Itaipu – 50 years

Image: Jens Johnson


“A people that oppresses another cannot be free” (Karl Marx).


The fact that Marxism is not a nationalist current does not mean that it does not recognize and defend the democratic right to self-determination of oppressed nations.


Last March, the president of Brazil, Luiz Inácio Lula da Silva (PT), referred to the country as the “big brother of the countries of South America”. [I] The speech was delivered at the inauguration of former federal deputy Enio Verri (PT) as Brazilian general director of the Itaipu Binacional hydroelectric power plant, in the presence of Paraguayan president Mario Abdo Benítez.

The rhetorical resource certainly intends to cover up the historical expansionist and oppressive role of Brazil in the region, through mechanisms that are far from fraternal, consolidated in the imperial period.

Brazil extends its domination over Paraguay and other South American countries. It's fact. As the strongest regional bourgeoisie, in economic, political and military terms, Brazil penetrates Paraguay through unequal trade;[ii] the proliferation of companies that produce with zero or very low tax, electricity and labor costs, relying on the maquilas regime guaranteed by the Paraguayan governments;[iii] the unbridled expansion of agribusiness, controlled by colonists of Brazilian origin (the so-called “brasiguaios”), in such a way that, currently, it is estimated that 14% of land titles in Paraguay belong to Brazilian landowners,[iv] a powerful sector that violently expels small peasants from their land and commits a series of environmental crimes. In Paraguayan departments like Alto Paraná or Canindeyú,[v] bordering the states of Mato Grosso do Sul and Paraná, the portion of the territory in the hands of these Brazilian businessmen is scandalous: 55% and 60%, respectively.

However, we can say that the main instrument of Brazilian domination over Paraguay – which, we anticipate, neither government intends to change qualitatively – is the Treaty of Itaipu, object of this article.

The scenario in 2023

The Treaty of Itaipu, signed in 1973 by the dictator generals Emílio Garrastazu Médici and Alfredo Stroessner, completed half a century on April 26th.

More than an ephemeris, the date marks the imminent renegotiation of Annex C, which establishes the “financial bases and provision of electricity services”. This is the legal device that, since 1984, guarantees the Brazilian bourgeoisie the lion's share of this bilateral agreement.[vi]

The renegotiation will be up to the governments of Brazil and Paraguay, through their ministries. On the one hand, the Lula-Alckmin government will act, uncritically supported by the majority of the Brazilian and Latin American left. On the other, Santiago Peña, a politician from the traditional and conservative Colorado Party, who will assume the post of new Paraguayan president on August 15.

In the first place, it is very important to define the essence of the question and the main historical and socio-political problems posed by this subject, which, on the face of it, presents itself as merely technical and diplomatic. From there, we are interested in discussing what should be the attitude of the Brazilian and Latin American left, especially that which presents itself as socialist and internationalist.

We highlight this last attribute, which is a principle for Marxists, since a nationalist conception, both in Brazil and in Paraguay, offers a dead end. Nationalism is a reactionary ideology, a deception for the non-property classes, given that this approach makes it easier for the local bourgeoisies to present their particular interests as if they were those of society, of the “nation”. Therefore, Marxism is not nationalist. To this bourgeois ideology he contrasts the conception of the centrality of the perspective of the class struggle and, in this sense, the defense of the interests of the exploited classes against national or foreign bourgeoisies.

The fact that Marxism is not a nationalist current does not mean, however, that it does not recognize and defend the democratic right to self-determination of oppressed nations.

In this context, the starting point is to understand that the case of Itaipu is not an exclusive problem of Paraguay, far removed from the reality and interests of the Brazilian working class. The renegotiation agenda, or even the annulment of the Itaipu Treaty, deserves all the attention on the part of the working class and the left in Brazil, who must assume the unequivocal defense of Paraguay, the oppressed nation, subjugated and exploited by the same dominant class who controls power in Brazil.

