Leftist tide ebbs

It’s been a rough week for Latin America’s leftist leaders.Pedro Castillo’s ouster as Peru’s president after a failed attempt to dissolve co [View in browser]( [Bloomberg]( It’s been a rough week for Latin America’s leftist leaders. Pedro Castillo’s ouster as Peru’s president after a failed attempt to dissolve congress to stave off impeachment — for which he could face 20 years in jail — undermines the left-wing movement not only in his country but potentially in the rest of the region as well. Key reading: - [Peru’s Castillo Risks 20-Year Sentence as Mexico Offers Asylum]( - [Peru’s Dina Boluarte Sworn in by Congress as New President]( - [Argentina’s Kirchner Given 6-Year Jail Term in Graft Case]( - [Mexico’s Lower House Passes Bill to Downsize Voting Agency]( In Argentina, Vice President Cristina Fernandez de Kirchner was sentenced to six years in prison and banned from political office for life after being found guilty of fraud, though she has immunity while she still holds her post. And in Mexico, President Andres Manuel Lopez Obrador is trying to ram through a bill that downsizes the nation’s electoral regulator that’s certain to be challenged in the courts. Castillo was the first leftist leader to emerge in Latin America as a result of anger at inequalities highlighted by the pandemic, winning the presidency in June 2021. That was followed by electoral victories by Gabriel Boric in Chile, Xiomara Castro in Honduras, Gustavo Petro in Colombia and Luiz Inacio Lula da Silva in Brazil in October. Some commentators dubbed it a new “pink tide” of progressive governments akin to Latin America’s swing to the left at the beginning of the century. Yet Castillo’s blunder leaves the movement on the back foot, with leaders in the region unable to articulate a common position about his actions. While Lula accepted that Peru’s events followed the constitutional order and wished incoming President Dina Boluarte well, AMLO refused to recognize the new government and offered Castillo asylum at the Mexican embassy in Lima. The divergence on a relatively simple topic makes consensus on more complex issues, from trade to migration and economic development, even harder to reach despite the ideological affinities. As a result, Latin America’s “pink tide” seems to be already fading. — [Juan Pablo Spinetto]( Protesters burn a t-shirt bearing Castillo’s image in Lima on Wednesday. Photographer: Ernesto Benavides/AFP/Getty Images Click [here]( for this week’s most compelling political images. And if you’re enjoying this newsletter, sign up [here]( for Balance of Power. Global Headlines Tailored effect | The [impact]( of the European Union’s Russia sanctions on the bloc’s own economy has so far been largely contained to a few specific sectors, an assessment by the EU’s executive arm shows. The measures caused supply issues in areas like wood and precious metals, but wider disruptions have mostly been due to global market trends, Russia’s war in Ukraine and Moscow’s retaliatory steps, [Alberto Nardelli]( reports. - Turkey’s President Recep Tayyip Erdogan will use talks with the leaders of Turkmenistan and Azerbaijan next week to [revive]( an idea of bringing Turkmen natural gas via his country to Europe. Daunting task | China’s abrupt decision to abandon its strict Covid Zero policy could [unleash]( surging infections. While the world’s most populous nation is rapidly abandoning mass testing, lockdowns and centralized quarantines, it’s spent little time putting in place the mitigation measures needed to deal with the resulting explosion in cases. Growing friendship | Chinese President Xi Jinping’s visit to Saudi Arabia boosted relations between the world’s No. 2 economy and its top supplier of crude. Beijing’s expression of willingness to [expand oil]( trade with the kingdom and the two sides’ agreement to hold summits every two years contrast with fraying ties between Washington and Riyadh over oil policy. Best of Bloomberg Opinion - [China’s Covid Pivot Sounds Like the Real Thing: Daniel Moss]( - [Brittney Griner Is Home. Next Up Is Paul Whelan: Stephen Carter]( - [Sex Not the Only Issue With New Indonesia Law: Clara F. Marques]( Diplomatic impact | Of all the countries that have tried to mediate with Russia since it invaded Ukraine, the United Arab Emirates and its Middle East partners are the ones showing an [ability]( to get results. The UAE helped facilitate yesterday’s Russia-US [swap]( of WNBA star Brittney Griner and arms dealer Viktor Bout in Abu Dhabi. The first major Russia-Ukraine prisoner exchange was also brokered by the Gulf state, along with Saudi Arabia and Turkey. Explainers you can use - [What Trump’s Legal Perils Mean for Trump’s Candidacy]( - [Crash Course — A Glossary for the ‘Crypto Winter’]( - [The UK’s Massive Tree-Planting Campaign Isn’t Moving Fast Enough]( Mafia mining | Riding the boom in the global commodities market, the mining industry has been a rare bright spot in South Africa’s economy. But as [Felix Njini]( and [Antony Sguazzin]( write, that’s made firms like Anglo American, Glencore and Sibanye Stillwater targets of extortion from groups they say are [threatening violence]( if demands aren't met for as much as 30% of their lucrative procurement contracts, often with little to offer by way of skills and services. Bloomberg TV and Radio air Balance of Power with [David Westin]( on weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here](. News to Note - A standoff over sanctions and insurance that has caused a jam of oil tankers at the key Bosphorus shipping strait has escalated, [leaving millions]( of barrels of crude stuck. - The US is preparing [fresh]( sanctions on Russia and China for what it describes as human rights abuses by both countries, a source says. - The International Monetary Fund, World Bank and others [raised concerns]( about a worsening global economic outlook, while hopeful that China’s reopening will support growth. - Japan, the UK and Italy will work together to develop a next-generation [fighter jet]( to come into operation by 2035. - As Ethiopia’s two-year civil war in Tigray winds down following a peace deal, a fresh [conflict]( is flaring in the central Oromia region. Pop quiz (no cheating!) Which country is planning new controls on exports of chipmaking equipment to China, aligning it more closely with US curbs on Beijing? Send your answers to [balancepower@bloomberg.net](bbg://screens/MSG%20balancepower%40bloomberg.net) And finally ... Anger over the Dutch authorities’ plans to halve nitrogen emissions from agriculture by 2030 prompted a summer of fury with farmers setting hay bales ablaze and dumping manure on motorways. The crisis serves as a [cautionary tale]( for governments the world over as a year of record drought, floods and fires forces a closer look into the way we produce the most essential of goods: food. While it’s one of the biggest victims of more extreme weather, farming is also a major climate offender. Dutch farmers block the highway near Rijssen in June. Photographer: Vincent Jannink/AFP/Getty Images Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. 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