Thirst for change

Follow Us Get the newsletter Of all the regions of the world to have felt the political impact of the pandemic, Latin America stands out as among the most deeply affected. Just how far its politics have been influenced by Covid-19's cross-currents will become clear after two key elections this weekend. Peru is experiencing a tight race for the presidency between two polar extremes. And in Mexico, the ambitious — and controversial — transformation proposed by President Andres Manuel Lopez Obrador faces its biggest test yet in midterm voting where control of congress is at stake. The votes take place against a backdrop of political upheaval across the region, from Chile's attempt to rewrite its constitution to deadly street protests in Colombia. Brazil's political landscape has further fractured over President Jair Bolsonaro's handling of the pandemic. Demonstrators clash with police during a protest in Bogota on May 28. Photographer: Nathalia Angarita/Bloomberg The combination of one of the world's deadliest waves of Covid-19 with years-long economic malaise has exposed and exacerbated long-standing inequalities and frustrations, fanning anti-establishment sentiment among Latin Americans. One outcome is the emergence of a rural school teacher and union organizer, Pedro Castillo, as a contender in Peru, a country that for decades has enjoyed economic growth that pulled millions out of poverty but where general prosperity proved elusive. As Maria Cervantes and Jim Wyss write, Castillo faces Keiko Fujimori, the daughter of a jailed former president, a contest that encapsulates the growing demands for change across Latin America that are running up against the entrenched elite. That's a turbulent mix. Investors should be watching carefully as stocks, bonds and currencies react strongly to the region's swinging political moods. — Juan Pablo Spinetto Castillo arrives at a campaign rally in Lima on May 27. Photographer: Miguel Yovera/Bloomberg Check out all our biggest stories on the Bloomberg Politics web page here and tell us how we're doing or what we're missing at balancepower@bloomberg.net. Global Headlines Nuclear urgency | Iran produced a record volume of highly enriched uranium that could quickly be turned into fuel for an atomic weapon, according to International Atomic Energy Agency inspectors. As Jonathan Tirone reports, the assessment cast a pall over months of hard-fought diplomacy aimed at restoring the 2015 nuclear accord that has broad implications for Middle Eastern security, global business and oil markets. Spying spat | French President Emmanuel Macron urged the U.S. to clarify media reports that American intelligence monitored German Chancellor Angela Merkel and other European politicians with the help of Denmark. The aim isn't just to find out what activities happened in the past, but to also determine "which practices are still going on," he said, a position Merkel agreed with. Merkel is sending a high-ranking negotiating team to Washington this week to discuss the controversial Nord Stream 2 pipeline project, Funke media group reported. Covid-19 jolt | The pandemic has sparked a blitz of public spending and upended the traditional approach of managing inflation and economic growth by controlling how much it costs to borrow money. As Matthew Boesler explains, lessons have been learned about how to get out of a downturn — now it's time to figure out how to manage the boom. Indonesia may be next in Asia to see its Covid containment suffer a setback as the Eid al-Fitr celebrations in early May lead to a spike in new infections. Authorities also have identified nearly 60 cases that are linked to variants of concern and are studying whether this will compromise the country's goal to reach herd immunity by the end of next March. Skewed support | The biggest beneficiaries of Prime Minister Justin Trudeau's pandemic aid have been Canada's highest-earning families, Erik Hertzberg reports. That may fuel concern the assistance, among the world's most generous, was indiscriminate and ended up being hoarded in bank accounts. Meat targeted | The latest casualty of a cyberattack is the world's biggest meat supplier, JBS, posing a new threat to global food supply chains already rattled by the pandemic. Hackers now have the commodities industry in their crosshairs with the attack coming just three weeks after the operator of the biggest U.S. gasoline pipeline was targeted. What to Watch Former Finance Minister Yair Lapid may present a new government that aims to oust Benjamin Netanyahu, Israel's longest-serving premier, as soon as this afternoon. Prime Minister Pedro Sanchez said he is ready to consider pardons for jailed Catalan leaders who tried to break away from Spain, arguing it's necessary to move the country forward. Merkel is set to allow Germany's controversial lockdown law to lapse when it expires at the end of June, the latest sign that the pandemic is releasing its grip on Europe's largest economy. Foreign and defense ministers of NATO countries are meeting today as the 30-nation alliance seeks to discuss military spending and issues from Afghanistan to Ukraine and Belarus in preparation for its June 14 leaders' summit. South Korea's main conservative opposition party is looking to entice the country's former top prosecutor, Yoon Seok-youl, to be its leading candidate, a move that could make him a front-runner in the presidential election less than a year away. And finally ... A study of a small Brazilian town vaccinated with the Sinovac shot showed it can control Covid-19 outbreaks more effectively than expected from clinical testing, giving another boost to the Chinese-made inoculation that's relied on by dozens of developing countries. While neighboring cities were being hit hard by the pandemic, Serrana saw deaths fall by 95% and hospitalizations decrease by 86% after the mass vaccination drive. People gather at a park in Serrana on May 26. 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