The next government will be formed by a coalition between the Movementu Futuro Kòrsou (MFK) and the Partido Nashonal di Pueblo (PNP). Both parties signed a coalition agreement in late April, but at the time of writing they had not yet taken office. The government formation process seems to have been delayed by a drawn-out selection and screening of cabinet ministers. The Economist Intelligence Unit expects the MFK-PNP government to be sworn in in June.

The incoming government will be tasked with navigating Curaçao through economic recovery from 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 cross-party differences 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 hamper governability during the forecast period. Conditions of Dutch-led oversight and governance structures have proven extremely contentious in Curaçao. Although the MFK had claimed prior to the March general election that a fresh poll would give the newly elected government a stronger mandate in future negotiations with the Netherlands, we do not expect the prospective MFK-PNP government to have significantly stronger capacity than the outgoing government-formed by a coalition between the Partido Alternativa Real (PAR) and the Partido MAN (MAN), and led by the prime minister, Eugene Rhuggenaath-to negotiate with the Dutch authorities, given the few options that the country has other than to rely on the Dutch government for fiscal support.

The incoming government has a stronger legislative position than its predecessor, with 13 out of the 21 seats in the parliament, compared with 11 seats held by the outgoing PAR and MAN. This will allow it to advance its policy agenda with relative ease. However, given that the next government will have to rely on additional funding from the Netherlands-in the absence of other viable options-to strengthen an economy crippled by the shutdown of tourism, stringent austerity measures will remain on the table. The domestic environment will be a hotbed for civil unrest and strikes (as seen in June 2020, when the current government similarly adopted austere measures), which will further undermine the economic recovery.