June of 1982. The Seleção directed by Tele Santana enchanted the world with their beautiful soccer. I clearly remember the first game against the USSR (it happened on my birthday, as it very often do). The soviets scored first and Brazil spent the whole game on attack. The equalizing goal came only at 30 min of the second half. With 3 minutes left Paulo Isidoro crossed from the right before the penalty area, Falcão opened his legs for the ball to continue its transversal to Eder who shot one of his cannon balls into the goal. Brasil 2×1 against a strong Soviet team. Paulo Isidoro and Eder (plus Luizinho and Cerezo) being from my beloved Atlético Mineiro I could not get a better birthday present. Three weeks later they lost to Italy and entered history as the another great Brazilian that deserved to win but did not.
June 1982. The same day that Brazil played the Soviets marked the cease fire at the Malvinas (or Falkland) islands. Argentina’s war adventure had failed and the result is that they broke their own treasury, accelerating the end of the dictatorship. As dominos falling, that year would see defaults in Mexico and Brasil. By the end of the year all major Latin American countries were in economic trouble. By the end of the decade all dictatorships had fallen: Argentina, Brasil, Paraguay, Chile and Uruguay.
Redemocratization brought new hope for the favelas. Social movements were now part of the political process and not underground organizations. Newly elected governments in Rio de Janeiro for instance started to recognize the favelas not as a problem (to be extirpated) but as cheap solutions to an enormous housing shortage. Oscar Niemeyer started designing the CIEPS, full time schools built on the periphery of Rio to educate, feed and entertain kids. The largest Brazilian cohort ever was born that year (1982) and is now turning 30, certainly enjoying the best labor market ever since.
But the same crisis of external debt that helped bring the dictatorships down also ensured that the 1980s would be the “lost decade” in Latin America. Brasil, Argentina and Mexico saw their economies stagnate during the 1980s. The effect on the favelas was that the new political liberties were not matched by parallel investments for absolute lack of money (supported by IMF stringent guidelines). Later in 1986 Diego Maradona won the World Cup almost by himself while at home the fresh (and still financially broke) democracies of Brazil, Argentina, Uruguay and Paraguay were cooking Mercosur, starting a collaboration that changed the region’s geopolitics.
Sometimes loosing here helps you win further down the road.