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Country Reports

Curaçao Country Report

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Risk Level

Low
Moderate
Elevated
High
Very High
Severe
Extreme

Overview

Executive Summary

Curaçao faces continuing economic shrinkage in 2019 given weaker net foreign demand. GDP is likely to shrink 0.8% versus a decline of 0.3% in 2018. The government is likely to view keeping the fiscal deficit at low levels as a key priority. It stood at about 1% of GDP in 2018 versus 3.5% in 2017. If the deficit rises again, Curaçao risks pressure from the Netherlands’ central government to impose further austerity measures, without which it could lose its autonomy to draft its own budget, with this responsibility being reclaimed by the mainland Netherlands authorities.The country’s sole 335,000-bpd refinery resumed operations in its crude distillation units and its thermal cracker in January. It had suffered nine months of inactivity in 2018 after US Conoco Phillips filed legal actions against its operator PDVSA to seize crude products. The refinery, one of Curacao’s main sources of revenue, is likely to continue being affected by US sanctions on Venezuela in the one-year outlook with PDVSA no longer able to operate it and Curacao’s authorities seeking a new operator. The ruling Partido Antiá Restrukturá (PAR) of Prime Minister Eugène Rhuggenaath holds just six of the 21 seats in the House of Representatives and leads a coalition with the MAN party and the Partido Inovashon Nashonal (PIN). Despite the political class being pro-business and favouring foreign direct investment, this makes the government very vulnerable to losing support from other parties prior to completing its four-year term in 2021. Curaçao has a low crime rate by regional standards, with only rare incidents of violent crime directed at foreign visitors. The main tourist areas are safe, with few instances of street or opportunistic crime. Nevertheless, gang violence is increasing, especially in poor areas of Willemstad like Buena Vista. Increasing immigration from Venezuela is likely to increase gun-related violence and petty crime.
Last update: April 25, 2019

Operational Outlook

There are no major obstacles to foreign investment and the government is keen to attract business from overseas. Public agencies are relatively efficient and levels of corruption are low by regional standards. Curaçao remains part of the Dutch kingdom, allowing investors to benefit from associate membership of the EU under the overseas countries and territories (OCT) agreements. Another advantage is that the island receives funding from the European Development Fund (EDF). Money-laundering activities persist on the island, although not on a scale that affects legitimate foreign investors.

Last update: November 16, 2018

Terrorism

There is no history of terrorism in Curaçao and the current risk is considered low. A very low risk exists from the activities of international terrorist groups that may indiscriminately target Western interests. However, there is no known home-grown threat and no indications that it constitutes a target for terrorist groups.

Last update: November 15, 2018

War Risks

Overall, there are no significant external threats to the island. Between 2006 and 2010, however, diplomatic relations with Venezuela deteriorated when then-president Hugo Chávez called for the Caribbean to be decolonised and suggested that Curaçao (as well as Aruba and Bonaire) could potentially be used as a base for a planned military intervention to overthrow his government. Relations after 2010 improved based on trade until Venezuela closed the countries' mutual aerial and maritime border in January 2018, arguing that scarce basic goods were being extracted and sold in Curaçao, a claim denied by the latter.

Last update: November 15, 2018

Social Stability

There is a low risk of large-scale or violent protests. Some unrest is likely around general elections. Environmental activism continues to grow, but does not pose any significant threat to businesses operating in Curaçao.

Last update: November 14, 2018