The Separation of Rio de Janeiro City from

UNCLAS SECTION 01 OF 03 RIO DE JANEIRO 000853

SIPDIS

STATE FOR WHA/BSC, WHA/PDA-LGOULD, DS/ITA AND
DS/IP/WHA

E.O. 12958: N/A
TAGS: PGOV SOCI PHUM BR
SUBJECT: The Separation of Rio de Janeiro City from
Rio de Janeiro State: The Debate


Summary
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1. Thirty years after the creation of the new State of Rio
de Janeiro, which occurred in 1975 with the fusion of the old
States of Guanabara (the city of Rio) and Rio de Janeiro, a
group of prominent residents of the city of Rio de Janeiro
initiated a campaign for the separation of the City of Rio de
Janeiro from the State of Rio de Janeiro. The idea is to
create a city-state with a modern administration, separate
from the Baixada Fluminense and the interior of Rio de
Janeiro State. "De-fusion" is generating strong public
debate, going from promises of increased control over the
city's administration and with concomitant economic upsurge
to a fear that the folly undertaken in 1975 should not be
repeated, whatever the promised results. At least some of
the energy and frustration in the proposal may derive from
the desire of "Carioca" residents to be quit of the Garotinho
couple, Rosinha (current governor) and Anthony (previous
governor),who have administered the state for nearly six
years, created tense relations with the federal and municipal
governments, and still maintain a strong populist base in the
countryside which has kept them in power.

Background
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2. In 1975 during the military regime, the State of
Guanabara (city of Rio de Janeiro) was fused with the old
state of Rio de Janeiro, and the new State of Rio de Janeiro
was born. The former State of Guanabara had tremendous
cultural, economic and political influence, while the former
State of Rio de Janeiro, with its vast territory outside the
City, was strong in agriculture. The decision to merge
Guanabara State, with its restricted territory and very
specialized manpower and financial resources, with a state
(Rio de Janeiro) with vastly more territory, seemed natural.
At the time, both regions were losing ground in the country's
economy. The military government wanted to transform the new
State of Rio de Janeiro into a dynamic industrial pole, with
a powerful agro-industry, such as found in the State of Sao
Paulo. By nominating an admiral to be the governor, the
dictatorship diminished the power of opposition to the
dictatorship at the same time.

Different Opinions, Hot Discussions
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3. Economist Paulo Rabello de Castro, the "father" of the de-
fusion project and author of a detailed study on the creation
of the new city-state of Guanabara, thinks de-fusion is the
only real chance to rescue the City of Rio from continuing
degradation. He believes that as a city-state, Rio would
have its own police, its own government, avoiding duplication
of government administration, thus decreasing the total
number and cost of political jobs. He stresses that Rio
could have a large and strong economy based on services -
tourism, sports, design, national and foreign financial
services, scientific research, education, etc. The new city-
state of Guanabara would have nine million inhabitants and
Brazil's third GDP of Reais 100 billion (approximately USD 42
billion). Rabello de Castro argues that the fusion in 1975
was forced on the people by the military dictatorship, and
after thirty years, it should at least be seriously debated.
He suggested a plebiscite.


4. According to Maria Silvia, former Municipal Finance
Secretary and former President of Companhia Siderurgica

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Nacional (CSN),the crisis in Rio de Janeiro city is sharper
than in any other Brazilian city. During a period of fifteen
years (from 1960 to 1975),Rio de Janeiro suffered three
major political-administrative changes -- the transfer of the
capital to Brasilia, the creation of the State of Guanabara
in 1960, and its fusion with the State of Rio in 1975.
Anthropologist Roberto DaMatta said that the fusion of 1975
traumatized the city. Subsequent administrations were
incapable of dealing with public security, health, education,
transportation, or the environment, according to DaMatta, for
lack of a new self-image and inability to accept the City's
reduced role in national affairs. Rio was the political,
cultural and administrative center of Brazil from 1763 to
1960; it was the capital of the Republic from 1889 to 1960;
and it was recognized since 1834 as a "neutral city" - one
that was unique and special. How does a city with this kind
of history transform itself into a "mere" state capital?


