BRAZIL AND THE NUCLEAR QUESTION

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 06859451
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 11
• Document Creation Date: March 9, 2023
• Document Release Date: September 18, 2020
• Case Number: F-2017-01987
• Publication Date: May 1, 1978

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ZiL AND THE NUCLEAR QUESTION
Central Intelligence Agency
National Foreign Assessment Center
May 1978
Key Judgments
Progress on Brazil's ambitious nuclear energy develop-
ment program has been slower than expected. A major reason
is that Brazil's nuclear accord with West Germany--central
to Brazil's overall plans--has encountered problems.
Other considerations that could alter Brazilian ap-
proach on nuclear matters include:
The costs of the curtent nuclear, program are
sharply higher than originally anticipated.
President Geisel, who is heavily committed to
the program, will leave office in less than a
year, and his successor is not identified with
the program in its present form.
A warming trend in relations with the United
States, evident since President Carter's visit
to Brazil in March.
MEI Ma
-- Growing disillusionment with the West Germans.
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BRAZIL AND THE NUCLEAR QUESTION
Slow Progress to Date
Implementation of the 1975 Brazil - West German nuclear
accord--the centerpiece of Brazil's ambitious nuclear de-
velopment program--has proceeded slowly. The agreement
calls for the joint development of power reactors and re-
actor components. Moreover, there is to be a jointly operated
jet nozzle plant for uranium enrichment, a fuel reprocess-
ing plant, and a uranium exploitation project. Thus far,
only the reactor component plant and two of the eight planned
reactors are under construction. Brazil's first power re-
actor, Angra I, being built.by Westinghouse and a Brazilian
,firm at the Angra dos Reis nuclear center near Rio de Janeiro,
will not be in operation by; the target date of early 1979.*
-Brazil' has encountered difficulty in securing fuel for
its program. URENCO, the European consortium from which
the Brazilians hope to buy enriched uranium to fuel Angra II
and III, cannot supply the needed material until the Dutch,
who are consortium members, give their approval. In the
meantime there have been unconfirmed press reports of French,
British, and Soviet offers to fill the gap, by providing
fuel enrichment services: 'ifthe Brazilians purchase natural
uranium elsewhere. The West Germans and the British have
said they will provide fuel for Brazil if the Dutch do not
approve the URENCO deal.
Factors Influencing Brazil's Nuclear Views
Brazilian thinking on nuclear matters is conditioned
by three broad categories of factors. Relations with the
United States, long the most influential foreign influence
on Brazil, and with West Germany, Brazil's partner in an
ambitious nuclear development venture, are major determinants.
*US-Brazilian nuclear cooperation began in the late 19505 as part of
the Atoms for Peace program. Since then, the US has supplied Brazil
with three research reactors, and there has been a steady exchange of
technical information. The Angra I reactor from Westinghouse will be
followed by nuclear plants to be developed as part of the accord with
West Germany.
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Secondly, prospective political developments in Brazil--the
scheduled change of adMiniStiations and the possibility of
a greater civilian role in national life--have implications
,for the way in which Brazilian nuclear policies are made.
Finally, economic considerations--notably the immense cost--
loom large in Brazil's analysis of its nuclear plans.
Relations with the US
Brazil's relations with the US have improved in recent
weeks. In large part this is the result of the visit by
President Carter, who took the edge off the Brazilian anxi-
ety by avoiding a confrontation over the nuclear and human
rights issues and by taking adcount of Brazilian sensitivi-
ties. Brasilia's view of the seriousness of policy differ-
ences with Washington has in no way changed, but the Brazil-
ians do seem disposed--for the� moment at least--to deal with
the US in a -more'constructiveless emotional way.
There are indications that the Brazilians are now seek-
ing to speed up the improVement of relations with the US.
For example, top Brazilian officers are said to favor pro-
posing a new "military accord" with the US, possibly a
modest version of the longstanding military agreement the
Brazilians repudiated last year in anger over US human
rights criticisms. A source of the US defense attache has
said the chances are "excellent" that President Geisel will
agree to make such a proposal to the US and noted that
Brazil's leaders now seem willing to tolerate the US human
rights reporting,requiremeht,-provided the information is
not made public. The US Embassy reports that the Brazil-
ians have lately been more approachable in a number of diplo-
matic areas, citing in particular, Brazilian enthusiasm
for the idea of joint consultations on UN matters.
President Carter's tact in dealing with sensitive
issues has eased the way for the Brazilian leadership to
take steps toward a rapprochement with the US. But it is
really basic Brazilian interests that dictate the effort
to put relations back on a more solid footing. The Brazil-
ians are still heavily dependent on the US, whatever their
pretensions to developed-nation status. They realize full
well that they need US markets and capital and, just as im-
portant, US good will to ensure favorable treatment by in-
ternational financial institutions.
