SATURDAY JUNE 02 2001 Power crisis puts Brazil back in the dark age FROM GABRIELLA GAMINI IN RIO DE JANEIRO MILLIONS of Brazilians face a return to the pre-industrial age, with looming cuts threatening darkened streets and homes without electricity. Emergency measures declared by the Government take effect on Monday and are intended to avoid Brazil being left in darkness by the end of the year.

A decree has been issued to cut electricity use by 20 per cent by the end of this month. This applies to poorer homes consuming the equivalent of electricity for a radio, a TV and a fridge. Most middle class urban Brazilians will have to cut use by 70 per cent if they want to avoid 300 per cent fines on bills, or they risk being cut off.

Middle class homes will have to turn off kitchen appliances, large fridges, freezers, electric showers, stereos, washing machines and air conditioners and resort to fluorescent lightbulbs selling on the blackmarket at £20 apiece.

Rationing starts in earnest next week but many have started making reductions in the hope of getting favourable cutback targets from electricity suppliers. Skyscrapers have cut off air conditioners and operate only service lifts.

Families with ailing relatives at home have resorted toexpensive diesel generators to prepare for the predicted blackouts. Only the country’s biggest state-run hospitals will be spared from rationing. Shopping centres are turning off escalators and reducing opening hours while cinemas and theatres will have to cut showings.

Bread prices are expected to soar as most bakeries have relied on electric ovens. One maker of old coal irons in Rio de Janeiro has seen an unexpected rise in demand for his product. “I used to make irons for people who live in remote cattle ranches in the interior, now I am getting requests from all the major laundrettes in Rio,” Joao dos Santos said.

The energy crisis is partly due to the botched deregulation of former state-owned electricity companies. It threatens to leave most of Brazil’s 160 million people without power, and consequently bring South America’s largest economy to a standstill.

President Cardosos blames Brazil’s worst ever electricity shortage on St Peter whom Brazilians see as the patron saint who brings rainfall.

The Government claims that an exceptional drought has left the country’s hydroelectric dams which supply most of the power almost depleted. Key central states such as Sao Paulo — the country’s financial and industrial powerhouse — have for the past four years registered the lowest rainfall since the 1970s.

Shortages were predicted ten years ago and critics have accused the Government of complacency, saying that the authorities passed the responsibility of dealing with shortages to recently privatised electricity companies.

Many say that power cuts are not necessary because dams in the south-east of the country — where rainfall has been normal — are full. However the failure to expand transmission grids to bring electricity from the south-east to the industrial heartland could lead dozens of industries and businesses to bankrupcy.

“It would have been much cheaper to build power lines to expand the grid, then we would never have been in the situation of having to return to post war rationing,” Adilson de Oliveira, of Rio de Janeiro’s Federal University, said.

The Government is betting that a few months of rationing will stave off a total blackout until the rainy season in November. But that is likely to come too late for key industries such as aluminium smelting and steel making.

http://www.thetimes.co.uk/article/0,,3-2001190235,00.html

-- Martin Thompson (mthom1927@aol.com), June 01, 2001

Answers

This is really bad news. The New York banks, the really big ones, are in hock up to their ears in Brazil's economy.

-- Billiver (billiver@aol.com), June 02, 2001.

From what I read, Brazil, alone, could drag down the economy of the entire Western Hemisphere. Am I right? I hope I am wrong.

-- Nancy7 (nancy7@hotmail.com), June 02, 2001.

Yes, Brazil can drag down the economy of the entire WORLD. Remeber it imports about 10% of everything U.S. makes. It is the only country that could stop FTAA, besides U.S.. Imagine Panama or Colombia saying they are not in FTAA, would start laughing. But if Brazil's governors did it they would be asking for a military "intervention". For the sake of the "free" trade.

-- Pietro Ferrari (fpietro@netscape.net), June 03, 2001.