ENERGY-BRAZIL: Rationing Measures Will Upset Daily Life

By Mario Osava Reprint | | Print |

Mario Osava

RIO DE JANEIRO, May 18 2001 (IPS) - The Brazilian government introduced its first energy rationing measures Thursday, including a 35 percent reduction in public lighting and the suspension of nighttime sporting events.

The restrictions that went into effect as of today affect the southeast, northeast and centre-western portions of the country, where 78 percent of the country’s population of 170 million is concentrated, and which are suffering power shortages.

The decision has already begun to affect the calendar for Brazil’s national football championship. A Thursday evening match in Sao Paulo, the country’s largest city, was rescheduled for the afternoon.

The government of Fernando Henrique Cardoso plans to implement further measures in the next few days which will upset the daily routines of the entire population.

Authorities also announced that if the resultant cut in consumption was not sufficient, scheduled blackouts would have to be imposed.

Government officials’ at times contradictory references to the emergency rationing plan have caused alarm and triggered a run on stores for candles, flashlights, kerosene or battery-powered lanterns and generators that run on petrol or diesel fuel.

The business community, meanwhile, is complaining about a 20 percent reduction in industry’s energy consumption, which the government says is necessary. Companies argue that it will lead to the dismissal of tens of thousands of workers.

Industrialists also protest that the reduced availability of energy will limit production, and thus drive up inflation, which had already risen to two percent by April, according to government figures. Brasilia has pledged the International Monetary Fund that it will keep inflation below six percent this year.

Moreover, experts predict that economic growth could fall by 1.5 percent this year, to less than three percent, and are talking about the possibility of a recession as a result of the power outages.

Exports will drop by nearly 1.6 billion dollars this year, according to Fernando García, a professor at the Getulio Vargas Foundation in Sao Paulo. Despite the sharp depreciation of the local currency, the real, the trade deficit has become one of Brazil’s most pressing economic concerns.

Police in the big cities warn of a possible rise in crime, due to the proven correlation between violence and lack of public illumination in the streets.

Other fears involve a collapse in the hospitals, most of which do not have their own generators, with the consequent deaths of people depending on artificial life-support systems, nightmare visions of elevators becoming dark traps, and even chaos in urban transport, when stoplights cease to function.

The government, business, analysts and social groups agree that this is the worst energy crisis in Brazilian history.

Sporadic blackouts were frequent here up to the 1960s. But since then, Brazil has undergone a rapid process of urbanisation, and urban populations are totally dependent on electricity today.

The energy rationing plan will be “the gravest blow” for Cardoso at a time when his popularity is already in the dumps, due to the country’s economic difficulties and a series of corruption scandals, Marcos Coimbra, the director and owner of the Vox Populi institute, told IPS.

Political questions like denunciations of corruption in the government have an impact on a well-informed minority, but power cuts “profoundly complicate the daily lives of everyone,” said the pollster.

“The political costs will be high,” especially if the rationing lasts six months as predicted, said Coimbra, who pointed out that the measures would hurt the electoral chances of the centre-right ruling coalition, which is already facing difficulties coming up with a consensus candidate.

The energy crisis is the result of a severe drought that hit many regions last year, and was aggravated when the rains failed this year.

Water is synonymous with energy in Brazil, where 90 percent of the power supply is generated by hydroelectric plants. The water level in reservoirs in the affected regions currently stands below 30 percent of capacity.

But this problem has not come as a surprise, complain experts on energy, who for several years have been warning authorities on the risks posed by insufficient investment in the power industry.

Joaquin Francisco de Carvalho, an adviser at the Institute for the Strategic Development of the Energy Sector, said privatisations were to blame.

The government sold off some of its power companies with the aim of expanding energy generation with the help of private capital. Investors, however, did not share the same interests, and were only out for profits, said De Carvalho.

In the meantime, the companies remaining in the hands of the state stopped investing as they waited to be privatised.

Nor was the capacity to transmit energy expanded in Brazil. Excess rainfall in the north and south means there is more than enough electricity in those regions, but no way to carry it to the areas in need.

The government now aims to accelerate the construction of gas- fired thermic power plants, as well as a few more hydroelectric plants. In order to do that, it must expedite environmental permits and get around lawsuits standing in the way of several of the projects.

But the law requires environmental impact studies for all large works, as well as consultations with affected populations, in order to prevent “poorly designed” dams, said Glenn Switkes, Latin America coordinator of the International Rivers Network.

Nevertheless, the crisis has a “silver lining,” say environmentalists, because it is encouraging the rational use of energy and fuelling the search for alternative sources. It has also raised questions about industries that consume large amounts of energy, like the aluminum industry, which uses a full six percent of the country’s power supply and generates few jobs.

One measure that could be adopted at this time would be to temporarily freeze the aluminum industry, suggested former minister of education, science and technology José Goldemberg.