Now one year into the term of the prime minister, Gilmar Pisas of the Movementu Futuro Kòrsou (MFK), EIU expects the political climate to remain stable over the 2022-23 forecast period. The MFK has formed a coalition government with the Partido Nashonal di Pueblo (PNP); 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 covid-19 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 administration 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, if it won the vote, the new government would have 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. In April the Staten unanimously voted for the government to continue to renegotiate the terms of an agreement that was signed under the previous administration to create the Caribbean Body for Reform and Development (COHO, a fiscal oversight body). The government and members of the opposition are concerned that the proposed COHO agreement will constrain the country's autonomy. 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.