Honduras is set to host one of the world’s most radical neo-liberal economic experiments under a plan to build from scratch the rules, roads and rafters of a “charter city” for foreign investors.
The Central American nation hopes the plan for model development zones, which will have their own laws, tax system, judiciary and police, will emulate the economic success of city states such as Singapore and Hong Kong.
But even as the government signed a “memorandum of understanding” with a group of international investors on Tuesday, opponents tried to lodge a suit at the supreme court for the arrangement to be declared illegal because the “state within a state” risked undermining national laws, sidestepping labour rights, worsening inequality and creating a modern-day enclave that impinged upon the territory of indigenous groups.
The Honduran president, Porfirio Lobo – a landowner from the rightwing National party – has given his full backing to the plan, which was inspired by US economic advisers.
During the signing ceremony, government officials said the initial $14m phase of the project would start in October and create 5,000 jobs in the first six months and 40 times that number in the future – a major incentive in a country where one in four of the workforce are unemployed.
[…] But the idea has provoked controversy in a country already suffering from one of the worst levels of inequality in the world.
Critics say it will allow a foreign elite to set up a low-tax, sympathetically regulated enclave where they can skirt labour standards and environmental rules.
“This would violate the rights of every citizen because it means the cession of part of our territory to a city that would have its own police, its own juridical power, and its own tax system,” said Sandra Marybel Sanchez, who joined a group of protesters who tried to lodge an appeal at the supreme court.
Ismael Moreno, a correspondent for the leftwing Nicaraguan magazine Envio, compared the charter cities to the banana enclaves, which were run on behalf of a foreign elite. He also spelled out the environmental risks, particularly if one of the development sites is the Sico valley, an area of virgin forest on the Mosquito Coast.
The Guardian, Jonathan Watts: “Honduras to build new city with its own laws and tax system to attract investors”.
[…] Democracy is the current industry standard political system, but unfortunately it is ill-suited for a libertarian state. It has substantial systemic flaws, which are well-covered elsewhere, and it poses major problems specifically for libertarians:
1) Most people are not by nature libertarians. David Nolan reports that surveys show at most 16% of people have libertarian beliefs. Nolan, the man who founded the Libertarian Party back in 1971, now calls for libertarians to give up on the strategy of electing candidates! Even Ron Paul, who was enormously popular by libertarian standards and ran during a time of enormous backlash against the establishment, never had the slightest chance of winning the nomination. His “strong” showing got him 1.6% of the delegates to the Republican Party’s national convention. There are simply not enough of us to win elections unless we somehow concentrate our efforts.
2) Democracy is rigged against libertarians. Candidates bid for electoral victory partly by selling future political favors to raise funds and votes for their campaigns. Libertarians (and other honest candidates) who will not abuse their office can’t sell favors, thus have fewer resources to campaign with, and so have a huge intrinsic disadvantage in an election. […]
Cato Unbound, Patri Friedman, April 6th, 2009: “Beyond Folk Activism”.
Al Jazeera, Belén Fernández: “Partitioning Honduras: The advent of charter cities”.
Global Reseach, Annie Bird: “Privately Owned ‘Charter Cities’ in Honduras: Entire Urban Areas Handed over to Corporations”.