For Paraguay Brazil’s Control of Jointly-Owned Itaipu Hydroelectric Is Absurd

Itaipu hydroelectric For Ricardo Canese, member of the Mercosur Parliament in representation of Paraguay. the asymmetries of Mercosur in power generation are overwhelming and almost absurd, with Paraguay the main power exporter in South America unable to dispose of its energy surplus.

Canese is also the coordinator of Paraguay's negotiating team in the dispute with Brazil over the free disposal and price for the surplus power generated in Itaipu, South America's largest hydroelectric dam shared by the two neighboring countries..

"Any Mercosur power integration without Paraguay is absurd; 85% of all electricity power exports in South America originates in Paraguay which ironically can't dispose of it freely", said Canese during an energy forum in Asunción.

Canese recalls that the Asuncion Treaty, which gave birth to Mercosur, in its first article, states the free circulation of goods, services and productive factors.

"Of all the free circulation of goods and services, Mercosur excluded Paraguay's hydroelectric energy from Itaipu and Yaciretá (shared with Argentina). If this is the main wealth and production of Paraguay, then what does integration mean for us?" asked Canese.

If a poor country like Paraguay can't manage or dispose of its own resources, hydroelectricity, "we're condemned to an underdevelopment vicious circle: an asymmetric process from its very inception".

Canese argued that initial Mercosur rules were designed for the big corporations, and since Paraguay has none, "it was left out and discriminated".

To make things even worse the only Paraguayan production, electricity, "can't circulate freely", because it's Brazil that decides that.

He added that it is unsurprising that Paraguayan tomatoes, bananas, recapped tires can't cross the border to Brazil "simply because Mercosur was not designed for small undertakings. In effect I believe that Mercosur has further punished those small, medium companies".

In the South American trade block asymmetries are abundant: "regarding size and population of its country members; different degree of economic development; entrepreneurship, GDP and per capita income and obviously different advances in areas such as education, science and technology," underscored Canese.

Paraguay only absorbs 5% of its half share of power generated by Itaipu while the rest is sold under contract, dating back to the seventies and at prices from that time, to its partner Brazil.

Lula's administration argues that the difference helps compensate Paraguay's debt from the construction of the major public work almost four decades ago.



  • Show Comments (5)

  • Patrick

    Arrogant Brazilians
    Yes Brasil did supply most of the funding to construct the dam. Paraguay did supply labor skill and un’skilled. It is very funny how Brasilians feel the need to take advantage of this poor country. I think you should try spending more time working on Brasil.

    Make fun of the Paraguayan president as much as you want. At least they have a president who is no pro brasilian business. Por fin a president who feels the need to fight for the people.

    Really is no surprise that the Brasilians are fighting this so much. History has shown us how dirty and corrupt they can be. That became evident in the 1800s after they continued to rape Paraguay after the triple alliance war.

    Regardless, Brasil maybe a nice country to most people, but to someone familiar with South American affairs, they are dirty…cheating..stealers….

    Joao or Sage have you ever actually traveled to the Itaipu dam…. Just curious… probably not…….

  • Patrick

    For Paraguay Brazil’s Control of Jointly-Owned Itaipu Hydroelectric Is Absurd
    As nice as it would be for Paraguay to nationalize the dam they wonÀ‚´t be able to because Brasil will threaten to pull out large investments from Paraguay. I do favor Paraguay in this argument. Brazilians are very arrogant and believe they are always right. Granted Paraguay was not able to front the money for the dam at the time of its construction, that does not give Brasil the right to continually rape them year in and out. The dam has been producing energy for over 20 years I think Brasil has earned back Paraguays side of the debt by forcing them to sell cheap energy.

    I like Brasil but I see the country for what it is. A bandit. Brasil always complains that first world countries are taking advantage of their nation, but in return Brasil takes advantage of smaller countries in the area.

    I see Paraguay winning this dispute in the future. Brasil will not just give up the money for the energy it will be a long drawn out fight, but it is one that Paraguay needs to persue.

    And Sage, yes, Paraguay will export its energy to neighboring countries. It is not an absurd thought. Countries in SA are all facing problems with their energy. Why do you think Brasil doesnÀ‚´t wanÀ‚´t to pay full/fair prices? I do know one thing for sure. If Paraguay were to nationalize their side of the dam and stop selling the energy to Brasil the out come would be far more drastic then if Brasil were to remove their investments from Paraguay. The Itaipu dam provides energy for Brasil mega-business center of Sao Paulo.

    I say Paraguay needs to pull the switch on the corrupt/arrogant Brasilians. It would probably spark an armed conflict where Brasil would show that protecting its assests is more important then regional security.

    Brasil wants to be the “future” but it wont happen with their anticts.


  • João da Silva

    [quote]FUERZA PARAGUAY[/quote]

    El Presidente of Paraguay has been demonstrating his “Fuerza” [b]in[/b] and [i]out[/i] of his PriestÀ‚´s robes for years. The Paraguayans must be be proud of their leader whose “Fuerza” has resulted in numerous “outputs”. 😉 😀

    As for as this dammed DAM business is concerned, “Sage” is absolutely right. It was built with Brazilian money and labor (both skilled and unskilled). If the Paraguayans have any complaints about the contract, better sue the decedents of Herr. General.Stroessner.

  • sage

    in my ‘rear’ view
    i thought u had disappeared in the alps, looks like u came up for air. the dam is not ‘in’ paraguay, it sits squarely on the border between Brazil & paraguay
    most of the investment for constructing the dam came from Brazil. where is paraguay going to export it’s energy – bolivia, chile, switzerland……

  • ch.c.

    In my view……
    Paraguay should Just Nationalize the dams just as Venezuela has nationalized nearly everything that did not belong to them.
    And ALL OPEC nations have done the same for their oil.
    Forget the written agreement made in earlier days just as Chavez the Clown did and continue to do so.
    Same for OPEC nationalizations. Even Ecuador, Mexico and most African nations have nationalized their oil !
    And whether nationalized or not, governments of commodities nations have changed the terms of the initial agreements far more than once.

    What are the brazilians going to say ?
    Are brazilians not thinking to also nationalize their apparent newly discovered mega oil fields ?
    What is the difference ?
    Why is there never ever reciprocity in the filthy minds of arrogants Brazilians !

    What is IN Paraguay…belongs to PARAGUAY…regardless of the initial agreements made decades ago !

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