In the general population and, consequently, in the left, there is an almost complete lack of knowledge not only about the case of Itaipu, but, mainly, about the historical relationship between Brazil and Paraguay. This reality is regrettable. It can be explained by the discriminatory, xenophobic and racist policy that the Brazilian ruling class has imposed against everything that can be associated with Paraguay. It's time to break the cycle of reproduction of these reactionary ideologies, which divide us as a working class.

For this, it is necessary to know, deepen and debate about the nature of this unequal relationship and how it was built.

A historical relationship of national oppression

To establish the nature of relations between Brazil and Paraguay, it is crucial to understand that, 153 years ago, the second country was destroyed in the War against Paraguay (1864-1870).[vii]

In 1865, a secret Treaty established the Triple Alliance against Paraguay, a political-military agreement between the then Empire of Brazil, governed by Emperor Pedro II; Argentina, recently unified in blood and fire, and led by General Bartolomeu Miter; and Uruguay, the state that joined the alliance after the victory of caudillo Venâncio Flores in a civil war (1863-1865), in which he received political and military support from Brazil and Argentina.[viii]

The Treaty defined in advance not only the distribution of Paraguayan territory and the plunder between the allies, but the obligation to take the war to the last consequences, that is, not to accept any peace negotiation, separately, with the invaded country. It also established the imposition of an unpayable debt on Paraguay, as a concept of “reparation and compensation” to the States that almost erased it from the map.

This document, by itself, proves the conquering intentions of the Allies, in the biggest international war in South American history. After more than five years of war, between 60 and 69% of Paraguay's total population had disappeared.[ix] An atrocious demographic catastrophe. It is very difficult to find another example of such a death rate, in percentage terms, in modern history. Of the Paraguayan survivors, two-thirds were children and women.[X]

Furthermore, about 40% of the territory claimed by Paraguay was annexed by the victors. The economy was completely ruined; agriculture, livestock, and all the technical and modernizing advances introduced in the country since 1850 were dismantled. In the name of liberal civilization and modernization, the use of the Guarani language was prohibited. The national date was changed to May 25, an event related to Argentine independence. Huge tracts of public land were auctioned off to foreign companies. Paraguay, until then without external debt, contracted its first loans with the English bank in 1871 and 1872.

It is cynical to present this picture of death and destruction as a progressive or civilizing fact, as the war propaganda of the Triple Alliance did and, even today, certain chauvinist literature in Brazil and Argentina reproduces it more or less openly.

The reality is that Paraguay is currently one of the poorest and most unequal countries on the continent. A nation doubly oppressed and exploited, both by the hegemonic imperialisms worldwide and also by the Brazilian and Argentine bourgeoisies, the strongest in the Southern Cone.

The successive Brazilian governments, which, as Marx would say, are no more than “a committee to manage the common affairs of the entire bourgeois class”, act in Paraguay – and in other smaller and poorer countries, such as Bolivia – as a sub-metropolis or, if prefer, as a privileged semi-colony. This means that the Brazilian bourgeois State treats these countries as if they belonged to its “area of ​​influence”, expanding the business of its companies and, mainly, of capital and imperialist interests. In short, the Brazilian bourgeoisie exploits and oppresses not only its own working class, but those of other weaker nations, for its own benefit or that of imperialism.

The antecedents of the Treaty of Itaipu

Since the 1950s, Brazil has studied the hydroelectric potential of the Paraná River, especially in the region of Guairá Falls, or Salto das Sete Quedas[xi], with the intention of enabling an industrial development policy, albeit limited and subordinated to imperialist capital.

The problem was that this region had been in dispute with Paraguay since the end of the Triple Alliance War.

In 1954, an iron military dictatorship led by General Alfredo Stroessner came to power in Paraguay, a figure completely subservient to US policy and its regional gendarme, Brazil.

In January 1964, the two governments signed an agreement to set up a mixed commission to study the use of the hydroelectric potential of the Paraná River. Two months later, as is known, a military coup, with the support of Washington, overthrew João Goulart and imposed a dictatorial regime in Brazil.

