The governance of public market spaces in Belo Horizonte
Patricia Schappo [ Pschappo1@sheffield.ac.uk ]
PhD researcher, Urban Studies and Planning, University of Sheffield
Belo Horizonte is one of the most important cities in Brazil, and it has a perceptible ‘culture of markets’. Yet, public markets, which make only a minor contribution to the city’s economy and goods’ provision, are under pressure and currently face a process of management change. This blog discusses these changes, drawing on my ongoing PhD research about the relevance of markets for social justice outcomes in urban environments. I also consider the role of local governments in supporting (or not) the existence and functioning of markets. After presenting briefly the context of Belo Horizonte’s public markets, I will introduce the new governance plan adopted by the municipality and, inspired by the workshop’s theme on ‘The Political Economy of Contested Territories’, critically examine how (and why) market spaces designed as part of municipal social service provisioning schemes are increasingly meant to be profitable.
Markets represent an important focal point for Belo Horizonte’s 2.5 million inhabitants’, defended as a trace of what is ‘Mineira’ culture. The Mercado Central is the city’s oldest market, created by the municipality in 1900 to supply the newly founded capital of the state of Minas Gerais. It can be considered a successful marketplace because it survived an imposed management change – the municipality sold it in the 1960s to its own traders’ association – and became the city’s main touristic attraction (TripAdvisor 2019) and a national reference point (Momondo 2016).
Newer public markets, however, did not manage to follow such a prosperous path. Created in different periods until the 1970’s, these markets have suffered from a decline in public investment, which was fuelled by the belief that their economic supply model was obsolete (Lima 2005). This is partly due to the emergence and evolution of supermarkets. In addition, the municipality itself developed a meaningful food supply programme that turned out an unintentional but unbeatable competitor to marketplaces: Sacolões, created in the 1970s, which provide affordable food (mostly fruits and vegetables) in a single place and are spread around the city.
Belo Horizonte’s municipal approach towards public marketplaces
Among the six still existing public marketplaces in Belo Horizonte, only three function as trading spaces. Regardless of their cultural features and popularity among the wider public, the council claims to have no reasons to invest meaningfully in places that ‘(only) revert in profit for the traders’, as reported by some local authorities (informants’ statements 2019). Moreover, within the municipality structure public marketplaces are managed by the sub-secretariat of Food Security and Nutrition (SUSAN), a branch within the Social Services, Food Security and Citizenship (SMASAC) secretariat. In this arrangement, and considering their current minimal supply functions, the marketplaces occupy a peripheral position, when compared to other SUSAN programmes such as ‘healthy food provision in public schools’.
Scholars are increasingly advocating markets as meeting grounds of transversal and multidisciplinary urban matters (Watson 2009; Janssens and Sezer 2013; Schappo and van Melik 2017). Such trends are also visible within the plan for the governance of Belo Horizonte’s public marketplaces. Following community engagement within two municipal markets (‘Santa Tereza’ and ‘Cruzeiro’), the mayor Alexandre Kalil (2017-2020) instituted in September 2017 a working group formed by leaders of eight municipal secretariats – namely the Treasury; Social Services, Food Security and Citizenship; Economic Development; Urban Policies; Culture; Planning, Budget and Management; Institutional Affairs and Social Communication; and Government. This working group emphasised the multiple dimensions related to markets’ governance in the city. The group was assigned the responsibility of ‘performing studies and proposing measures to recover and manage the public markets, while keeping them as spaces of conviviality for the community’ (DOM 2017, author’s translation).
It is perhaps surprising that the command of the working group was assigned to the Treasury Secretariat, given the markets’ rather minor relevance for the city’s budget collection and their official place within the SMASAC. Staff approached in the Treasury did not explain why this Secretary was assigned this role but one reason might be that the Treasury controls PBH Ativos – a state company created during Marcio Lacerda’s government (2008-2016) which intensified a neoliberal political agenda in the municipality, and contributes to the legitimization of the commodification of urban (previously public) space in Belo Horizonte. PBH Ativos is owned by the local government and has the function of giving specialised technical support to the municipality in the enforcement of public policies and the realisation of infrastructure projects. It does so by developing fundraising strategies and public private partnerships (PPPs) and concessions. Despite being controlled by the municipality, the PBH Ativos claims to not ‘receive any money from the city treasury’ (PBH Ativos 2019a). However, Canettieri (2017) contests this statement, arguing that what was observed since the company’s creation was the transfer of considerable parts of the city possessions to PBH Ativos.
The above-mentioned governance approach follows the neoliberal strategy of outsourcing, which became ‘a model’ in Belo Horizonte in the last years. However, in the case of the marketplaces’ management, it entails a considerable risk that the new private manager(s) de-characterise the place, increase rent prices, and therefore expel the current traders and users, going in the opposite direction of promoting an inclusive conviviality space. Let us explore now briefly why.
