Update Country Report Curaçao 08 Mar 2018

Event

Curaçao and Sint Maarten have jointly requested associate membership of the Caribbean Community (Caricom), a regional economic integration and co-operation body. Caricom is currently considering the two countries' application.

Analysis

In late February Caricom members held a summit in Haiti, during which the heads of state present approved the applications by Curaçao and Sint Maarten. This means that Caricom can now begin the process of assessing the applications and working with the two countries to determine how associate membership could be implemented. Membership of Caricom would benefit Curaçao and Sint Maarten both economically and politically, and would also highlight their independent status from the Netherlands.

Caricom currently has 15 full members and five associate members. Curaçao and Sint Maarten have observer status at present, but becoming associate members would allow them to play a greater role in formulating policy and enable them to trade more freely within the group. This could lead to increased regional trade and tourism, with the latter advantage providing some economic compensation for Curaçao, which has suffered from a sharp decline in tourism from Venezuela over the past year. Moreover, the two countries will have a say in formulating regional climate-change mitigation policy, which poses an existential threat to their economies.

In addition, acceding to membership of Caricom is a further move away from Dutch influence for the former Netherlands Antilles countries. Although both retain close constitutional ties with the Netherlands, they have greater independence of policy following the dissolution of the Netherlands Antilles in 2010 and can now enter economic association agreements to which the Netherlands is not party. Moreover, some political friction between the islands and The Netherlands, particularly on the part of Sint Maarten, means that membership of Caricom would play well domestically for both governments.

The accession process for both countries will take some time, and we do not expect associate membership to be granted until 2019 at the earliest, especially given Sint Maarten's current focus on post-hurricane reconstruction efforts. Nonetheless, closer links with Caricom should provide greater economic support over the medium term and also allow Curaçao and Sint Maarten to increase their diplomatic profile within the region.

Impact on the forecast

This development supports our forecast that the two countries will seek to intensify ties with their neighbours in the medium term.