Inside Story Americas

Will 'charter cities' help or hurt Honduras?

We examine if the creation of so-called charter cities is a bold economic opportunity or 21st century colonialism.
Last Modified: 08 Feb 2013 09:53

Honduras revives the idea of the charter city - free-market enclaves where corporations can operate virtually under their own rules.

"Honduras is a place that has been devastated for literally centuries by the oligarchs. But now there are some laws that get in their way and they would like to get rid of those laws .... They simply see this as yet another way to increase their wealth at the expense of other folks."

- William Black, a professor of economics and law

The idea is to create at least two so-called super-cities that, although on Honduran land, would be planned and run by private companies and free to make up their own laws.
Its backers say the scheme would attract investment on a huge scale and create business-friendly enclaves similar to Hong Kong and Singapore.

However opponents of the plan have raised many concerns. They say it would violate labour rights, civil rights, the environment and the constitution.

Last year, the original bill to allow construction of the cities was ruled unconstitutional by Honduras's Supreme Court.

But congress, dominated by the ruling party, subsequently voted to sack four of the judges who were against the project. And that has helped clear the legal obstacles.

"The government has been very committed to ... give this image that Honduras is very much a place that can be invested in ... The areas where the model cities are being proposed, there are really strong land struggles that had been ongoing for decades ...  Model cities will create even bigger land conflict problems."

- Karen Spring, a human rights activist

In addition, although the proposed sites for the cities are often described as 'unpopulated', much of it belongs to the country's Garifuna community, who do not expect prosperity but displacement.

Can charter cities bring investors to Honduras? Will charter cities change the image of Honduras? And is it a bold economic opportunity or 21st century colonialism?

Joining Inside Story Americas, with presenter Shihab Rattansi, to discuss the charter cities in Honduras are guests: Maricruz Magowan, an economist and political commentator; Karen Spring, a human rights activist who specialises in Honduras with the group Rights Action; and William Black, a professor of economics and law at the University of Missouri.

"Great things always started with great ideas and I think this is a great idea. However, you will need to ermpower the non elites, which is most of the country, in order for this [model] to work ... You cannot divorce economics from politics and you have to ask yourself what's the incentive of staying with what they have and what's the incentive of doing something new ... Right now there is not enough incentive to move to something new, but the idea is good ... The elites will hijack this idea, turn it around and turn it into something that will benefit them, that's why I am against it. I am for the idea, but against implementing it right now under the current conditions."

Maricruz Magowan, an economist and political commentator


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