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Politics and power: Brazil's energy crunch

President Fernando Henrique Cardoso has come under fire for what critics call a shortsighted energy policy
President Fernando Henrique Cardoso has come under fire for what critics call a shortsighted energy policy  

By Roy Wadia

CNN's Roy Wadia was one of 12 U.S.-based journalists who traveled recently to Brazil as part of the Pew Gatekeeper Fellowship program. The fact-finding trip was sponsored by the Pew International Journalism Program at International Studies (SAIS) of the Johns Hopkins University.

RIO DE JANEIRO, Brazil (CNN) -- Flying into Rio de Janeiro on a predawn morning in June, it's difficult at first to see that Brazil is suffering its worst energy crisis in more than three decades.

The lights of the city glitter seductively, outlining the coastal stretches of Copacabana and Ipanema and stretching into the hinterland of a metropolis that never sleeps.


But check into the Hotel Sol Ipanema, with its breathtaking view of Rio's prime beach, and you'll be greeted with notices exhorting you to help save power by switching off the air conditioner whenever you leave your room.

Hit the road on a city bus tour, and you can't fail to see billboard after billboard urging people to do their civic duty by conserving as much electricity as possible.

A law took effect June 1 decreeing that consumers and businesses had to reduce consumption by 15 to 30 percent. And so far, Brazilians have responded, albeit with growing anger toward the government of President Fernando Henrique Cardoso.

True, the crisis was spawned in large part by a severe drought that has affected hydroelectric power stations supplying Brazil with more than 90 percent of its electricity.

Marta Suplicy, right, mayor of Sao Paulo, hopes the energy crunch will drive Brazilians toward the Workers' Party in upcoming elections
Marta Suplicy, right, mayor of Sao Paulo, hopes the energy crunch will drive Brazilians toward the Workers' Party in upcoming elections  

But many analysts -- and ordinary citizens -- accuse the government of being shortsighted as well. Electricity consumption leaped dramatically in the past decade, with the levels for 1999 some 55 percent higher than those in 1990.

Still, the government failed to invest adequately in the power sector, and generation capacity grew barely 25 percent during the same period. Added to this is the government's widely criticized efforts to privatize the power industry -- a process described by critics as haphazard at best -- further hampered by Brazil's currency devaluation in 1999 and ongoing economic woes.

Pedro Parente readily accepts much of the criticism, even as he searches for solutions. The president's chief of staff and point person on energy policy, Parente apologizes to a group of American journalists at his darkened office in Brasilia on a cool winter evening in June.

Switching on the room lights especially for his guests, the self-described "blackout minister" admits that his government failed to grasp the enormity of the problem as recently as April.

"The situation wasn't realized at the highest levels of government -- it wasn't easily apparent. We had a bad surprise," he said. Surrounded by various charts projecting consumption and shortfalls, Parente tries to put an optimistic spin on the situation.

"If the surprise hadn't been as big and bad, it's unclear whether the situation would have been addressed as quickly as it has," he said. "Also, the country has come together and wants to tackle the problem in a united way."

Parente said Brasilia will invest some 15 billion reis (about $6 billion U.S.) over the next three years in the power sector to help generation capacity match demand and consumption.

Not surprisingly, political opponents are making hay while the lights fail to shine. One of Brazil's key opposition leaders, Luis Inacio Lula da Silva of the Workers' Party, lashes out at Cardoso with increasing ferocity these days, taunting him for the energy crisis.

The rhetoric is all the more heated as Brazil prepares for a crucial presidential election in October 2002. Cardoso is not eligible to run for a third successive term, and whoever succeeds him will help determine whether to expand or stall economic reforms -- including the privatization of the energy sector.

Lula, a perennial presidential candidate with a loyal base among the economically disadvantaged, has indicated that he is opposed to "giving away" the public sector to private investors.

The Workers' Party governs almost 200 cities across Brazil, the most prominent being the largest urban center of them all -- Sao Paulo, with some 20 million residents. Its mayor is Marta Suplicy, an independently wealthy upper-class woman and a psychologist by training. Suplicy sees the energy crisis as a symbol of a larger failing by the government -- what she calls a betrayal of the Brazilian people, a scar on the national psyche.

People in Brazil's poor neighborhoods often illegally tap into power lines.
People in Brazil's poor neighborhoods often illegally tap into power lines.  

"When Cardoso was elected, I had hopes. Yes, he has done more about reform than other governments but still so little. Overall, he has been a big disappointment," Suplicy said. "Look, there's an energy crisis now and worse to come. Privatization has been done in a way without regulations, protection to the consumer -- a disaster in many areas. The distribution of wealth has not improved. The poor are getting poorer quickly -- and much of the wealth still remains with a few."

Lula, Suplicy and their Workers' Party are hoping that anger over the energy shortage will spill over into other arenas where the government has been found lacking.

"There's no doubt the electricity crisis will have a major impact on politics," said political analyst David Fleisher at the University of Brasilia. "It could hurt any government candidate linked closely to this problem or Cardoso. The crisis has hurt Cardoso's immediate legacy, no matter how history ends up viewing his presidency. The 2002 elections will definitely reflect that -- the question is how bad will the taint be." The Cardoso government, however, insists politics is the last thing on the minds of those grappling with the power crisis.

"We are not taking political issues into consideration at all," Parente said. "First things first. We have to find solutions. Yes, we have paid a price for this problem, but we must ensure that the country doesn't pay a higher price as well down the road. Earning the trust of society is tough, but we need to take stock of the situation and act for the good of the entire nation."

As Parente utters those words in his darkened office, and opposition parties rehearse for what promises to be a nasty election campaign, ordinary Brazilians adhere to the energy austerity plan -- waiting with increasing impatience to see when, or if, they will be able to turn on the lights without fear or anxiety.

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