In the context of the border dispute with Paraguay, in June 1965, the dictator Castelo Branco ordered the deployment of troops on the border and invaded the town called Puerto Renato, in Paraguayan territory. The Brazilian regime alleged the fight against smuggling and guerrilla warfare as a motivation. In October, the Paraguayan boundary commission traveled to the disputed area, but was stopped by the Brazilian military. Asuncion was silent. There was no reaction from the Stroessner dictatorship to these attacks on Paraguay's sovereignty.

On June 22, 1966, after mediation by Dean Rusk, US Secretary of State, the chancellors of the two dictatorships signed the Iguaçu Act. According to that document, the two governments agreed to build a hydroelectric plant in the disputed region and thus take advantage of its energy potential.

The solution to the border dispute would consist of flooding the Salto das Sete Quedas, which would be submerged with the formation of the current lake of Itaipu, a fact that took place in 1982. The disappearance of the Sete Quedas, a natural wonder, was strongly questioned by several local manifestations and environmentalists. The artificially modified area would be declared “belonging in condominium to both countries”. Brazilian troops withdrew only when the disputed territory was submerged.

It is worth recalling a dark anecdote from this episode. The Brazilian Foreign Minister, General Juraci Magalhães, told his Paraguayan counterpart Raúl Sapena Pastor: “My dear friend, as you know, a treaty can be modified as a result of another treaty or as a result of a war. Brazil is not willing to accept a new treaty, what remains to be seen is whether Paraguay is willing to promote another war”.[xii]

Already in 1966 it became clear who would have the privileged part when a definitive treaty was concluded. Therefore, what is now the Itaipu hydroelectric plant was born out of a Brazilian military invasion and one of the biggest environmental crimes ever committed in the region, in addition, of course, to a territorial renunciation by the Stroessner dictatorship.

Seven years later, article 18 of the Treaty of Itaipu established, among others, the possibility of military intervention by the signatory States.[xiii]

It would be laughable, if we consider the enormous asymmetry between Brazil and Paraguay in all aspects that, under any circumstances, a clause of this nature could favor Paraguayans. On the contrary, on more than one occasion, Brazil held military exercises simulating the taking of the hydroelectric plant, the best known of which was in 2009.

The 1973 Treaty

The 1966 agreement defined that the energy produced by the future hydroelectric plant would be divided “in equal parts” between the two countries. If one of them could not consume the entirety of their half, they should offer it “preferably” and at a “fair price” to their partner.[xiv]. It goes without saying that, in advance, it was known that this situation would fall to Paraguay.

The Itaipu Treaty, however, annulled these declarations and imposed the so-called “acquisition right”, that is, the compulsory transfer of unused energy by one of the countries to its counterpart, not at a “fair” or market price. , but at a price fixed by Itaipu itself. In this way, the “preemptive right” became a mandatory assignment, in exchange for “compensation”, whose calculation was never related to the market price.

The issue is that between 1984 – the year Itaipu went into operation – and 2022, Brazil received 91% of the total energy produced by the company and Paraguay only 9%.[xv] This last data, in turn, represents 18% of the half that corresponds to Paraguay. Therefore, in 39 years, Paraguay gave away – not sold – 82% of the energy that, according to the 1973 Treaty, belongs to it.[xvi] This assignment of rights is carried out for a value much lower than that practiced in the market.

In other words, Paraguay is prevented from exporting its own energy to third countries – such as Argentina, Uruguay or Chile, which have expressed interest at some point –, given that it is obliged to transfer it to Brazil.