5. The Governor of Rio de Janeiro, Rosinha Garotinho, is
vigorously against the idea of separating Rio City from Rio
State. She believes that the capital of Rio would not
survive without the development of the interior of the state,
where important industrial poles like oil and gas are
located. Hugo Leal, a lawyer and member of the current state
government, stressed that the argument that the City would be
better off standing alone - free from the Baixada Fluminense
and the interior of the state - is erroneous. He pointed to
investment and development outside the city of Rio, which
have been growing apace - fruit plantations in the northeast,
the petroleum industry on the northern coast, the metal-
mechanical pole in the south Fluminense area, the re-
establishment of the naval industry, and the gas-chemical
pole in the Baixada Fluminense are all products of the
government and industry working together, creating jobs
throughout the state. This distribution of investment and
jobs is slowing the migration of the poor to the City of
Rio's favelas (shantytowns) - one of the major problems the
City has had to face in its history. Workers' Party (PT)
Mayor Lindberg Farias of Nova Iguacu in the Baixada
Fluminense takes a less generous view of the motivations of
those interested in de-fusion, accusing the "elite" of the
Zona Sul in Rio City of wanting to keep all the money of the
city to itself, calling the call to create a city-state of
Rio "autistic." He noted that many of the people who work in
the City of Rio live in the Baixada Fluminense; he finds it
niggardly on the part of the rich to resent spending money
outside the City on streets and health care and other
services for the workers who serve them.


6. Other opponents to the idea, like the President of Rio de
Janeiro State Federation of Industries (Firjan),Eduardo
Eugenio Gouveia Vieira, criticized the concept of de-fusion,
saying that this proposal has no planning or technical basis
and is repeating the same mistake made in the past when the
capital was transferred to Brasilia. He said that in the
future, the process of de-fusion would bring considerable
fiscal disadvantages to both states. Besides this, the re-
distribution of the state's indebtedness would lead to the
non-compliance with the limit of indebtedness established by
the Law of Fiscal Responsibility. Gouveia Vieira questions
those behind the proposal. Approximately 45% of the
population of the State of Rio de Janeiro was born after the
fusion and another 82% was either an adolescent or a child at
that time. This means that for the great majority of Rio
inhabitants, Guanabara means only a name of a famous and
polluted bay. Gouveia Vieira criticized the lack of
consultation with, for example, federal Deputies and Senators
who represent the State of Rio de Janeiro in Brasilia, or
other influential organizations, like Firjan.


7. Another opponent, Tito Ryff, Rio de Janeiro State
Secretary for Planning, said that de-fusion would not solve

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any of the city's problems but rather create new ones. The
new city-state would have to assume some very expensive
functions that are now the State's responsibility. He
provided some examples like the present police force that
operates in the City, some State hospitals and schools
located in the city, plus social security (previdncia)
payments. These four functions together represent expenses
of more than Reais 4.5 billion (approximately USD 1.8
billion). Ryff believes that the city's talent is in the
provision of a modern economy, an economy of services,
tourism, information, culture and leisure. Such a modern
economy interacts with the industrial economy and, in certain
cases, with the agricultural economy, both of which are
undertaken outside the City, precisely in the Baixada and the
interior that proponents of de-fusion seek to disadvantage.

Comment
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8. The possibility of the re-creation of a city-state in
Rio, as it was during the golden years of 1960 through 1975
as the old State of Guanabara, brings intense emotions to
those who support it. Some opponents like Rio de Janeiro
Senator Saturnino Braga opined that between the lines of the
proposal one could read the dissatisfaction of the
inhabitants with Rio's Governor Rosinha Garotinho, and her
husband Anthony Garotinho, both of whom came from the
interior, and were elected by the rural population of the
State. This should not, however, be a reason to support de-
fusion, in Braga's opinion. This opinion was conveyed to the
Consul General by many of his interlocutors and was the
subject of heated debate at a recent Rotary Club luncheon.


9. Pol/Econ specialist spoke to an economist at Getulio
Vargas Foundation, who doubts that de-fusion, thirty years
later, will be the solution for the problems of the City of
Rio de Janeiro (former Guanabara State). He said the fusion
in 1975 brought many benefits to Rio de Janeiro, including a
more visible position on the national stage than it had
before the merger (between 1960-1975). He does not believe
the fusion is solely responsible for the city's decline, as
many claim. Bad state and municipal administrations should
likewise be held responsible. If the fusion was a big
mistake in the past, it does not make sense to commit the
same type of mistake again. Very careful analysis should be
done before any action is taken, he stressed, very careful.

ATKINS