The Economist Explores Honduras Charter Cities

Trujillo is a sleepy backwater, but one with a lot of history. The beautiful bay surrounded by lagoons and mountains on the northern coast of Honduras was where Christopher Columbus set foot on the American continent during his fourth voyage in 1502. But in a few decades, it might be known for something entirely different: being the Hong Kong of the West. Scores of skyscrapers and millions of people could one day surround the natural harbour. The new city could dominate Honduras, today one of the poorest and most crime-ridden countries in Central America, becoming a magnet for most of the region’s migrants.

The prospect may sound fantastic, but this is the goal of an ambitious development project that Honduras is about to embark upon. In a nutshell, the Honduran government wants to create what amounts to internal start-ups—quasi-independent city-states that begin with a clean slate and are then overseen by outside experts. They will have their own government, write their own laws, manage their own currency and, eventually, hold their own elections.

This year the Honduran legislature has taken the first big steps towards the creation of what it called “special development regions”. It has passed a constitutional amendment making them possible and approved a “constitutional statute” that creates their autonomous legal framework. Mauritius has just announced that it will allow its supreme court to hear cases from the new entities (beyond that, in a relic of colonialism, is Britain’s Privy Council, to which the decisions of the island state’s supreme court can be appealed). And on December 6th Porfirio Lobo, the Honduran president, appointed the first members of the “transparency commission”, the body that will oversee the new entities’ integrity.

Finding new worlds

The road to a Honduran Hong Kong will be long and rough. Forming the transparency commission proved more difficult than expected. It has taken longer to find candidates with the right skills. Then Honduran officials seemed to have second thoughts about the commission. But for enthusiasts, the progress so far is still thrilling. The development regions, they say, will allow policies to be tested on a small scale. If their laws and institutions make them an attractive place to live and do business, people will move there. They could also provide healthy competition for the government and spur reform.

The Honduran regions are modelled on a concept called “charter cities” developed by Paul Romer, an economics professor at New York University. The principle is simple: take a piece of uninhabited land big enough for a city of several million, govern it by well-tried rules and let those who like the idea move there. The aim is to replicate the success of such places as Hong Kong, not as colonial outposts but as models of development…continue “City Building: Hong Kong in Honduras” from the Economist here.

One Response to "The Economist Explores Honduras Charter Cities"

  1. Trujillo Patty  December 9, 2011 at 2:30 pm

    This whole idea scares the hell out of me. Give up democracy? Why? are they saying the people of Trujillo are not smart enough to govern themselves.? Print their own money. That’s nuts!! So we would need money from each of these model cities in order to travel between cities. Are there going to be places to exchange lempiras, Trujillo dollars, etc, at the entrance of each local. Do we really want to model Trujillo after Hong Kong? We already have prostitution, drugs, guns, gangsters, etc, etc. I, for one, am not willing to give up my freedom so someone else can make money while enslaving el pueblo.

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