Tag Archives: Honduras

Private city for business opens in Honduras

Posted on by

A Honduras city primed for business will soon open for remote operators:

Photo by John Lee on Pexels.com

Próspera is the first project to gain approval from Honduras to start a privately governed charter city, under a national program started in 2013. It has its own constitution of sorts and a 3,500-page legal code with frameworks for political representation and the resolution of legal disputes, as well as minimum wage (higher than Honduras’s) and income taxes (lower in most cases). After nearly half a decade of development, the settlement will announce next week that it will begin considering applications from potential residents this summer.

The first colonists will be e-residents. Próspera doesn’t yet have housing ready to be occupied. But even after the site is built out, most constituents will never set foot on local soil, says Erick Brimen, its main proprietor. Instead, Brimen expects about two-thirds of Prósperans to sign up for residency in order to incorporate businesses there or take jobs with local employers while living elsewhere…

The idea behind charter cities, along with their predecessor seasteading, which sought to create independent nations floating in the ocean, is to compete for citizens through innovative, business-friendly governing systems. For some reason, the idea has long been linked to Honduras, an impoverished country whose governing system is classified as “partly free” by the human rights organization Freedom House. Paul Romer, an American economist who pioneered the idea of charter cities, tried to start one in the country a decade ago. It failed, but Honduras has spent much of the time since then writing a law to enable such cities, which are known in the country as Zedes, short for zonas de empleo y dessarollo económicos (employment and economic development zones).

But the prospect of creating pockets of prosperity that play by their own rules is controversial for obvious reasons. Próspera has drawn protests from local residents who see a lack of transparency and little to gain from its existence, and a group of local political leaders signed a letter of opposition in October. This month, an arm of the Technical University of Munich said it’s reevaluating its relationship with Próspera and that it generally withdraws from projects if there are indications of human rights violations. Representatives for TUM didn’t respond to requests to elaborate. A spokeswoman for Próspera says it has had a “great working relationship with TUM over the years.” 

Although this city has been in the works for years, it seems appropriate that is will open for remote businesses in the COVID-19 era. Even without a physical presence in the city, corporations will be able to incorporate there and enjoy the benefits.

Down the road, it is interesting to imagine what a thriving or beleagured charter city could be like. For some reason, I am thinking of some of the more colorful communities from Star Wars where all sorts of characters come together to conduct their activities. How many people would come to live and work versus how many will access the city’s benefits from afar? What kinds of alterations to the regulations might be necessary? How many free market cities might this inspire elsewhere?

Honduras moving forward with the construction of three private cities

Posted on by

Honduras is moving forward in allowing three private cities to be built though some have voiced objections:

The “model cities” will have their own judiciary, laws, governments and police forces. They also will be empowered to sign international agreements on trade and investment and set their own immigration policy.

Congress president Juan Hernandez said the investment group MGK will invest $15 million to begin building basic infrastructure for the first model city near Puerto Castilla on the Caribbean coast. That first city would create 5,000 jobs over the next six months and up to 200,000 jobs in the future, Hernandez said. South Korea has given Honduras $4 million to conduct a feasibility study, he said…

The project is opposed by civic groups as well as the indigenous Garifuna people, who say they don’t want their land near Puerto Castilla on the Caribbean coast to be used for the project. Living along Central America’s Caribbean coast, the Garifuna are descendants of the Amazon’s Arawak Indians, the Caribbean’s Caribes and escaped West African slaves…

The president of Honduras will appoint “globally respected international figures” without financial interests in the projects to nine-member independent boards that will oversee the running of the cities, whose daily operations will be administered by a board-appointed governor. Future appointments to the board will be decided by votes by standing board members, Strong said.

I could understand how this would be alluring for governments that are struggling to attract foreign capital and create jobs. However, privatization on this scale sounds daunting and possible problematic. It is one thing to have developers own and run neighborhoods or particular projects; but a whole city? With separate international powers and not having to follow Honduran law? With a future promise of allowing citizens to vote? I could imagine some of the responses from urban sociologists who write about the privatization of public space. What happens when these developers run afoul of citizens or Honduran law and conventions? What kind of free speech rights will citizens have and will they have any say in what happens? It is one thing to have to follow the rules of corporations in private-public spaces in American cities (see these examples in San Francisco) but another when the whole city follows the guidelines of developers or “respected international figures.”

Assuming this moves forward and the cities are built, it will be fascinating to see what happens.