Unpacking the concession process and its risks
The working group decided for a common concession policy mechanism for the markets and PBH Ativos is the entity responsible for all stages of this process. The difference between a PPP and a common concession is that in the latter the private partner charges the user – not the local authority – for the service provided (PBH Ativos 2019b). The model is coherent with the working group’s argument that the municipality has more urgent agendas to cover (e.g. public health and social services), especially in a moment of national economic crisis and a reduction in municipal resources. However, it seems some way contradictory that spaces originally designed as part of the social services’ scope are now meant to be profitable – rather than subsidised.
It is true that the context of (most) markets created before the 1970s has shifted significantly, especially in regards to goods supply which decreased as part of economic crisis and changing consumption patterns. Yet, an approach that ‘gentrifies’ popular (and public) work and consumption spaces by entitling private investors to profit from the retrofitting investment made in those places does not seem the most socially inclusive way to address the public market question. In addition, the council is intending to apply a Higher Offer selection criterion in the markets’ bidding process, meaning that the private partner would be chosen because of how much they offer to pay the council for the markets (and their land) concession. Through the applied rationale, it is shown that the markets are expected to become a source of revenue for the municipality.
There are still numerous unanswered questions of concern for stakeholders operating within public markets: how will the municipality control the private partner’s financial exploration of the markets and keep it in accordance to defined conditions (e.g the maintenance of the current – and rather low – shop tenancy fees for 5 years)? How will the companies regain the millions spent in refurbishments, if complying with these deal breakers? Will the municipality legally bind such requirements through concession contracts? Or will it turn a blind eye to the private manager’s performance if it fails to comply with the agreement? A public session was called in the end of July by the councillor who presides the Human Rights and Consumer Rights Commission. Besides demanding answers from the working group and PBH Ativos, the commission pointed out the fact that the PL 747/19 text is currently short and incomplete, not properly ‘tying’ the private partners’ responsibilities.
The concession is an uncertain strategy for guaranteeing the continuation of ‘the markets as such’, and respecting the ’rights’ of traders and other market users. There is a considerable risk that the new manager(s) de-characterise the place, increase rent prices, and therefore expel the current traders and users, as shortly explained above. In sum, the concession has the potential to destroy the space’s’ public nature, contradicting inclusive social purposes. Consequently, it is hard to deny that this process fits a ‘neoliberal ontology’, summarised as: the privatization of public goods in the state’s possession, combined with the discourse of its failure and the need of privately funding urban public services, argued as the only possible answer to the ‘crisis’ (Canettieri 2017, p. 514, author’s translation). In this context, the drive for the governance of public markets is still unclear but the state’s action (through the commodification of urban land) will likely contribute to the reproduction of inequalities (Magalhães 2016), rather than its alleviation.
Canettieri, T., (2017). A produção capitalista do espaço e a gestão empresarial da política urbana: o caso da PBH Ativos S/A’ [The capitalist production of space and the entrepreneurial management of urban policy: the case of PBH Ativos S/A]. Rev. Bras. Estud. Urbanos Reg., 19(3), 513-529.
DOM.; (2017). Decreto Nº 16.726, de 27 de Setembro de 2017 [Decree Nº 16.726][online] DOM. [Viewed 13 September 2019]. Available from http://portal6.pbh.gov.br/dom/iniciaEdicao.do?method=DetalheArtigo&pk=1184549&source=post_page————-
Janssens, F., and Sezer, C., (2013). Marketplaces as an Urban Development Strategy. Built Environment Journal. 39(2), 169-171.
Lima, A. P., (2005). Falta de Freguês Condena Mercados [Lack of Customers Condemn Markets]. Hoje em Dia. Author’s archive.
Magalhães, F. N., (2016). O Espaço do Estado no Neoliberalismo: Elementos para uma Redefinição Crítica [State Spaces Under Neoliberalism: Elements for a Critical Redefinition]. GEOgraphia, 37, 35-60.
Momondo., (2016). 10 Mercados Municipais pelo Brasil que Valem uma Visita [10 municipal markets in Brazil that are worth a visit] [online]. Momondo. [Viewed 13 September 2019] Available from https://www.momondo.com.br/discover/artigo/mercados-municipais-brasil
PBH Ativos., (2019a). Quem Somos [Who are we] [online]. PBH Ativos. [Viewed 13 September 2019]. Available from http://pbhativos.com.br/a-pbh-ativos/quem-somos/
PBH Ativos., (2019b). Concessões e PPPs – O que é? [Concessions and PPPs – What are they?] [online].