been parcelled off with cardboard and scrap wood into an internal shanty town.

The battle for this gigantic squat has come to symbolise the fight for the future of this city. On one side, an alliance of social movements with the tacit backing of the leftist federal government have fought to give legal rights to the squatters. On the other side, the municipality, with its wealthy corporate supporters, insist on the property rights of its owner. Under Brazilian law a building left unoccupied for nearly 20 years can be taken from its owner but this complex legal battle has been lost.

The result of this is shattering for Lamartine Brasiliano. Among the vanguard of the homeless movement that broke into Prestes Maia in 2000, he has made it his home, met his wife and had three of his children there. "I left Pernambuco because of the lack of opportunity and I came here to find things were just as bad." A signpainter in an era of computer graphics, he now sells soft drinks by the road to support a family of seven. "Sao Paulo is a city of extremes. People who have money always want more money, more and more."

The occupation gave Lamartine a mission, and in its basement library of donated books, he gave himself an education. It was while reading Greek mythology on nightly guard duty that he met his wide Maria. Their three children are Archimedes, Achilles and Athina.

"Here I met the woman I love, I feel part of a community. Before I was a nobody." He says that if it was up to him they would fight to resist eviction but that decision was rejected by the residents' committee. "I feel no hatred for the owner, he's only the way he is because of our political system," says Larmartine.

Sao Paulo first grew rich under Portuguese rule as landowners exploited slave labour to amass vast fortunes. With a culture based on the idea that whites don't work, an intensely stratified society emerged. To add to this, Sao Paulo controlled up to 60 per cent of the world's coffee trade during the 19th and 20th centuries, concentrating immense amounts of capital among relatively few families.

Unravelling "500 years of the concentration of wealth and power" is the challenge facing today's politicians.

That concentration is nowhere more evident than in the shopping halls of Daslu. The city's temple to consumerism is not open to pedestrians. Access is granted only by the right kind of car driven through one of several checkpoints. The seriously exclusive don't even drive in. Sao Paulo boasts the largest private helicopter fleet in the world and Daslu naturally offers a "heli-pod".

All luxury is for sale. From belts inlaid with precious stones and ranks of furs that belong to another climate, to yacht brokers and penthouse apartments, Daslu provides. The size of the store is daunting even to its vaunted clientele, and golf carts trace an elegant path around its perimeter walls to help fatigued shoppers.

Kim, a Daslu representative who looks like a size-zero Cindy Crawford, explains the concept: "It's designed to make our customers feel like they're at home," she says, without irony.

Within earshot, the city's commuter trains provide a rare mingling point for rich and poor. By the time the train has arrived in Perus, towards the line's northern terminal, the "haves" have left the carriage. This is home to a sprawl of favelas that each day dispatch tens of thousands of workers to the city in search of some kind of employment.

The one thing that does trickle down from rich to poor in the mega-city is rubbish. Tonnes of it arrives every day at one of the main dumps and it feeds a series of recycling collectives trying to eke out an existence. Cutting the plastic collars from wine bottles, Alai de Silva Costa cuts a disillusioned figure. Like so many of the slum dwellers, she moved to Sao Paulo in the waves of migration that swept millions from the northeast of Brazil. "I feel like I'm living in a jail. I would go back immediately if I could but there is nothing there for me."

The recycling centre is the only thing helping her to reach the minimum wage of 400 Reals a month (£95). It was set up with the help of Care International, whose Sao Paolo office specialise in income generation projects and business training.

While this collective helps to support up to 40 women it is a question of surviving, not thriving. "I don' t have a home. I live in a shack and you can't call that a home, it's always close to falling on my head."

Rubens Barbosa, a former Brazil ambassador to both London and Washington, says the result of the co-existence of entrenched wealth with relentless is a "city of walls".

"Sao Paulo is one of the most striking examples of the tip from rural to urban. The problems are tremendous... This is now the most dangerous city in Latin America."

Whilst striking an optimistic note that reconciliation between rich and poor is possible he says that time is running out.

"It's difficult to think of a much worse situation, we are reaching the bottom."

One answer for those with money is Alphaville. Itself a city within a city it guarantees its residents, both corporate and residential, a line of defence against the seething slums beyond. Only accessible to people with good reason to be there, Alphaville is surrounded by checkpoints that break up its miles of perimeter fencing.

But the real walls surround its residential areas, pod like enclosures that bring to mind circled wagons they forbid entrance to anyone who does not live there or work for people that do. Beyond the barriers are neat streets with grassy roundabouts and double garages fronted, often, by white pillars and mock Greek statuettes.

Whatever awaits Lamartine and his family wait to be evicted from their home, it is not an invitation to Alphaville. More likely it will be an improvised shack in one of the hundreds of satellite favellas. While promises of government compensation and media interest swirl around the fate of Prestes Maia, Lamartine is reconciled to leaving.

"All I have is kids and books, it won't take me long to pack up."