Update Country Report Curaçao 01 Mar 2021

As Curaçao prepares for its March 19th presidential and parliamentary elections, in which 15 parties will compete for 21 parliamentary seats, political platforms have taken shape. It is highly unlikely that a single party will win a majority, meaning that coalition negotiations are on the cards. The Economist Intelligence Unit expects the largest party, the Partido Alternativa Real (PAR), which is led by the incumbent prime minister, Eugene Rhuggenaath, and rules in coalition with the Partido MAN (MAN), to lose seats, preventing it from forming the next government.

The PAR has six seats in parliament and is aiming to hold onto this position. However, Mr Rhuggenaath and the PAR have seen their popularity decline over the last year; the government's handling of the coronavirus (Covid-19) pandemic has been criticised, and there was a brief period of riots and unrest after the government agreed to adopt austerity measures (reining in non-emergency spending) in return for financial support from the Netherlands to deal with the pandemic.

Mr Rhuggenaath is attempting to boost his popularity through a swift rollout of Covid-19 vaccines across the island (facilitated by the Netherlands), perhaps in a display of his administration's ability to negotiate effectively with the Dutch government. Mr Rhuggenaath has also pledged economic support for ailing businesses and for reopening the tourism sector. Meanwhile, the MAN holds five seats and is seeking to distance itself slightly from the PAR to avoid being punished at the polls. Under its leader, Steven Martina, the party has pledged greater economic development through the Curaçao Island Development Plan, which would include readdressing the zoning of land for residential, commercial, tourism and agricultural purposes.

Opposition stands to gain

The main opposition, Movementu Futuro Kòrsou (MFK), which has five seats, is aiming to capitalise on popular dissatisfaction with the Rhuggenaath administration. The MFK has been highly critical of the government's handling of the pandemic and opposed the administration's acceptance of the conditions set by the Netherlands (which included cutting public-sector salaries and red tape and lowering the cost of doing business) in return for financial support. The MFK considers that these terms contravene Curaçao's sovereignty and is therefore aiming to run on a platform of policies that prioritise national interests.

Opposition parties have also boycotted parliamentary sessions for a month, denying the ruling parties a quorum to swear in a new deputy, Emmilou Capriles, to replace Jeser El Ayoubi, who has stepped down. Although the Dutch government intervened and appointed Ms Capriles by decree, the episode highlighted the weakness of the ruling coalition in the legislature. The MFK leader, Gilmar Pisas, has also been strongly critical of the current state of emergency, which he views as damaging to the economy and an example of executive over-reach. The lack of quorum in the legislature will also block an extension of the state of emergency.

Elections in Curaçao are often closely fought, with coalitions required to form a government. Overall, we believe that the MFK will manage to take some seats from the PAR, strengthening its own position in the legislature and eroding the PAR's status as the largest single party. Meanwhile, the efforts of the MAN to distance itself somewhat from the PAR will hurt the ruling party's chances of clinging to power. Although the PAR could theoretically still form a government with the help of several smaller parties that are vying for single seats, this is highly unlikely in practice. We therefore view the MFK as the party best positioned to win the upcoming elections, although it will have to build a coalition with either the MAN or some of the smaller parties in order to form a government. Whichever party takes power, it will need to swiftly address the major financial challenges facing the island, including making a decision about whether to request more support from the Netherlands.