First inhabited by Arawak and Carib Indians, the islands of Aruba and the Netherlands Antilles were taken by the Spanish in the 16th century, falling in turn to the Dutch in the course of the 17th century. The Dutch used them as trading posts, and by the 17th century the mercantile ports of Sint Eustatius and Curaçao were 2 of the 3 richest in the Caribbean (with Port Royal in Jamaica). After multiple changes of hands, the 6 islands were finally secured by the Netherlands under the Treaty of Paris in 1816 and officially constituted as the Netherlands Antilles in 1845. Autonomy from the Netherlands came in 1956.
In 1986 Aruba, resentful of Curaçaoan political dominance, left the federation to seek its own free-standing membershipin the Dutch overseas community. Fears in the 1980s that the Netherlands Antilles might fragment further as other islands sought autonomy were partially resolved in a nation-wide referendum in November 1993 in which all 5 remaining islands opted for continued union. However, a further referendum held in Sint Maarten in June 2000 found 67 percent of its inhabitants in favor of separating from the federation. Such a partition can only be undertaken with the cooperation of the other islands, but it remains a source of on-going uncertainty. The Dutch government is content to let the islands decide their own future but is eager for them to develop economic self-sufficiency. Aruba, according to the provisions of its 1986 secession from the Netherlands Antilles, would have become completely independent of the Dutch kingdom in 1996. In 1995, however, this provision was permanently shelved by the Aruban legislature.
Constitutionally the Netherlands Antilles and Aruba are autonomous parliamentary states within the Kingdom of the Netherlands. Their head of state is the Dutch sovereign (Queen Beatrix), who is represented in each country by a governor, appointed by The Hague, but since the 1960s a native-born islander. The Netherlands also administers the islands' foreign affairs and defense arrangements and appoints their senior judges. Internal affairs— including finance, police, telecommunications, education and health—are left to the prime minister of each country, his cabinet (made up of 9 ministers in the Netherlands Antilles and 7 in Aruba), and the parliament, or Staten, which appoints them (22 members in the Netherlands Antilles and 21 in Aruba). In the Netherlands Antilles each island replicates this system in miniature, with each having a lieutenant-governor to represent the Dutch crown, each with an island council, and each with a regional legislature which appoints it. Elections are by proportional representation , suffrage is universal, and electoral terms are 4 years long.
Politics in Netherlands Antilles tend to be island based. Seats in the Staten are distributed by island: 14 from Curaçao, 3 each from Sint Maarten and Bonaire, and 1 each from Saba and Sint Eustatius. Reconciling the various island interests is an often precarious exercise and made more complicated by the proliferation of parties and the tendency of the federation's proportional representation system to produce coalition governments. Although some stability is afforded by Curaçao's control of the Staten—a consequence of its numerical dominance— this has also generated resentment in the other islands. The 2 main parties are both Curaçao-based: the Antillean Restructuring Party (Partido Antía Restrukturá or PAR) and the National People's Party (Partido Nashonal di Pueblo or PNP). The prime minister as of 2001 was Miguel Pourier, leading a coalition that includes 18 of the 22 Staten members, the country's broadest ever.
Aruban governments also tend to be multi-party. The prime minister as of 2001 was Jan Hendrik Emman, leading a coalition of his own Aruban People's Party (Aubaanse Volkspartij or AVP) and the Aruban Liberal Party (Organisacion Liberal Arubano or OLA). Pressing political issues, as in the Netherlands Antilles, turn on the government's program of fiscal austerity, including health-care reform and its controversial planned privatization of the state telecommunications company, Setar.
Both countries rely heavily on income tax for their revenue collection, with important supplements provided by port dues. Tax reform in the Netherlands Antilles, designed to stimulate business growth, has included the reduction of corporate tax rate to 30 percent in 1999 and the raising of the personal tax threshold. Revenue in 1999 totaled US$707.8 million, of which 88 percent (US$622.6 million) comes from taxes. Aruba's revenue in the same year came to US$361.1 million, of which 83 percent (US$299.1 million) came from taxes.