Paraguayans go to the polls Sunday to pick their next president. Domestically, the big story is whether centrist opposition leader Efraín Alegre can beat Santiago Peña from the right-wing Colorado Party, which has almost monopolized power since the country ditched military rule in 1989. But there are also two geopolitical angles to keep an eye on.
First, the election is being closely watched in Taipei and Beijing. If he wins, Alegre has suggested he might switch diplomatic relations from Taiwan to China — meaning that the self-ruled island would lose its last friend in South America. The presidential candidate believes that Taiwan has not invested enough in Paraguay to offset the immense cost of not doing business with China, so he's made it clear to Tsai Ing-wen: Show us the money or we'll call Xi Jinping.
Second, the next president will have to start talks with neighbor Brazil on how to divvy up electricity generated by the Itaipú hydroelectric dam, the world's second most powerful. Though the two countries co-own the dam, Brazil gets a lot more electricity because it forked out more money upfront. Paraguay — which only consumes 8% of its electricity — would like a bigger share in order to sell power on the open market, a potential windfall of extra revenue for the government.
