President Federico Franco said Paraguay has long cancelled its debts for the construction of two huge shared hydroelectric dams with its powerful neighbours and demanded Argentina pay for the surplus energy it receives and compensation for flooding Paraguayan territory.
In a strong speech to celebrate the 202 anniversary of Paraguayan independence on Tuesday at the Heroes Pantheon, President Franco said he agreed with US economist Jeffrey Sachs who argued that based on the available data, Paraguay has cancelled its debt for the construction of the Itaipu dam, the largest operational hydroelectric complex in the world, built in the seventies.
The issue is highly sensitive for Paraguayans, since they believe they have been systematically abused by Brazil which built the dam and absorbs almost 95% of the power generated, but insists that their landlocked ‘protectorate’ despite having paid 30.7bn dollars, still has another 31bn to cancel by 2013, when the fiftieth anniversary of Itaipu.
Likewise with the Yaciretá dam shared with Argentina and which absorbs most of the power generated. The Argentine Treasury argues that the Binational Yaciretá Entity has a pending debt of 15 billion dollars from the construction of the complex.
“Here in this sacred place and on this day we affirm that Paraguay has long cancelled the two binational dams’ debts”, said President Franco, adding that regarding Yaciretá Argentina is indebted with Paraguay on two concepts. Number one: compensation for the reservoir flooding of which 80% lies in Paraguayan territory and secondly for the delay in the annual payments (of approximately 130 million dollars) to which Argentina is committed for almost the whole of Yaciretá power it consumes, ‘and at very low prices’.
“True Paraguayan independence will be achieved when our country in equal conditions, as a condominium partner sits to talk with Argentines and Brazilians on the debt situation as we are being demanded by public opinion, the media and every Paraguayan citizen”, said Franco who called on the three branches of government to jointly review “the transparency of the Itaipu and Yacireta treaties signed in 1973 with Argentina and Brazil”.
“In homage to the independence heroes, Paraguay does not need to continue relinquishing our power (which Argentina and Brasil take at bottom rock prices) to develop their capitals and cities. Paraguay needs to make use of all that energy to industrialize the country, create jobs and so never again our fellow citizens are forced by circumstances to look for work in other countries”, underlined President Franco.
The Paraguayan president made a brief recount of events leading to the independence in 1811 starting with the Napoleonic invasion of the Iberia peninsula in 1807 and the Paraguayan victories in the Cerro Porteño and Tacuary battles over the Argentine forces sent by Buenos Aires on 14 May 1811 and led by Manuel Belgrano.
“When we recall the 202 years of that historic date, Paraguay does not need foreign liberators but young Paraguayan heroes that speak Guaraní, with no presence of foreign ideologies be it Bolivarian or anything like it. Just Paraguayan ideology with patriotism and nationalism”, concluded Franco.
President Franco in office since June last year replaced removed ex head of state Fernando Lugo and will be stepping down next August 15 when the newly elected president Horacio Cartes takes office.
Lugo was impeached by the Paraguayan Senate which in an almost unanimous vote removed Lugo and replaced him by then Vice-President Federico Franco. Since the removal of Lugo, Mercosur and Unasur suspended Paraguay from the two organizations and recalled their ambassadors. But the US, EU, Canada and most of the rest of the world continued to have normal relations with Paraguay.
Furthermore the EU has said negotiations for a trade and cooperation agreement with Mercosur will continue formally when all members attend the meetings, implicitly implying that ‘suspended’ Paraguay must be present.