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Factal Forecast: Chile elects a constitutional council, Russia celebrates ‘Victory Day’ and Biden holds debt ceiling talks

King Charles III in military regalia is flanked by others in formal military uniforms

Welcome to Factal Forecast, a look at the week’s biggest stories from the editors at Factal.

We publish our forward-looking note each Thursday to help you get a jump-start on the week ahead.

Protests erupted in Paraguay this week after a general election ended with allegations of fraud. In this week’s Factal Forecast podcast, Senior Editor Jimmy Lovaas and Editor Jaime Calle Moreno discuss the background to the election and the heavy-handed police response to the rare demonstrations. 

Listen now or download on your favorite platform. 

Week of May 5-11
A Look Ahead

May 6 – King Charles’ coronation

The coronation service of Charles III and Camilla gets underway Saturday morning in what will be the U.K.’s first such ceremony since 1953.

What’s happened so far 
Charles became king in Sept. 2022 when Queen Elizabeth II died at age 96. In October, Buckingham Palace announced that the coronation would be held seven months later after sufficient mourning time. More than 2,000 people will be in attendance at Westminster Abbey, including dignitaries from 203 countries. A number of foreign monarchs and political leaders will be there. President Joe Biden will not attend, as no president has ever attended a coronation, but the first lady will.

The impact 
With so many high-profile guests in one place at one time, security will be high throughout London. The security operation alone is said to cost more than $175 million. Authorities will be monitoring anything from possible terror attacks to disruptive protests. With so much live coverage, anything that goes wrong would be seen immediately around the world and potentially have a global impact.

May 7 – Chile elects representatives to write new constitution  

Chileans will vote Sunday to choose representatives of a new body in charge of drafting a new constitutional text.

What’s happened so far 
The Constitutional Council elections will take place nationwide with citizens over the age of 18 legally bound to vote on a candidate to represent their district. According to Chile’s laws, those who do not participate in elections without a justified cause will face fines. A total of 50 elected representatives will write a new constitution draft to be submitted to plebiscite in December after a majority of the electorate rejected the first version in a vote in September 2022. Once the constitutional draft is finished and presented, the Constitutional Council will be dissolved

The impact 
The project to renew the constitution was the political response to the “Estallido Social” protests (members’ link) in 2019, when Chileans took to the streets to reject systemic inequalities perpetuated by the country’s carta magna, which dates back to 1980 and was heavily influenced by the martial values of Augusto Pinochet’s dictatorship. The second attempt to rewrite the text takes place amid an economic crisis, a growing worry among citizens over insecurity and generalized disenchantment among the population after the highly polarized debate that surrounded the first constituent process. The results of Sunday’s vote could hint at polling trends for the next general election. 

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May 7 – Japanese prime minister visits South Korea

Japanese Prime Minister Fumio Kishida is expected to make a two-day trip to South Korea starting Sunday, with plans to meet with President Yoon Suk-yeol ahead of the G7 summit in Hiroshima later this month.

What’s happened so far 
The trip comes on the heels of a commitment by both leaders earlier this year to resume mutual visits on a regular basis for the first time in more than a decade. The renewed push to improve Tokyo-Seoul ties follows years of deteriorating relations surrounding issues linked to Japan’s colonial rule of the Korean Peninsula around World War II, including a 2018 decision by South Korea’s Supreme Court ordering Japanese companies to compensate Korean workers for forced labor during that period.

The impact 
Kishida said he hoped the working visit would “give momentum to ‘shuttle diplomacy‘” between the countries. The leaders are expected to discuss their response to North Korea’s nuclear and missile development as well as renewed cooperation efforts in light of China’s growing influence. 

May 9 – Russia Victory Day  

Russia will hold celebrations Tuesday to mark the anniversary of the Soviet Union’s victory over Nazi Germany in World War II.

