South Africa at a crossroads

South Africa's difficult choice [View in browser]( [Bloomberg]( Welcome to Balance of Power, bringing you the latest in global politics. If you haven’t yet, sign up [here](. South Africa’s ruling party has a stark choice to make. Its [dire performance]( in the May 29 election means it will need to find allies among anti-free market populists, or a party that’s perceived as being associated with White privilege. It could also try to govern as a minority. What happens next will come down to intense horse-trading, primarily within the African National Congress itself, before an arrangement can be concluded. The business community and President Cyril Ramaphosa’s [allies favor a tie-up]( with the centrist Democratic Alliance that could help bolster the rand and the nation’s bonds. The DA says Ramaphosa can remain as president. Yet for many Black South Africans who swept the ANC to power [at the end of apartheid]( three decades ago, a linkup with the predominantly White-led DA would be inconceivable. Times, though, have changed. The election showed that faced with rampant poverty, mass unemployment, power cuts and endemic crime and corruption, South Africans have run out of patience with the ANC. DA leader John Steenhuisen has softened his party’s rhetoric to woo the ANC and [said in an interview]( that his group — whose predecessor opposed apartheid — increased its share of the Black vote in the election, despite the resignation of some of its high-profile Black leaders. WATCH: Steenhuisen says he’s willing to help the ANC form a government. Source: Bloomberg Others in the ANC favor a coalition with the six-month-old uMkhonto weSizwe Party led by former President Jacob Zuma, and the Economic Freedom Fighters — both of which represent factions that split from the ruling party. Those parties’ call for the nationalization of banks and mines is anathema to the ANC. Besides, the graft-tainted Zuma is a bitter enemy of Ramaphosa and demands that the president be replaced. Thirty years on from the end of White-minority rule, South Africa is in uncharted waters with no clear way ahead. —[MoniqueVanek]( ANC supporters at FNB Stadium in Johannesburg on May 25. Photographer: Leon Sadiki/Bloomberg Global Must Reads The day after India’s official election results showed Narendra Modi’s party lost its majority in parliament, the prime minister is gearing up for coalition talks to form a new government. His Bharatiya Janata Party needs to secure the support of two regional, although [notoriously unreliable](, allies to stay in office for a third term. Israel and Hamas agree on one thing: They won’t accept US President Joe Biden’s latest effort to [end their war in Gaza]( until their separate conditions are met. Prime Minister Benjamin Netanyahu is demanding that Hamas’s political and military operations be destroyed, while the Palestinian militant group says Israel must commit to a permanent cease-fire and full withdrawal from the enclave. Palestinians at the al-Bureij refugee camp in central Gaza on Sunday. Photographer: Eyad Baba/AFP/Getty Images Rishi Sunak and UK opposition leader Keir Starmer clashed in their first UK election debate, but neither [delivered a knockout blow]( in heated TV exchanges. While a snap YouGov poll gave Sunak points for being “prime ministerial” and coming out on top on tax and immigration, Starmer’s lead in key areas including the National Health Service, education and “likability” showed why surveys put his Labour Party on course for power in the July 4 election. A flagship €1.5 billion ($1.6 billion) gigafactory being built by French startup Verkor is part of President Emmanuel Macron’s plan to transform an area devastated by industrial decline into Europe’s largest hub for electric-vehicle batteries. Yet efforts to showcase his green reindustrialization push are [failing to convince voters]( in a stronghold for the far-right National Rally party of Marine Le Pen. Uganda has spent hundreds of millions of dollars on biometric tools that document a person’s unique physical characteristics, such as their face, fingerprints and irises, for a comprehensive national identification system. While the system is central to many of the state’s everyday functions, it has also become a [powerful mechanism for surveilling]( politicians, journalists, human-rights advocates and ordinary citizens. Chancellor Olaf Scholz said his government would only support fellow German Ursula von der Leyen for a second term as European Commission president if her center-right European People’s Party can build a stable majority in the next European Parliament [without the support of the far right](. Mexican opposition leader Xochitl Galvez said she will ask the electoral authority [to recount 80% of the votes]( from Sunday’s election, in which she lost the presidency to ruling party candidate Claudia Sheinbaum by a wide margin. Georgia’s ruling party put forward draft legislation targeting [LGBTQ rights](, adding to a crackdown on civil society that has drawn strong condemnation from the US and the European Union. On this episode of Voternomics, host Stephanie Flanders speaks with a key architect of the global sanctions regime imposed on Russia. Suorce: Bloomberg Washington Dispatch Although differences over ending the war in Gaza persist, the military alliance between the US and Israel remains robust. Under [an agreement]( completed yesterday, Israel will start receiving a fresh batch of F-35 fighter jets from the US in 2028. Israel will get the warplanes, made by Lockheed Martin, at a rate of three to five per year under the terms of the $3 billion deal, which was first announced last year. The acquisition will expand Israel’s fleet of the stealth aircraft to 75. “At a time when some of our adversaries aim to undermine our ties with our greatest ally, we only further strengthen our alliance,” Israeli Defense Minister Yoav Gallant said in a statement. One person to watch today: Biden arrived in France, where he is to take part in ceremonies commemorating the 80th anniversary of D-Day. [Sign up for the Washington Edition newsletter]( for more from the US capital and watch Balance of Power at 1 and 5 p.m. ET weekdays on Bloomberg Television. Chart of the Day Source: Oxford Economics Africa & Malaria No More UK The World Health Organization aims to reduce both the incidence of malaria and mortality from the disease by 90% in the next six years. If it does, Nigeria’s gross domestic product alone over the period [would be increased]( by a total of $34 billion, researchers at Oxford Economics Africa wrote in a report. Africa would account for 88% of the benefit across the 85 nations afflicted by the disease. And Finally Vladimir Putin turns his native St. Petersburg into the heart of power for his flagship economic event that begins today. Increasingly, the annual gathering in Russia’s former imperial capital is also a [generational showcase]( for the children of the Kremlin elite. The president’s daughters are among speakers at the St. Petersburg International Economic Forum, along with the offspring of some of his closest allies. It’s part of a second-generation “rise of the princes,” according to political scientist Yevgeny Minchenko. Putin’s daughter Katerina Tikhonova speaks via video link during a panel session at SPIEF in 2021. Photographer: Andrey Rudakov/Bloomberg More from Bloomberg - Check out our [Bloomberg Investigates]( film series about untold stories and unraveled mysteries - [Bloomberg Opinion]( for a roundup of our most vital opinions on business, politics, economics, tech and more - [Next Africa](, a twice-weekly newsletter on where the continent stands now — and where it’s headed - [Economics Daily]( for what the changing landscape means for policy makers, investors and you - [Green Daily]( for the latest in climate news, zero-emission tech and green finance - Explore more newsletters at [Bloomberg.com](. 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