Itaipú Dam was responsible for a massive transformation in Brazil and Paraguay, spurring economic growth in the 1970s and 1980s construction boom, providing electricity to fuel industry in São Paulo and Rio de Janeiro, and developing human capital in both countries. The dam once again has the potential to be a game-changer in Paraguay.
For this policy brief, we first analyzed the situation of Itaipú Dam andhydroelectricity in Paraguay with an eye to questions of economic and social development in order to then identify particular, context-situated, challenges. Per the standard expectations for policy analysis, our research methodology required that we rely upon publicly available, published information. Based on the Paraguayan context challenges, opportunities, and needs, we then explored actually-existing sustainable solutions worldwide that served as models for what Paraguay could do in order to leverage Itaipú Dam for growth that is ecologically and economically sustainable, politically viable, equitable, and inclusive.
The purpose of this text is to open conversation, not to be the final word. While our target audience is policy decision-makers, we believe that this document and the issues therein should be of interest to other sectors in Paraguay as well, including university students (and their professors), the business and start-up sector, NGOs, and Paraguayan civil society. Because we expect that our primary audience is familiar with Paraguay, we begin directly with Itaipú Dam and include the macro-context only briefly.
A note on language: though this discussion draft is first being disseminated in English, it will soon be available in Spanish and we anticipate its translation to Portuguese as well. In part, this arises because the authors are based at Duke University in the United States. But it is also the case that we are convinced that the lessons learned from Paraguay will have implications for water management and sustainable growth worldwide. And so, we hope that members of the international community will find content of interest in the text, too.
Support for this research and writing came through the generosity of the Duke Center for Latin American and Caribbean Studies, the Duke Brazil Initiative, the Duke Energy Initiative, and the Franklin Humanities Institute-Global Brazil Lab. The positions expressed in this brief are representations of the authors’ only and not these organizations’ positions. We thank the dozens of Paraguayans who lent their expertise and opinions to this working draft. We thank faculty experts at Duke and engaged undergraduate and graduate student audiences who dialogued on the finer points of energy and economics. And we especially thank the young people of Paraguay, who inspired this project. Aguije.
TABLE OF CONTENTS:
1.1 Itaipú Binational Dam Basics
1.1.2 Energy Sales and Tariff Pricing
1.2 Paraguay Energy Basics
1.2.1 General Information
1.2.3 Government Use of Hydroelectric Financial Resources
1.3 Paraguay General Information: Macro Context
2.ASSESSMENT: OPPORTUNITIES AND RISKS
2.1 Dutch Disease Effects on Economic Development and Governance
2.2 Electricity Infrastructure, Access, and Equity
2.3 Increased Demand vs. Operative Lifespan of Dam
2.5 Inadequate Dispute Settlement Mechanism
2.6 Public Perception of Renewable Energy
2.7 Climate Change
3.DIAGNOSTIC: GOVERNANCE CONTEXT & ACCESS TO INFORMATION
Report by Odette Rouvet, M.I.D.P. (Sanford School of Public Policy)
4.RECOMMENDATIONS: SOVEREIGNTY, INSTITUTION BUILDING & CAPACITY BUILDING
4.1 Recommendation #1: Public Communications Strategy to build citizenry support
4.2 Recommendation #2: Itaipú financial benefits should be strategically invested via a Natural Resource Fund because they are a finite and limited resource
4.3 Recommendation #3: Strengthen Energy Sector
4.4 Recommendation #4: Invest in Industrialization → Itaipú Technology Park as Business Incubator & Accelerator