Electric power and diplomacy: US-Brazil relations in the Brazilian electric sector, 1945-54

Abstract

Understanding the electricity sector in Brazil in the mid-twentieth century is to be achieved through the analysis of its diplomatic relations. In 1945 the generation and distribution of electricity in Brazil were controlled by two multinational corporations, the Canadian company Light and US company American & Foreign Company (Amforp), while the government still had a very limited role in the sector. Depending on funding for new projects in order to meet the growing energy demand in an economy undergoing rapid industrialization and urbanization, the Eurico Gaspar Dutra (1946-50) and Vargas (1951-54) administrations conducted several negotiations, not only with those companies, but also with international institutions and the U.S. government. Negotiations demanded definition of what would be the role of foreign private companies in the sector, the amount of funding required to meet the demand and ultimately the degree of technical cooperation between Brazil and the US to enable these new projects. In a background where nationalist groups questioned the quality and costs of services of these foreign companies, the Brazilian government needed to establish dialogue between business, society and foreign interests. In short, this article aims to demonstrate how diplomatic negotiation became a crucial arena for both the definition of the strategy of power companies and the construction of the development project of the Brazilian government.