MercoPress. South Atlantic News Agency

Brazilian president still recovering from pneumonia cancels trip to Paraguay

Dilma Rousseff was planning to soothe Paraguayan neighbours with the payments agreement

Brazilian president Dilma Rousseff cancelled on medical advice Sunday’s trip to Asunción where she was scheduled to participate in the bicentennial celebrations of Paraguay’s independence.

The medical recommendation was described as an ‘act of caution’ since the president has still to fully recover from a mild case of pneumonia two weeks ago.

Doctors recommended the Brazilian leader not to be exposed to the fatigue of a round trip to Paraguay on the same day, which would involve six hours in an aircraft.

The Brazilian president will be represented at the ceremony which will convene most Mercosur and regional leaders by Foreign Affairs minister Antonio Patriota, according to a release from the Planalto Palace.

The surprise change of plans has set off concerns about the health of President Rousseff who was diagnosed with pneumonia last April 30. Since then she has significantly restricted her work agenda.

Furthermore two years ago Ms Rousseff underwent surgery in Sao Paulo for the extirpation of a lymphoma and was later submitted to four months of chemotherapy. The medical team at the time said she was completely recovered.

The visit to Asunción was important not only because of the celebration and meeting with other leaders but because Ms Rousseff was planning to confirm the trebling of the amount Brazil pays Paraguay for the power generated at the bi-national hydroelectric complex of Itaipú, the world’s largest operational dam.

The sum following this week’s approval by the Brazilian congress and a long acrimonious debate jumps from 120 million to 360 million US dollars.

Brazilian opposition claims the increase will necessarily have an impact on electricity bills.

The bill was sponsored by Senator Gleisi Hoffman, a former Itaipú board member and close friend of Ms Rousseff, who argued the decision would not have an impact on Brazilian home consumers.

“The Treasury is picking up the difference”, said the Senator.

The ruling coalition said that the increased payment to Paraguay is in the framework of Brazilian good-neighbour policy to stimulate development in Mercosur member countries and reduce the asymmetries inside the block that also includes Argentina and Uruguay.

“We’re talking of a neighbour where 60% of the population lives in poverty” said Senator Humberto Costa from the ruling Workers party.

The agreement to review payment and conditions for Paraguayan power from Itaipú was agreed in July 2009, in Asunción by President Fernando Lugo and former president Lula da Silva.

The terms of the agreement which meant changing some of the wording of the original contract dating back to 1975 had a slow cumbersome process in the Brazilian congress.

The Lower House endorsed it at the beginning of March, and approval by the Senate took less than three weeks because of intense lobbying from President Rousseff who wanted to arrive Sunday in Paraguay with the issue solved.

Itaipú provides 25% of Brazil’s electricity and 85% of Paraguay’s. However under contract Brazil absorbs almost 90% of the power generated and has been paying Paraguay for its surplus share rates dating back to the original clauses.

This has become a serious irritation for Itaipú partners with Paraguay demanding from Brazil a fair price or if not allowed to sell its share of power in the Brazilian spot market or to Mercosur neighbours. Brazil argues Paraguay never fully paid its share of the billions invested in the construction of the dam or the interests on loans.

Some contract terms can only come under review in 2023.

After long discussions, Lula da Silva and Lugo came up with the current solution that partly solves Paraguayan claims.