was all but out of dollars. Voters ejected the party because of biting inflation and chronic fuel shortages. But these problems have continued. A batch of adulterated fuel damaged more than 10,000 vehicles, infuriating their owners. An agrarian reform passed in April angered indigenous people, who saw it as a sop to agribusiness. Mr Paz repealed it, but the general workers’ union and peasant groups demanded his resignation anyway. The peasants set up the road blocks. Mr Paz has responded with a mix of negotiation and force. He has reached agreements with some factions, including the teachers and some miners, but the blockades have not budged. On May 16th Mr Paz sent riot police to clear the roads. As The Economist went to press more than 150 people had been arrested, but the barriers were still up. On May 20th Mr Paz offered a cabinet shuffle in a bid to end the crisis. Thousands of supporters of Evo Morales, a former president, arrived in La Paz on May 18th to join the protests. Mr Morales led the MAS to power through just this sort of street politics. He is hiding out in the coca-growing tropics, evading an arrest order for statutory rape. (Mr Morales says the allegations are politically motivated.) He and his new party, Evo Pueblo, want to exploit the moment. Even if Mr Paz can defuse these protests, there will be more. The IMF reckons the economy will contract by 3.3% this year, with inflation rising to more than 20%. Mr Paz’s relationship with the highland indigenous and peasant groups—whose votes were crucial to his election—has already broken down. Their blockades have toppled governments in the past. The economic adjustment has barely begun. External factors have not helped. After Mr Paz cut fuel subsidies, the war in Iran sent prices soaring. The fiscal deficit in the latest budget was still 9% of GDP. At the official exchange rate the currency remains overvalued. Reforms to encourage investment in natural resources have yet to materialise. “The government is moving, but very slowly, very timidly,” says Beatriz Muriel of INESAD, a think-tank in La Paz. The Americans are watching. “The United States stands squarely in support of Bolivia’s legitimate constitutional government,” Marco Rubio, the
secretary of state, said on May 20th. “We will not allow criminals and drug traffickers to overthrow democratically elected leaders in our hemisphere.” ■ Sign up to El Boletín, our subscriber-only newsletter on Latin America, to understand the forces shaping a fascinating and complex region. This article was downloaded by zlibrary from https://www.economist.com//the-americas/2026/05/21/months-after-electing-a- centrist-president-bolivia-boils-over
Why Brazil’s government is obsessed with vaccines It is spending heavily to revive the country’s medical-industrial complex May 21st 2026 IN RECENT MONTHS more than one million doctors and nurses in Brazil have been inoculated against dengue. The mosquito-borne disease is a perennial problem and vaccination normally relies upon expensive Japanese shots. But this year, for the first time, the jab is home-grown. Approved in November, Butantan-DV is the world’s first single-dose immunisation for dengue (one dose is easier than two, especially when vaccinating poor, rural people). It is also the first vaccine to be fully developed in Brazil. The Butantan Institute, a research outfit owned by the state of São Paulo, handled formulation, testing and manufacturing. On May 4th the institute’s production of a vaccine for chikungunya, another mosquito-borne disease,
was also approved. It is working on a jab for Zika, says Esper Kallás, Butantan’s boss. This is the kind of “medical sovereignty” that the left-wing president, Luiz Inácio Lula da Silva, wants. Lula, as he is commonly known, returned to power in 2023 after the covid-19 pandemic. That wave of disease exposed the weakness of the Brazilian pharmaceutical sector. The country’s share of active pharmaceutical ingredients (APIs) that were produced domestically was just 5% at the start of the pandemic—lower than in Bangladesh— according to data from Abiquifi, a Brazilian trade association. Tight global supply chains left Brazil short of syringes and anaesthetics, let alone vaccines. A Brazilian jab, ButanVac, was abandoned because of poor performance. More than 700,000 people died of covid in Brazil. This created political pressure for improvement. Lula took up the mantle. The pharmaceutical sector withered during his first two terms as president, from 2003 to 2010. After right-wing governments liberalised and reduced tariffs on the sector in the 1990s, it in effect gave up on research and development in favour of churning out generic drugs and doing final-stage “fill-and-finish” work for foreign brands. Lula was unable to reverse the decline. His efforts to create “state champions” struggled. Most firms were happy selling generics. A programme of loans for health-care firms created by BNDES, the country’s state-owned development bank, was undersubscribed. A 2009 technology-transfer programme made little headway. China and South Korea raced ahead in R&D; India increased its output of generics. Brazil languished in the middle, says Jorge Guimarães, a former boss of Embrapii, the agency for industrial innovation.
