US embassy cable - 05RIODEJANEIRO853

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, Domestic Politics 
SUBJECT: The Separation of Rio de Janeiro City from 
Rio de Janeiro State:  The Debate 
 
 
Summary 
------- 
 
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 
---------- 
 
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 
----------------------------------- 
 
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 
 
SIPDIS 
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 
------- 
 
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