The coalition government, which is led by the Partido Antiá Restrukturá (PAR) and includes two minority partners-the Partido MAN (MAN) and the Partido Inovashon Nashonal (PIN)-will contest the general election in April 2021; The Economist Intelligence Unit forecasts the PAR to be re-elected for a third term. After the election, the PAR will continue to face an uphill battle in navigating Curaçao through the coronavirus (Covid-19) pandemic, which has dramatically affected the small, tourism-dependent economy. Political stability will be subject to risks throughout the 2021-22 forecast period, largely in the form of differences with the opposition relating to the Dutch government's influence over Curaçao's internal affairs and economic policy-especially regarding fiscal support during the pandemic; these differences will remain regardless of the outcome of the 2021 elections and will hamper governability. Conditions of Dutch-led oversight and governance structures have proven extremely contentious in Curaçao (talks to adjust the conditions are ongoing), and it appears that the opposition is exploiting this tension by claiming that fresh polls would give the newly elected government a stronger mandate in future negotiations with the Netherlands. We do not expect the prospective government to have a significantly stronger mandate than the present government to negotiate with the Dutch, given the few options that the country has other than relying on the Dutch government for fiscal support.

The domestic atmosphere is susceptible to bouts of protests and strikes; the government is under pressure after adopting stringent austerity measures, a condition for receiving financial assistance from the Netherlands that led to social unrest in late June 2020. Given that the government will have to rely on additional funding from the Netherlands to strengthen an economy that has been crippled by the shutdown of tourism, stringent austerity measures are on the table, and the domestic environment will be a hotbed for civil unrest and strikes that will further undermine the economic recovery.

The government managed to get the National Ordinance Exceptional Situation (known as the Emergency Act) passed in parliament on December 3rd 2020, with 11 votes in favour to 9 votes against. The law gives the government the power to declare a state of emergency in order to contain a rapid spread of the virus, which carries with it the executive ability to impose restrictions on certain civil liberties. As a concession to the opposition, which argued that the legislation grants the executive undue power, a last-minute amendment stipulates that parliament must meet within 48 hours of a state of emergency being declared to vote on how long it should last. We do not expect the executive to use the law as a means of delaying elections, but imposing a state of emergency and restricting civil liberties does carry the risk of inciting some social unrest.