WITH FAST, INTUITIVE brush strokes Carlos Diegues" Bye Bye Brazil captures the spirit of an entire subcontinent in the flux of modernization. Rambling from the dusty old town of Pirhanhas in the Northeast where the facades of buildings look like pastel stagesets, to the parched hopelessness of the plains, down into the teeming Amazon jungles and out to the polluted, industrial port cities and the awkward metropolis of Brasilia, the film follows its motley heroes feeling their way from the old to new. Diegues revels in the journey, sketching his way across the country recording the colors and complexities of transitional Brazil with a free hand and both a loving and sardonic eye.

The plot follows the ceaseless tour of the "Caravana Rolidei," a hilariously low-rent travelling carnival under command of Lord Gypsey (Jose Wilker), a tacky magician impresario. With him is his lover Salome (Betty Farish), "the Rhamba Queen," a tawdry sexpot who moonlights as a hooker, and a Black deaf-mute muscleman named Swallow. When this troupe rolls into Pirhanhas they become the way out for an idealistic, accordion-playing farmboy. Cico (Fabio Junior), who fears an existence rooted in the sleepy backlands and joins the outfit with his pregnant young wife. The old pros and the innocents rattle together from one poor village to the next hawking the worldly pleasures of vaudeville to a public more likely to pay admission in melons than in cash.

That lifestyle can't last--at least not without some adaptation. The dated caravan is running up against the changes that come with the modernity overtaking Brazil. Huge American Caterpillar bulldozers are ripping through the jungle, and the "fishbones" of TV antennas poke up everywhere. In one hamlet, Gypsy and Salome explore the apparently deserted town, wondering whether to present their show, only to find the entire community sitting in churchlike attendance on a single, tiny TV screen glowing with disco action from the dance floor of "American Bandstand." Searching for towns where progress has not yet stolen their audience, they take their ramshackle operation into the interior and finally are driven to big cities buzzing with the din of portable radios and the "civilized" hustle of discos, drug deals, and leisure suits. More and more, the troupe's show business must take a backseat to the oldest profession, and Lord Gypsy is forced to consider a proposition to join a smuggling racket.

WIEGUES NEVER STRAYS from the visceral tingle of the provocative landscape and the physical existences of the characters. The rich, hot colors of Brazil--lush greens, electric blue seas, lurid sunsets--seem charged with surreal power; even the pastels seem energized, and the slums are unfailingly photogenic in their squalor. The enchanting promiscuity of the landscape, the vagabond itinerancy, and the no-sweat amorality of the characters keep the narrative amiably in motion, unburdened by overt lecturing or tedious symbols. The native Cico, who might have been pressed into the boring documentary role of "yokel-from-the-primitive-hinterlands-who-learns-the-modern-world-fast-and-succeeds-in-the-city," more realistically straddles the two worlds, both awkwardly and heroically. He is the idealistic primitif, yet when the show busts, he promptly follows Lord Gypsy's lead in sending out his wife as a prositute. But then again, when he sees her being picked up by a member of the new Brazilian bourgeoisie he files over to save her, screaming, "Not with him," and flailing away with great matrimonial passion. Diegues deftly speaks his mind about the mixed blessings of developments, scouring many satirical points against the iniquities and displacements it brings, but he always remains close to the land and the simple feelings of the people whose lives are left in the lurch.

Beyond the exotic cinematic locale and roguish approach, the clearest assets in Bye Bye Brazil are Jose Wilker and Betty Fariah as the veteran troupers. Wilker seems to have only two expressions--an unconvincingly heroic sternness and a wonderfully fatuous smile of beneficence--but he deploys them willingly. He provides a continual comic center to the film with his sly corruption and his charmingly sleazy hokum, often delivered at omnipotent volumes over what one suspects is the only amplifier in the Brazilian backlands. Diegues subtly uses Wilker's ridiculously inept shamming to represent more seriously the modern demand to sell out and adapt. One of the blackest jokes in the movie occurs when Lord Gypsy annoints his draught-plagued audience with bogus snow to the crooning of "White Christmas;" Gypsy proclaims "I can make it snow in Brazil like it does in all civilized countries." His ironic tone suggested he knows what it takes to get ahead in that world.

WERE SOON SURE he knows when he appears at the end of the movie with a new truck for the "Caravana," red-light-district-on-wheels, complete with a trio of dancing girls and a huge neon hand flashing the finger at three second intervals. Whether dancing or sizing up her latest admirer, Fariah displays a weary amusement and a matter-of-fact satisfaction in her own eroticism that reminds us strangely of an equatorial Wife of Bath, a figure of all womanhood. And young moderns will appreciate the Femme fatale's Cheilike pink cat's-eye sunglasses. In both these wandering gypsies, there is a touching mingling of the pathetic and the gallant, making them especially moving studies of a developing civilization.

Despite its excessive length and occasional splotches of unfortunate writing, Diegues's travelogue faces a world in wildly confused flux and preserves the fare complexity of response demanded by the subject. He handles the contradictions of daily life--the ones that give the movie a surreal ambience in details like, an old Indian woman newly dislocated from her tribal existence listening raptly to the Everly Brothers on her Sony or the appearance of Polices in rustic back country hamlets--with a comic finesses that never excludes serious meaning, yet never preaches it. Diegues remains oddly hopeful as he charts Brazil's delirious, stumbling trip into the modern world, celebrating the zest of the new Brazil even as he laught at its absurdities. This third World production has a funky charm and affords a welcome art house alternative to frothy French comedies and intellectual German angst.