EIU expects the political climate to be broadly stable over the 2022-23 forecast period. After winning the last general election, in March 2021, the Movementu Futuro Kòrsou (MFK) and the Partido Nashonal di Pueblo (PNP) formed a coalition government, which was sworn in on June 14th and is led by the prime minister, Gilmar Pisas. Together, the parties hold 13 out of the 21 seats in the Staten (the unicameral parliament). Given that the previous government-a coalition between the Partido Alternativa Real (PAR) and the Partido MAN (MAN)-held just 11 seats, there will be fewer risks to governability for the Pisas government than for the previous administration, which had difficulties in advancing its policy agenda. Cross-party differences relating to the Dutch government's influence over Curaçao's internal affairs and economic policy (especially regarding fiscal support during the coronavirus pandemic) will persist, but the government's strong legislative position will allow it to advance its policy agenda relatively easily. The most important task facing the Pisas government is to steer Curaçao's economic recovery from the covid-19 pandemic, which dealt a significant blow to the small, tourism-dependent economy.

The conditions of Dutch-led oversight and governance structures have proven extremely contentious in Curaçao. Before being elected the MFK claimed that the vote would give the new government a stronger mandate in future negotiations with the Netherlands. The party ran on a platform of reducing Dutch influence on the island's fiscal and economic matters and lessening its dependence on Dutch financing. Since taking office Mr Pisas has managed to renegotiate some of the terms of an agreement to create a Caribbean Body for Reform and Development (COHO, a fiscal oversight body) that was signed under the previous administration. However, we do not expect the new government to be able to wean the island off Dutch financing, given that it has few alternative sources of funding. Nor do we expect the government to be able to overturn the main condition of Dutch support, namely the adoption of austerity measures to enable fiscal consolidation. Downside risks to political stability and governability include civil unrest and strikes in response to austerity measures (as seen in June 2020), which would also undermine the island's economic recovery.