In exchange for this assignment, Brazil “compensates” Paraguay with a fixed amount. This value has been adjusted since 1984, but updated data indicate that the average price paid by Brazil in this concept is US$4,14 per MWh, when energy import prices in the international market fluctuate between US$80 and US$200 per MWh.[xvii] In the first quarter of 2023, Brazil itself raised around BRL 500 million in electricity exports to Argentina and Uruguay.[xviii]

In 2009, an agreement between Presidents Lula and Fernando Lugo tripled the amount of Brazilian compensation.[xx] This, which was celebrated by the Paraguayan left as a “historical fact”, exalting the figures of both “progressive” presidents, was actually nothing more than a slight increase in the crumbs that fell from the Brazilian banquet. Lula and Lugo solved nothing. According to data from 2022, Paraguay receives from its partner 429,3 million dollars as “compensation for the transfer of energy”[xx]. However, if it could freely dispose of its energy and negotiate it at market price, in Brazil or other countries, it could receive an annual amount close to three billion dollars. It is clear that the Lula-Lugo agreement, so vaunted by “progressivism”, did not change anything substantial. 

You don't need to be an expert to understand the enormous injustice committed against Paraguay's right to use its own energy resources.

The Treaty of Itaipu, in practical terms, is nothing more than a sophisticated looting and corruption scheme that mainly benefited industrial initiatives in southeastern Brazil, mainly in the state of São Paulo. A handful of businessmen and bankers, Brazilians, Paraguayans and other countries, became obscenely rich, supported by military dictatorships. In Paraguay, businessmen linked to Stroessner who lined their pockets acting as minor partners of the Brazilian bourgeoisie are known as the “barons of Itaipu”.

Itaipu's debt

On February 28, the governments and the press of both countries celebrated the payment of the last installment of the debt for the construction of Itaipu. According to the entity, the total amount disbursed was 64 billion dollars.

Since the 1970s, more than 300 financing contracts have been signed, mainly with creditors from Brazil or from imperialist countries, most of them through Eletrobras, a company privatized by the government of Jair Bolsonaro in 2022.

The well-known mechanism of the financial market, guided by corruption, overbilling, uncontrolled growth of interest above interest, made the initial loan of 3,5 billion dollars, contracted in 1974, grow until reaching the astronomical figure of 64 billion in 2023 It is scandalous, especially if we consider that the work would have cost approximately 12 billion dollars.[xxx]

This debt was largely paid by electricity consumers in both countries through our residential electricity bills. However, the worst part fell, once again, to Paraguay, since the debt was paid in equal parts, despite the fact that, as we pointed out, Brazil was left with more than 90% of the energy produced.

It is as if in line at a supermarket there was a person with a cart full of products, and behind there was another person who only bought a bar of chocolate, but, when paying, the first one proposed to the second one: how about we pay for everything half and Midle?

This fact does not, however, prevent businessmen and the Brazilian press from repeating the well-known fallacy that “Paraguay only provided water”, as a way of justifying the benefits of their country. The most extreme go so far as to say that the Treaty actually favored Paraguay more.

This does not correspond to reality, since Paraguay bore the debt costs, including the 4,193 billion dollars that the Comptroller General of the Republic itself, after an audit, considered “spurious”.

The truth is that the debt generated by the work at Itaipu was paid several times over by both peoples, but proportionally much more by Paraguayan taxpayers, who, despite paying half of the charges, enjoyed less than 10% of the energy produced, generating, in practice, , a subsidy to industry in São Paulo and in southeastern Brazil.

On the other hand, let's face it, saying that Paraguay “only put in the water”, in the case of a hydroelectric company, is like saying that, in a gold exploration, a country “only put in the gold”. Brazilian workers were and are being robbed by their country's top executives at Itaipu and by their governments,[xxiii] because an energy that the State buys for 4,14 dollars per MWh or less from Paraguay is resold, on average, for 226 dollars per MWh for residential consumption in Brazil![xxiii]

To measure the weight that this debt had on electricity bills, it is enough to know that loan payments represented around 64% of the cost of energy produced.[xxv]

The exploitation of another nation does nothing positive for the Brazilian people. While a minority of big businessmen and financiers, protected by the governments in place, exploit a brotherly people, the average electricity tariff in Brazil increased 219% above inflation between 1997 and 2022. Therefore, we cannot lose sight of the depth of this lesson: “a people that oppresses another cannot be free”.

