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Nuclear Power

Nuclear energy provides an interesting chapter in Brazil's energy policy. In the early 1970s, nuclear energy was considered to have great potential, but it failed to develop. In 1975 Brazil signed an agreement with the Federal Republic of Germany (West Germany) under which that country would supply eight nuclear power reactors and transfer technology for the complete nuclear fuel cycle. A small nuclear power plant--the Angra I, which has a 626-megawatt capacity--was built near Rio de Janeiro, and work was programmed to start on two larger facilities on the same site (the Angra II and III units, which were to have a combined capacity of 3.1 million kilowatts).

The Angra I plant, which has a reactor supplied by Westinghouse Electric Corporation, was completed and trial runs were made in 1982, but reactor defects delayed operations until 1983. Moreover, technical problems allowed the facility to function only intermittently. Regarding the Angra II and III plants, construction was started on the first. However, the fiscal crisis, a slower than anticipated growth in the demand for electricity in the 1980s, the adverse United States reaction to the Brazil-West Germany agreement, and a growing environmental militancy in Brazil led to slowdowns in construction.

In 1985 the agreement with West Germany was revised, and the construction of the other reactors was postponed indefinitely, in part for financial reasons. Moreover, growing fiscal difficulties led to an interruption of construction on Angra II and further postponement of Angra III. In 1988 it was estimated that the completion of the two plants would require US$2.8 billion, which was not available. In the early 1990s, there were no indications of when the two facilities would be completed. Despite the delays, the technology transfer clauses of the agreement have been maintained, and Brazil has continued to receive West German nuclear technology.

In 1990 Brazil's uranium reserves were estimated at 301,500 tons, or the equivalent of 2.1 billion tons of petroleum. A yellow-cake (see Glossary) factory and a plant to produce nuclear fuel elements have been completed, and additional processing facilities are under construction or planned. These will allow for the enrichment of uranium and the reprocessing of spent fuel. However, as was the case with the power reactors, lack of resources has slowed down developments in this area. In early 1997, the Brazilian nuclear energy program was being supplied by the only uranium mine operating in Brazil, in Poços de Caldas, Minas Gerais State. That mine is being deactivated and replaced by the Lagoa Real/Caetité Mine in the Caetité District in southwestern Bahia State (see Nuclear Programs, ch. 6).

The Services Sector

In 1950 Brazil's services sector was still small and, except for certain segments associated with international trade, quite undeveloped. With industrialization, the sector expanded and underwent considerable changes. By the early 1990s, it had developed an important modern segment, mainly composed of parts of the subsectors of commerce, transportation, communications, finance, and professional services. However, other subsectors, especially education and public administration, failed to develop adequately.

Moreover, an informal economy, a large portion of which was in the services sector, expanded as a result of poverty, the rapid rise in population, the inadequate provision of education, and the succession of economic troubles since 1980. This expansion can be seen by examining the services sector's share of GDP and employment over time. Between 1950 and 1980, the services sector generated around 50 percent of the country's GDP; by 1993 the share had increased to at least 41 percent but possibly as high as 55.9 percent, in part because of industry's poor performance but also because of the informal sector's expansion. The share of the services sector in the absorption of manpower is also evidence of the recent growth of the informal sector. In 1950 the services sector employed only 22.5 percent of the total economically active population (see Glossary); this proportion rose to 33.3 percent in 1970, to 40.8 percent in 1980, and, in a sharp rise, to 57.4 percent in 1992.

Data as of April 1997

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