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 The President of Paraguay, Fernando Lugo, is scheduled to make his first official international incursion (and test) next September 17 when he visits Brazil and meets with his counterpart, Brazilian ruler Luiz Inácio Lula da Silva.
The visit was announced Friday, September 5, in Brazilian capital Brasília following a two hour meeting between Foreign Affairs ministers Alejandro Hamed from Paraguay and Celso Amorim from Brazil.
In a brief press conference the officials said they had analyzed bilateral relations, Mercosur and the South American integration process, and other international issues.
Hamed pointed out that Paraguay will support the Mercosur incorporation of Venezuela which remains stalled in the Paraguayan and Brazilian congresses. Uruguay and Argentina have already finished the process.
"President Lugo will wait for the right moment to make the official request to Congress, but I'm hopeful, certain that the newly elected Congress will support the initiative", said Hamed.
Regarding bilateral relations Hamed admitted that Paraguay's claim of higher prices for electricity generated in the shared Itaipu hydroelectric dam, South America's largest, was what most time demanded and was analyzed "in depth."
According to the Itaipu treaty Brazil and Paraguay share 50/50% the 14.000 MW electricity generated but the small landlocked country satisfies its demand with only 5% of the volume, and under contract must sell the rest to its senior partner. And for this Brazil pays annually US$ 300 million, at 1970s prices.
During his electoral campaign Lugo said the price must be reviewed and increased to the correct value in the range of US$ 2 billion, which Brazil rejects.
Amorim said that Brazil had offered to build a high tension line from Itaipu to the capital Asunción, at a cost of US$ 200 million.
Hamed said the Brazilian offering and all issues concerning Itaipu will be addressed next September 17 and "probably that will be the correct moment to seat a technical commission to discuss all which is necessary."
Mercopress
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In my modest opinion, Brasilia should oblige Asuncion with the first (and by far the most important) issue. Because our country much richer than the visiting partner, Brasilia should make a gesture by recognizing the unfairness of the existing arrangement of a fix price based on 1970’s energy costs, which Paraguay has been selling to its neighbor for so long. Granted that Brazil need to recoup the bulk of the investment made (I’m sure Brasilia financed the bulk of the project), yet, 30 years later it should be willing to recognize the unfairness of the current deal for its poorer neighbor… Perhaps a compromise could be found whereas instead of utilizing either 1970 or 2008 energy costs for an “adjusted” treaty, perhaps it could settle of the figure for, say 1995, along with a clause calling for further “adjustments” every 10 years.
Regarding Venezuela’s admission to Mercosul (suggesting that Hugo Chavez is likely to be found - behind the scene - pressuring to the Paraguayan government), I would strongly suggest that the Brazilian Senate continues pursuing its steadfast, uncompromising position against such unreliable and potentially dangerous new member! Such formality should be postponed until such time with the “light of freedom and reason” returns to Caracas with the election of a new President (an event which appears unlikely to occur in the short term).
Either way, I hope Brasilia and the government elite, will be sufficiently gracious to make the visiting (poorer and politically weak) president welcome by making his visit to be perceived as “relevant”…