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Ironically, President Geisel's trip to West Germany
early in the year may also have helped to drive home the
point that Brazil still needs the US. Contrary to Brazil-
ian hopes, the Germans played down the political signifi-
cance of the visit and blVntly told Geisel that Brasilia's
then-tense relations with Washington served neither German
nor Brazilian interests. Geisel's effort to use the trip
to dramatize the emergence of West Germany as a major alter-
native source of political--as well as economic--backing
was, therefore, less than successful.
Dealing with West Germany
There are signs of Brazilian unhappiness over certain
aspects of their dealings with the Germans, and the seeds
of serious discord are clearly present. For example, since
1975 the Brazilians had assumed that they and the Germans
would jointly construct a reprocessing facility capable of
handling significant amounts of spent fuel. Late last year,
however, the Germans informed Brazil that they could help
construct a plant that had only a fraction of the capacity
the Brazilians wanted.
Under the terms of an agreement with the other European
nuclear nations, the Germans cannot transfer to third parties
either the technology or an actual plant to reprocess more
than a token amount of spent fuel without the approval of
France and the UK.
The Brazilians from the outset may have simply mis-
understood the nature of these constraints on the West
Germans, or the West Germans may have deliberately misled
the Brazilians in hopes of clinching the lucrative deal.
There are other problems as well. Brazilian nuclear
industry officials have expressed annoyance, for example,
at the somewhat overbearing German tendency to assume that
in any joint venture, Brazilian procedures must always give
way to German ones. The Brazilians were particularly up-
set when the Germans took for granted that the reactors to
be built in Brazil with German help would be licensed by
Germany and not by Brazil. The Brazilians have also been
unhappy with German suppliers of needed hardware who, be-
cause they have a virtual monopoly, allegedly charge ex-
orbitant prices.
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Brazilian technicians studying in West Germany re-
port(Aly asserted that the training they were being given
was not commensurate with the type of advanced technology
the Germans were to provide to Brazil. Moreover, late last
.year officials of Brazil's Nuclear Energy Commission
, traveled to West Germany to .complain about alleged delays
in the .transfer to Brazil of certain kinds of technology.
Senior officials of Brazil's leading nuclear research
institute at Sao Paulo recently criticized the thorium
cooperation agreement signed by Geisel during his trip to
West Gerwany. Officials of Brazil's Atomic Energy Institute
(IEA) were disappointed that the president of West Germany's
Juelich nuclear research institute, which is charged with
implementing the thorium agreement with Brazil, spent only
one day with them during his recent visit. There were no
discussions of joint projects and the West German was non-
committal on new Brazilian proposals for cooperation. The
Brazilian nuclear research officials now view the thorium
agreement with Germany as a propaganda exercise and lean
more toward the US thorium offer of last fall. At that
time the US proposed joint development of the thorium fuel
cycle, but the Brazilians, perhaps because they hoped to
,make progress with the West Germans, declined.
It is pOssible at leisirto question whether all the
Brazilian complaints are well founded or even entirely
genuine. For instance, what Brazilians term German foot-
dragging in providing advanced technology could in fact be
the result of the inability of Brazilian scientists to ab-
sorb this technology readily. Possibly, too, the Brazilians
exaggerate the magnitude of technology transfer that was
agreed to in the original accord. Indeed, some Brazilian
officials reportedly privately acknowledge that during the
negotiations of the accord, the Brazilian side did not in
fact obtain West German agreement to the transfer of cer-
tain particularly important know-how, notably the Becker
jet nozzle process used in the German uranium enrichment
technique the Brazilians will be using.
If these officials are correct, Brazil will, in the
long run, be highly dependent on West Germany for enrich-
ment. This is precisely the opposite of what the German
deal was supposed to accomplish. Indeed, the Brazilian
officials who most favored the accord "sold" it to their
countrymen with the contention that only the Germans were
willing to give Brazil enough technology to achieve nuclear
independence.
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In any event the claims of German reluctance to provide
technology, justified or not, coupled with other sources
of annoyance, could provide the impetus for Brazil even-
tually to scale down or back away from the agreement. For
the moment, however, such a move seems remote.
The Political Scene at Home
Within less than a year General Joao Baptista Figueiredo,
designated successor to President Geisel, will take over
as chief executive. The President-designate has carefully
avoided becoming identified with the current nuclear pro-
gram, and there are indications he may favor changes in it.
Figueiredo's well-publicized expressions of interest in
Brazil's vast hydroelectric potential, for example, have
prompted widespread speculation that he will deemphasize
nuclear power. Perhaps more significantly, Figueiredo ap-
parently takes counsel on nuclear matters from two Brazil-
ian scientists who are well-known critics of current nuclear
policies--Jose Goldemberg, one of Brazil's most eminent
physicists, and Jose Israel Vargas, scientific adviser to
the man who will become vice president. Goldemberg has
reportedly said that Vargas will occupy a top nuclear
policy position in the new government and believes that
his own influence will increase substantially once
Figueiredo takes over.
Over the next few years, moreover, there is the pros-
pect of some liberalization of the political system, to
allow for more civilian participation in decisionmaking.