What’s happened so far 
Russia’s Victory Day is typically marked by military parades and outward displays of nationalism with the main parade procession going through Moscow’s Red Square. This year’s parade in Moscow will take place despite Russia’s multiplying failures in Ukraine, albeit under unprecedented security conditions. Parades in some border regions have been outright canceled, including in Belgorod and Kursk, due to consistent cross-border Ukrainian shelling. Sevastopol in Crimea, the site of Russia’s key naval base for Ukraine operations, has also canceled its parade amid a string of drone attacks targeting the occupied peninsula. 

The impact 
Russia’s scaled back Victory Day parades highlight the extent to which Ukraine’s reach inside Russia, while a small fraction of that of Russia’s within Ukraine, has multiplied since last May’s victory parade. Since then, Kyiv has demonstrated this reach multiple times, including significant drone attacks on Russia’s Engels strategic bomber air base. Outside of security fears, observers have also speculated that Moscow’s reluctance to illuminate its massive equipment and manpower losses in Ukraine is a reason for the scaled back parades.  

May 9 – Biden debt ceiling talks

U.S. President Joe Biden has called for a meeting with congressional leaders at the White House on Tuesday to discuss the looming debt ceiling crisis.  

What’s happened so far 
The meeting comes a week after Treasury Secretary Janet Yellen warned that the U.S. could default on its debt as early as June 1. Biden also has recently renewed his demand for a “clean” debt ceiling increase in the wake of House Republicans passing a bill that would raise the debt ceiling and slash trillions of dollars in government spending. Senate Minority Leader Mitch McConnell, R-Ky., and House Speaker Kevin McCarthy, R-Calif., are expected to attend Tuesday’s meeting along with Senate Majority Leader Chuck Schumer, D-N.Y., and House Minority Leader Hakeem Jeffries, D-N.Y.  

The impact 
While it would appear lawmakers and the administration have several weeks to work out an agreement, Biden and McCarthy are facing a bit of a time crunch considering neither are expected to be in Washington simultaneously for much of May. Adding to the pressure is the fact that defaulting on the debt would have far-reaching consequences, from delaying Social Security payments to impacting the stock market.

May 10 – 42nd ASEAN summit  

All regional leaders in the Association of Southeast Asian Nations will meet for a two-day summit in East Nusa Tenggara, Indonesia, starting Wednesday.

What’s happened so far 
The biannual meeting is the first of two under Indonesia’s chairmanship this year and is expected to focus on issues such as protection of migrant workers and regional health architecture. Officials from Timor Leste will also attend under an observer status. Nine separate meetings will take place during the two days, with Indonesian President Joko Widodo chairing seven of them.

The impact 
Myanmar’s opposition officials have called ASEAN members to formally block the army from all its meetings and to reduce engagement with the army. The organization is scheduled to discuss Myanmar during the summit, but it is unclear if the five-point consensus previously agreed upon, which included engagement with the army in an effort to resolve the conflict, will be revised. A second meeting will take place in September in Jakarta where external partners will also attend to discuss strengthening ASEAN cooperation with international partners.

May 11 – US to end public health emergency

The United States is ending its public health emergency related to the coronavirus pandemic after more than three years on Thursday, along with a slew of related policies and regulations.  

What’s happened so far 
On April 10, President Joe Biden signed a House bill immediately ending the national emergency over the coronavirus pandemic originally declared in March 2020. The United States has seen a steady decline in the total number of recorded coronavirus-related cases and deaths in recent weeks, but a more-infectious Omicron subvariant dubbed “Arcturus” is beginning to make up a greater percentage of cases nationwide. 

The impact 
The United States will also lift vaccine requirements for federal employees, international air travelers and certain noncitizens at the land border. Anticipating a possible increase in migration when coronavirus border restrictions end, the Biden administration will be sending active-duty troops to the southern border and asylum officers to refugee centers in Guatemala and Colombia. The CDC plans to stop reporting color-coded coronavirus community levels to follow infections, and will transition to tracking hospitalizations in specified areas, according to a CNN report.

