The incoming government's near-term policy focus will be the same as its predecessor's: to contain the spread and the economic fallout from the coronavirus pandemic. In this regard, the outgoing government has set an ambitious target of vaccinating all adults by the end of June, which the new government will follow through on. Curaçao received its first shipment of Covid-19 vaccines from the Netherlands in mid-February, and the Dutch government will continue to be the main provider of vaccines to the island. At the time of writing about 54% of the population had received at least one dose and 44% had been fully vaccinated. The ambitious schedule is designed to ensure that the country is fully immunised before the start of the hurricane season, which lasts from June to November, and could affect supplies and the rollout of the programme. If successful, the island would be well positioned for the start of the tourism season in November. We expect the vaccine rollout to continue at the current pace, although risks include supply-side bottlenecks and global competition. On balance, we expect herd immunity to be achieved in late 2021.

Items on the new government's policy agenda include boosting production and exports by diversifying the economy, improving public-sector efficiency and tax collection, strengthening and expanding tourism, restarting operations at the Isla refinery and the Bullen Bay Oil Terminal, increasing alternative energy generation, developing a second port at Vaersenbaai Noord, and improved co-operation with the other Dutch Caribbean islands. However, Curaçao's ability to undertake recovery measures will depend on the level of Dutch financing that it manages to secure.

The Rhuggenaath government and the Netherlands reached an agreement in early November 2020 to establish the Caribbean Entity for Reform and Development (COHO), which would provide long-term financial support and oversight to the island. In exchange for setting up the new body, the Dutch government will provide a third fiscal support package of Naf181m (US$100m, or 4.4% of estimated 2020 GDP), as well as a long-term investment package. The process of establishing the body has, however, been disrupted by the incoming government's opposition to receiving oversight from the COHO and its stated preference for IMF oversight. We expect the incoming government's stance on COHO to delay the arrival of the third fiscal support package, which would in turn delay economic recovery measures.