Upon entering office, Douglas faced several formidable challenges to his leadership. The most important to address was the breakdown of law and order which had increasingly plagued St. Kitts-Nevis. During the campaign he had pledged to clean up the federation's image as a haven for drug traffickers and money launderers. In June 2002, his progress in this regard was demonstrated when St. Kitts-Nevis was removed from the Organization for Economic Co-operation and Development (OECD) list of money-laundering countries. In his first speech as prime minister, he outlined an ambitious program to reorganize the police forces and to remove them from the country's political battles. All too often, the police had not remained an impartial organization dedicated solely to its stated mission. Thus, Douglas announced that his government would work in cooperation with the British in a major effort to improve the police. During the campaign, Douglas committed himself on several major fronts. He criticized the government for its performance on keeping the economy strong. After assuming power, the Labour Party government proceeded to develop effective programs in the fields of tourism, housing, education, infrastructure development, health care, sports administration, and foreign relations, particularly as they relate to the enhanced image of St. Kitts and Nevis abroad.
As a result of the successes of the SKNLP's initial term, in March 2000, the voters of St. Kitts-Nevis returned Douglas and his party to office with an even greater mandate by voting all eight of the St. Kitts' seats to the SKNLP, completely rejecting the PAM party of former Prime Minister, Simmonds. The CCM retained its two seats in the Parliament, and the NRP held its one seat.