Some Southern Brazilians Want out Disillusioned with the Federal Government and Feeling Threatened by an Influx of Poor Northerners, Germanic Southern Brazilians Seek Independence. but Critics Charge Racism

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IRTON MARX is fed up with fighting Brazil's bad image.

The squalid shantytowns, corrupt politicians, and economic chaos some foreigners associate with Brazil hardly exist in Santa Cruz do Sul, a prosperous, squeaky-clean city of 150,000 in the state of Rio Grande do Sul. Portuguese signs remind visitors that they are in Brazil, but the fair-haired, light-skinned locals seem more a part of Germany or Northern Italy than the compatriots of the Iberian, Indian, and African peoples who dominate the rest of the country.

Furthermore, Mr. Marx can't stand samba. For a good time, he prefers the polka music of the Biergarten. Carnival, he says, is "disgusting."

Marx is so fed up that he wants out. As the leader of the Santa Cruz-based, Pro-Pampa Movement, he is fighting hard for the separation of Brazil's three southernmost states and the creation of an independent Federal Republic of the Gaucho Pampa, the plains area in southern Brazil defined by its cowboy past.

"Brazil is like the old Roman Empire; it is big and falling apart," says Marx, a blue-eyed, sandy-haired owner of a clothing factory and a publishing company. "Our culture and economy are different here in the south. We are part of the first world. We are subsidizing the whole country and getting nothing back. Our high-tech industries are being hurt by Brazil's horrible image of corruption and mismanagement."

Amid Brazil's economic crisis and in the run-up to an April 21 referendum that may restructure the federal government, the Pro-Pampa Movement is probably the most explicit example of longstanding regional bickering over fiscal and political issues.

The movement already has a flag, is issuing identity cards, and claims more than 700,000 official members in Rio Grande do Sul, Santa Catarina, and Parana - the three states he hopes will secede, with a total population of about 22 million. Marx says he wants to adopt the deutsche mark as the currency of the new republic and make German and Italian official languages alongside Portuguese.

Compared to the rest of Brazil, slavery was rare in the south and much of the region is dominated by descendants of immigrants who came from Germany and Northern Italy in the last half of the 19th century. In Santa Cruz and other cities German language is a required subject in school.

The region's "Teutonic" character, Marx says, is threatened by the mass migration of poor, unskilled, and mostly non-white workers from the impoverished Brazilian northeast.

"When we are in the factory working," he explains, "the northeasterner is on the beach. Our republic won't have any preference or prejudice toward any ethnic or religious group, but we want to maintain our way of life. We don't want shantytowns of Rio or Sao Paulo." Real grievances

Even the many political figures and newspapers who denounce the Pro-Pampa Movement's racist overtones admit that its strength is based on real grievances.

"The disintegrating effects of the global economy are happening in Brazil too," said Espacio Camargo, a leading Brazilian historian who has debated Marx. "In the face of this, Brazil has begun to fall apart. I happen to think that this Pro-Pampa Movement is proto-fascist, but it is based on honest concerns."

In particular, Ms. Camargo says, the country's 50-year-old nationalist economic and political model no longer functions. …