Salvador Emerging as Economic Hub

By Stephanie Foden, Contributing Reporter

SALVADOR, BRAZIL – The capital city of Bahia state – Salvador – may be best know for holding a Carnival rival to Rio’s, and will soon make it onto the global circuit as a host city for this year’s Confederations Cup and next year’s 2014 World Cup. Although Salvador was capital of Brazil until 1763, when it was succeeded by Rio, the country’s third largest city has a population of only 2.48 million according to the 2010 IBGE Census.

Despite the relative small size compared to São Paulo and Rio, Salvador has been emerging into a viable business center, while also reducing the exodus of skilled local professionals for better opportunities.

Ford Motor Company and JAC Motors both have plants in the Metropolitan Region of Salvador, in the city of Camaçari and the auto industry is estimated to bring 3,500 direct jobs and 10,000 indirect jobs to the area.

The unemployment rate in Salvador, if still high compared to Rio’s 4.6 percent, has dropped almost two percent over the past year to a record-low 6.2 percent.

In addition, recent years has experienced a surge in real estate speculation in the financial district, bringing dramatic changes to the city’s skyline. The once deserted region has become impressively dynamic, attracting many international and national developers.

The district’s main avenue, Tancredo Neves bustles with mass amounts of traffic, both foot and vehicle, and skyscraper buildings with impressive modern architecture. The area is the Northeast’s headquarters of global business giants such as German logistics company DHL, while banks and companies like Rio-based, semi-public Petrobras have bought or leased entire buildings.

The Salvador Trade Center twin towers, raised by Salvador-based engineering multinational Odebrecht, alone bring together offices and headquarters that circulate approximately 13,000 people per day, with 4,500 working in the towers.

“Everything in one same area reduces the need to commute,” says Walter Barreto, Jr., former chairman of Bahia’s Real Estate Managers Association (Ademi-BA), for whom the concentration of commercial and residential buildings in one same area also helps relieve traffic.

However, private initiative wasn’t followed by public investment in infrastructure, and Federal University of Bahia’s assistant professor at the Architecture School, Márcio Campos points out, “When we have these high density buildings, we have a total malfunction because we don’t have enough streets in this part of town, we don’t have public transportation to bring together all these people that work here. It is chaos.”

Last Friday (April 5th) it was announced that in two years Salvador’s main bus terminal will be moving to the city’s unfinished subway station (under construction since 1997), while its current location will become another group of buildings. Campos feels that this will only worsen the problem with traffic congestion in the area. “This is absolute suicide in terms of urban planning,” he says.

Another challenge that the financial district faces is environmental. A river flows parallel to Tancredo Neves Avenue, which has become increasingly polluted over time, though both the government and people occupying the area have virtually ignored the problem. As the city prepares to host global football (soccer) fans, officials will be pressed to address the growing pains.