A classy and internationalist outlet

The demand for an egalitarian agreement, under democratic bases, which derives from a renegotiation or even annulment of the current Treaty of Itaipu constitutes a democratic problem, related to Paraguay's right to national self-determination. It concerns, specifically, the right to sovereignly dispose of its energy resources, an elementary issue for any nation.

In this sense, we are facing a clear case of national oppression, in which the largest and richest nation, Brazil, exploits and oppresses a smaller and poorer one, Paraguay. This relationship of oppression, as we have pointed out, did not start in 1973, but goes back at least to the XNUMXth century.

In the imperialist epoch, of historical decadence of world capitalism, democratic tasks – national sovereignty, democratic rights and guarantees, the land problem, among others –, curtailed or abandoned by the bourgeoisie, passed into the hands of the proletariat and its social allies, who will be able to solve them unifying democratic and anti-capitalist demands in a single political program, based on the strategy of socialist revolution on national and international scales.

This means that democratic problems are not indifferent to Marxists, who, without falling into the nationalism typical of bourgeois and reformist currents, defend the right to self-determination of oppressed nations.

For this reason, Marxists face the problem of Itaipu like any other national problem: assuming a class perspective, internationalist and inseparable from the strategy of the socialist revolution. In this context, they combat any nationalist or xenophobic posture that causes division between the working class of both countries. Marxism confronts both the nationalism of the oppressing nation and the nationalism of the oppressed nation, but without ceasing to defend its just national rights.

The year 2023 is fundamental for the working class in Paraguay and Brazil. After half a century, the Treaty of Itaipu will be renegotiated, opening a fertile scenario for debates and mobilization of various social and political sectors.

In Paraguay, the working class must not trust the future government of Santiago Peña, business associations or the diplomacy of their country. History has repeatedly shown that the Paraguayan ruling class has always maintained a posture of systematic capitulation to the interests of Brazil.[xxiv]

Stimulating illusions in a possible confluence of interests between “patriotic” businessmen and popular sectors, in the fight for the recovery of Itaipu with a view to “national development”, put in general terms, is a fatal mistake. A historical class analysis reveals that the government and businessmen, in all their shades, have not been and will not be allies of the working class and poor people.

Relying on international organizations, as argued by some nationalist sectors in Paraguay, who innocently think that a complaint at the Hague Court will make the Brazilian bourgeoisie and the imperialist banks retreat in their intentions, is an illusion. This institutional, legalistic and “peaceful” path is a dead-end path for Paraguay.

Only a powerful process of social mobilization, based on a broad education campaign on the subject and with an independent organization, will be able to force a revision of the Treaty in a progressive sense, that is, establishing a new agreement based on respect for the sovereignty of Paraguay .

It is clear that the mobilization of the Paraguayan working class will not be enough. It will be necessary, as we have pointed out, for the powerful working class and the social movement in Brazil to take ownership of this cause and, at the same time, fight side by side with their Paraguayan class brothers.

The Brazilian people, as we exemplify, are yet another victim of this corrupt agreement, which in the last five decades has only enriched a minority.

This fight is unique and indivisible, with no room for nationalism. The only perspective capable of generating a qualitative, radical change is the internationalist conception, in the sphere of analysis and actions.

The Paraguayan working class must understand that its main enemies are the ruling classes and governments of Paraguay and Brazil, not “Brazilians” in general. The Brazilian people suffer the same hardships as the Paraguayan people.

At the same time, the Brazilian working class must understand that Itaipu is not just a “Paraguayan” problem, but an issue that directly affects it, through the unfair charging of electricity. Furthermore, that it is a Treaty of usurpation of a brotherly and poorer people, historically outraged.