What Else Matters

Dozens of police officers in safety vests block an intersection preventing a crowd waving flags from advancing.
Paraguayan police form a line to block protesters gathered in Asunción on May 1, as election demonstrations erupt across the country (Photo: National Police of the Paraguay / Facebook)

First Republic Bank takeover 

JPMorgan Chase agreed on May 1 to buy the California-based First Republic Bank after the lender was shut down by state regulators. The second-largest bank to fail in U.S. history, First Republic was heavily impacted by federal interest rate rises in 2022 and posted an annual loss of $4.8 billion in December. JPMorgan Chase acquired the vast majority of First Republic’s assets, including $92 billion in deposits, in a deal designed to limit costs to regulators, JPMorgan Chase CEO Jamie Dimon said.

Watch for: First Republic is the third U.S. bank to be seized by regulators since March and investors are concerned about the symbolic and practical implications for the country’s economy. In the wake of the collapse, the chair of the U.S. Senate banking committee called for further regulation on large financial institutions, but asset managers say this will reduce the amount of liquidity in the market when conditions are already tight due to high inflation. In a call Monday, Dimon sought to reassure investors that the U.S. financial sector is “extraordinarily sound” and the recent bank collapses are not a sign of imminent economic turmoil, as was the case in 2008. 

Paraguay election protests 

Following Sunday’s general elections in Paraguay, where the ruling right-wing Colorado Party and its candidate Santiago Peña won with 42.7 percent of the vote, protests erupted in several provinces of the country. This was after Paraguayo “Payo” Cubas, presidential candidate for the National Crusade Party, accused the victors of electoral fraud, claiming the election had been stolen after finishing third with 22 percent of the vote. Road blockades, attacks against police officers and arson attacks were witnessed across four different regions including the capital Asunción, causing severe disruption to public transport. More than 100 people have been arrested since Monday night, and at least 10 police officers were injured.

Watch for: Protests in Paraguay are already a rare occasion, but it is difficult to tell how far these particular demonstrations over alleged electoral fraud will go. Monday saw widespread unrest, and police have already been given the go ahead to “restore order.” If the protests continue, police may use a more congregated and direct approach that will amount to more injuries and unrest. Hours before the polls opened, Colorado Party members attempted to move voting booths to closed rooms, but no evidence has been presented that electoral fraud took place. If that is proven to be the case, the protests will undoubtedly continue and the situation will deteriorate. 

Extended Outlook

What’s on our radar in the coming weeks…

May 5-12 

May 5

  • Buddha Purnima Buddhist Festival

May 6

  • King Charles’ coronation
  • Taliban’s foreign minister visits Pakistan

May 7 

  • Early voting begins in Thailand general elections
  • Election of representatives to write new constitution draft in Chile
  • Japan’s Prime Minister Kishida visits South Korea
  • Election of representatives to write new constitution draft in Chile – Irene

May 8

  • Japan ends coronavirus border control
  • Kyrgyzstan president visits Russia

May 9 

  • Russia Victory Day
  • President Biden calls meeting of congressional leaders on debt ceiling
  • German Chancellor Olaf Scholz addresses the European Parliament

May 10

  • 42nd ASEAN Summit

May 11

  • President Biden ends COVID-19 emergency declaration
  • Africa Debate conference in London

May 13-19 

May 14

  • EU Indo-Pacific Ministerial Forum in Stockholm
  • Mauritanian National Assembly election

May 14

  • Thailand general elections
  • Turkey general elections

May 16

  • Council of Europe summit
  • Peace negotiations between Colombian government and FARC
  • Strike of judges and attorneys in Spain

May 17

  • Philippine airspace to shutdown to replace UPS system

May 19

  • Summit of Arab leaders
  • Japan to host summit of G7 leaders

May 20-26 

May 21

  • Timor-Leste elections
  • Greece elections
  • WHO holds World Health Assembly

May 24

  • President Biden visits Sydney for Quad leaders meeting

May 27-June 2 

May 29

  • Alberta provincial general election
  • Korea-Pacific Islands Summit

May 30

  • Miami Beach International Fashion Week begins

May 31

  • Norway hosts meeting of NATO foreign ministers
  • Latvia’s parliament elects president

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