There seems to be a window of opportunity opening up for some of Rio's favelas, specially now that this happened in Rocinha .
Focusing on Rocinha below is a description of the place by a writer called Paul Berger.
"Probably the most surprising aspect of our visit to Rocinha was just how many goods were on offer there. It was almost a city within a city, with hairdressers, bars, restaurants and stores as well as plenty of garages for repairing motorcycles. Rocinha even has a private cable television station, a radio station, two community newspapers and two official banks"
The article can be found here.
Legal businesses fostering economic development is always good and one activity that has included favelas into their scope is tourism. I researched the subject matter and arrived at this well balanced piece, featuring both pros and cons.
Another good source for learning about favela related issues is a blog authored by a native, bi-lingual Rocinha resident called Zézinho. His work, in English, is linked below.
I wish he used tags in his blog though. It would make it easier to find things like this excellent article containing info that is really hard to come by, even with Uncle Google's help.
Anyway I have babbled on for far too long here (my other posts, which are short and concise, have probably committed suicide by now). So I'll wrap it up with an interview featuring Prof Edward Glaeser whose book "The Triumph of the City" is a great way of looking at how a place like Rocinha could be, and in various aspects already is, a great asset of Rio de Janeiro.