Lula said he was sure that "...we are going to reach an agreement that will take into account the reality of both countries and the respect that Brazil has to have for its ally, dear Paraguay."[xxv] In the current scenario, without depositing any confidence in the Lula-Alckmin government, it is necessary to demand, through a strong campaign of mobilizations, a renegotiation that contemplates Paraguay's energy sovereignty, that is, the free disposal of its part. At the same time, denounce every fact, every declaration, every move in the negotiations in the opposite direction. The Brazilian left is facing a trial by fire, given that the renegotiation will be conducted by President Lula, who recently appointed four of his ministers as advisers to Itaipu: Alexandre Silveira de Oliveira, Minister of Mines and Energy; Fernando Haddad, Minister of Finance; Esther Dweck, Minister of Management and Innovation in Public Services; and Rui Costa dos Santos, Minister of the Civil House.[xxviii] They will receive around R$69.000 a month, plus their salaries as ministers of state and counselors at the binational.[xxviii] The Brazilian director of Itaipu, appointed by Lula, is also from the PT.

An independent and, at the same time, oppositional attitude by the left towards the Lula-Alckmin government is a necessary condition for the Brazilian left to be able, in practice, to assume a genuinely internationalist stance, whose starting point, in oppressive nations, is precisely the fight against bourgeoisie and the government itself.

*Ronald Leon Nunez he holds a doctorate in history from USP. Author, among other books, of The War against Paraguay under debate (sundermann).


[ii] Brazil is Paraguay's main trading partner, representing, in 2022, 28,5% of total transactions. Next, are China (18,3%), Argentina (12,8%), United States (6,9%) and Chile (4,8%).

[iii] Approximately 72% of maquiladora companies in Paraguay are Brazilian. To see:;


[v] The departments, in the administrative division of Paraguay, are equivalent to the Brazilian states.

[vi] Itaipu's operations began in 1984. Since then, the company has produced more than 2,9 billion MWh. In terms of installed capacity, it is the third hydroelectric plant in the world.

[vii] SECCO, Lincoln. The war against Paraguay in debate. Available in: Accessed on 04/06/2023. NÚÑEZ, Ronald. The war against Paraguay in debate. São Paulo, Sundermann, 2021, 472 p.

[viii] The Empire of Brazil invaded Uruguay in October 1864.

[ix] WHIGHAM, Thomas; POTHAST, Barbara. The Paraguayan Rosetta Stone: New Insights into the Demographics of the Paraguayan War, 1864-1870. Latin American ResearchReview, v. 34, no. 1, pp. 174-186, 1999.

[X] Talk international debate about the War of the Triple Alliance. Available in: . Accessed on 04/06/2023.

[xi] The Salto de Sete Quedas, also called Sete Quedas do Rio Paraná, were the largest waterfalls in the world. With an estimated volume of 49.000 m³/s, they doubled the volume of Niagara Falls and were thirteen times more powerful than Victoria Falls, in Zambia and Zimbabwe.

[xii] MAGALHÃES, Juraci. My tentative memories. Rio de Janeiro: Editora Civilização Brasileira, 1982, pp. 201-203. General Juraci was also known for another phrase: “what is good for the United States is good for Brazil”.

[xiii] TREATY OF ITAIPU. Article XVIII: “The High Contracting Parties, through additional protocols or unilateral acts, shall adopt all measures necessary for the fulfillment of the present Treaty…”. Available in: .

[xiv] Minutes of Iguaçu. Available in:

[xv] The energy generated by the plant represents 8,6% of the total energy used in Brazil. In the case of Paraguay, energy from Itaipu represents 86,3% of national electricity consumption.







[xxiii] Itaipu is managed by a Board of 12 people, appointed by the Brazilian and Paraguayan governments.



[xxiv] In 2014, Horacio Cartes, Peña's former president and political godfather, told Brazilian businessmen in Asunción: "Use and abuse Paraguay, because, for me, it is an unbelievable moment of opportunity."



[xxviii] The salary, recently increased, of ministers is R$ 41.650,92, and that of Itaipu councilor is around R$ 27.000.

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