President Geisel has promised to commit the military regime
to the process of "opening up" by the end of his term.
While liberalization is by no means assured, many Brazil-
ians in and out of the military take the possibility seriously.
Reform of the political system would almost certainly
affect the way in which nuclear policy--among others--is
made. Liberalization could subject the nuclear program
to an unprecedented degree of public scrutiny. The Brazil-
ian National War College reportedly has already urged the
government to publicize more of the details of the nuclear
program in order to obtain greater popular backing for it.
There is nothing to suggest that the Brazilian public would
want to scrap the nuclear program; indeed, the general no-
tion acquiring a nuclear capability fits well with Brazil's
sense of national pride.
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Nonetheless, if civilians are given a greater voice,
the process of accommodating them will necessarily compli-
cate matters for the military officers, who, until very
recently, have not had to concern themselves very much with
public opinion. , There are many military men who would re-
sist change and the risk that civilians will find fault
with important aspects of the program.
Certainly the public's awareness of and interest in
the status of Brazil's nuclear program has been heightened
by recent, extensive press coverage of last fall's rash of
fires at the Angra dos Reis nuclear center. Ironically,
it was the regime's lessened press censorship that made
possible the massive coverage of the story, with the con-
sequent revelations of shoddy security and debilitating
bureaucratic rivalries. ,The government has publicly ac-
knowledged many of the charges made in the press. while
this might lead to public skepticism about the wisdom of
the nuclear program as it is now being implemented and
about the competence of those who administer it, thus far
there is no firm indication that the revelations have led
to any widespread doubts.
If liberalization becomes a reality, it could be ac-
companied by a change in some policy priorities. The re-
gime's single-minded concentration on economic development
could give way to greater emphasis on socially oriented
programs. An important complaint by civilians over the
years has been that the regime has done much to push in-
dustrialization but very little to improve social services
or to reduce gaping income disparities. Any significant
reordering of priorities would require cutting back some-
where, and there are those who would argue that the nuclear
program, which involves massive expenditures abroad, is
one area to be trimmed.
Economic Factors
Economic factors may prove the most significant. The
latest Brazilian estimate of the cost of the entire nuclear
program is more than $15 billion, roughly three times the
cost estimated in 1975 when the plans were formulated.
Earlier estimates may have been kept deliberately low in
order to promote the program, particularly the costly ac-
cord with West Germany. The completion of a full nuclear
cycle and the rapid development of a nuclear equipment in-
dustry to support the program will probably add another
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$5 billion to the cost. Roughly $16 billion of the total
would be in foreign exchange expenditures, at a time when
Brazil has formidable balance of payments constraints. In
addition, the state atomic power energy agency, Nuclebras,
has serious cash flow problems, and there are manpower
shortages because of the government's failure to pay com-
petitive wages to skilled workers.
Brazil has alternative sources of energy--primarily
hydroelectric--and they are more than adequate to meet
electric power requirements in the 1990s and beyond. In-
deed, the demand for electricity is not growing as fast
as was earlier anticipated.- The Ministry of Mines and
Energy estimates the nation's hydroelectric potential at
200,000 megawatts, although most officials still use earlier
projections of 150,000 MW. .From the standpoint of cost,
development of hydroelectric potential is substantially more
attractive than the use of nuclear energy.
Available information suggests that development of
hydroelectric potential probably will not reach the cost
levels of nuclear power until more than 60 percent of the
nation's potential is developed.
Current Prosnects
Significant alteration of the current nuclear program
is certainly not to be expected--if at all--until well
after the change of administrations next March. Geisel is
too closely identified with the program as it stands. More-
over, his administration is preoccupied with the succession
process and with handling an increasingly complicated do-
mestic political situation.
Reconciliation with the United States seems to be a
major concern of the Brazilians right now. Figueiredo seems
especially interested in establishing good lines of communi-
cation to Washington and reportedly feels a good start was
made during President Carter's visit. Given this changed
atmosphere, contacts with Brazilian officials are likely
to be quite cordial and conducive to better relations.
The thaw in relations does not mean, however, that
the Brazilians are no longer wary of US motives or possible
pressure. A tremendous amount of Brazilian prestige--not
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to mention capital--is tied up in the nuclear endeavor,
which many deem vital to the country's future. It would
take relatively little outside pressure to push Brazil back
to a stridently nationalist defense of its ambitious nuclear
program.
Nonetheless, the Brazilians have a number of important
reasons for reevaluating their nuclear program, and it
seems reasonable to conclude that Figueiredo and his ad-
visers will conduct a serious review of various options.
It is entirely possible that the Brazilians will eventually
conclude that their current plan is overly ambitious, given
the country's needs and its capabilities. If such a critical
analysis is indeed under way, further US blandishments could
retard its progress, since the Brazilians would then resist
making changes, if only to avoid giving the impression of
bowing to outside pressure.
This memorandum was prepared in the Office of Regional and Political
Analysis and the Office of Scientific Intelligence. Questions and
comments may be addressed to
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