Butantan’s recent success is the result of a new, more vigorous approach. More money is one element. Since 2023 the health ministry’s budget has risen by 30%. In 2024 BNDES more than doubled the amount it lends to health-care firms (see chart). It is part of a broader industrial programme for the “health-economic-industrial complex” with a budget of around $11bn. The government makes loans and grants to Brazilian firms, as well as taking equity stakes. It aims to increase the locally produced share of medicines and medical equipment from 45% in 2024 to 70% in 2033. A factory being built near Rio de Janeiro will quadruple Brazil’s capacity to finish part- processed vaccines. New laws have helped, too. The government changed the rules for clinical research in 2025 to speed up the approval of trials. This should help early investigations into novel medicines where the relative inexperience of Anvisa, the regulator, was choking innovation, says Reginaldo Arcuri of FarmaBrasil, a trade association. The Senate is also due to vote on a national health strategy that would give further preference to domestic manufacturers in public procurement. Brain drain was another problem. Nearly 7,000 researchers left Brazil between 2015 and 2022, according to one think-tank. Lula’s government responded with programmes to attract and retain scientists, as well as to
foster partnerships with Brazilians working abroad. One of them, “Knowledge Brazil”, had a budget of more than $100m to spend on research in 2025 and managed to lure 600 scientists back home. Another $40m was earmarked for research abroad. This year the project will fund 1,000 doctorates and chuck an additional $100m at, among other things, poaching foreigners. The United States is a juicy target, says Alexandre Padilha, the health minister, as Donald Trump’s anti-science agenda is alienating researchers. Lula is eyeing broader benefits, too. Brazil’s economy runs on commodity exports. He hopes that cracking biotech will yield outsised returns and transferable skills for manufacturing as a whole. The government also hopes that boosting the domestic pharmaceutical industry might trim the steep cost of importing medicines for the national health service, the world’s largest universal, free public-health system. The health ministry says the government saved $2bn between 2011 and 2017 thanks to lower prices charged by companies using native APIs. It is not clear whether the government includes the costs of the hefty subsidies behind such numbers. There are obstacles to a Brazilian pharma boom. Culture is the trickiest. Few pharmaceutical companies care about Lula’s goals. Their generics business nets consistent profit at little risk. That the state is funding everything opens the door to accusations of unfair competition. The Trump administration has an investigation pending into Brazil’s industrial policies, including in pharmaceuticals. Lula’s lax attitude to intellectual property could also be a problem. He reportedly considered escalating the spat with Mr Trump by terminating the Brazilian patents of American corporations. No drug company wants to invest in a country that might seize its property. Lula also has to deal with some trade-offs. High drug prices are unpopular, but using price caps to keep medication cheap can discourage private R&D. Autarky can bring more of an industry under state control, but it can also deter innovation. The development of new drugs is happening at Butantan. But the institute benefits from an unusual alignment of research, regulation and manufacturing around the needs—and the money—of the state. Brazil cannot hope to replicate that across the industry. Merck, a multinational
pharma giant, spends about $16bn a year on R&D, roughly ten times Brazil’s entire state pharma spending, even after Lula’s expansion. At best, the state might develop a few products, such as vaccines, where the public- health economics stack up. A broader boom requires Lula to shake off his distrust of private enterprise. As he prepares to run for president for the seventh time in October, that seems unlikely. ■ Sign up to El Boletín, our subscriber-only newsletter on Latin America, to understand the forces shaping a fascinating and complex region. This article was downloaded by zlibrary from https://www.economist.com//the-americas/2026/05/21/why-brazils-government-is- obsessed-with-vaccines
Why Japan and China will struggle to end their feud Is Donald Trump selling out Taiwan? India’s loudest political fight obscures a more urgent one India’s diplomats are hosting the world Overseas Chinese risk losing their oldest institutions
Why Japan and China will struggle to end their feud Warming relations between America and China bode ill for Japan May 21st 2026 RICHARD NIXON’S surprise trip to China to meet Mao Zedong in 1972 came to be known in Japan as a “Nixon shock”. Donald Trump’s choreographed meeting with Xi Jinping was not quite as shocking. But his recalibration of America’s relationship with China has sent allies and foes alike scrambling. On May 19th Takaichi Sanae, the prime minister of Japan, jetted to South Korea to meet her counterpart, Lee Jae Myung. The two were doubtless keen to swap notes on America’s shifting stance towards their imposing neighbour. The implications are perhaps gravest for Japan’s own troubled relationship with China. The two have been locked in a bitter stand-off for more than six