Honduras's chartered cities

Trujillo, Honduras

This is a complicated and strange story, but it is worth following as it could have a major impact on small nations with frowned upon economies. This is an attempt at a very condensed version of the events that almost led to a private city of "peace, prosperity, happiness, and well-being" in Trujillo, Honduras.

In 2009, Hondura's democratically elected government was thrown out in a coup d'état by the military. Since then the new Honduran National Congress has been pushing the idea of setting up three segregated private city states ("charter cities") on under-utilised land. The future cities all occupy and extend various afro-indigenous towns along the Caribbean and Pacific coasts with what is an extension of the "special economic zone" concept, or "Aynrandia", depending on who is talking.

The modern Charter City concept can be easily traced back to Paul Romer's website. For a 10 minute insight into what he espouses, watch the following TED video. It also talks about the early reception of his concept in Honduras.

In Romer's talk, these new cities will give 700 million potential migrants the ability to migrate to a free trade zone close to home... rather than to the United States. It's all about free choice - as long as you don't mind not being able to vote. Others see this as a form of 21st Century colonialism, taking U.S. cities to where the cheap labour is. The concept of the charter city is well-supported by free market libertarians, including reason.com, who last week wrote:

For the last few years, libertarians and other futurists have gazed upon this misgoverned mess of mountainous jungle and imagined a clean slate for innovations in political and economic growth. Honduras, they believe, can become a laboratory for creating wealth-producing institutions that can then be replicated worldwide. The only catch: To become a 21st-century trailblazer, Honduras—or at least a small territory within it—must become, well, not Honduras.

[ Here is the long version of the article quoted above. ]

In 2011, preparations were made. The constitution of Honduras was amended, and an area at Trujillo on the coast was cleared for a cruise ship development. Global Research has reported what this meant at ground level:

The cruise ship dock and mega-tourism project ... are annihilating the Garifuna community of Rio Negro, which has literally been bulldozed away, and the families were resettled in a “model community” outside the neighboring Garifuna community of Cristales.

Romer's run with Honduras' government came to an end last September when the government side-stepped the Transparency Commission they'd asked him to set up (though that's now denied), and awarded the contract for the first city to little known Grupo MGK. CEO Michael Strong previously founded the Free Cities Institute, and more recently the Flow Project, which promotes radical social entrepreneurship as a way to find peace through commerce.

The FLOW Movement combines freedom, voluntary exchange and enterprise from the classical liberal tradition with love, compassion, social and environmental consciousness that is championed in the human potential movement in order to create an inspiring, integrated vision. [ link ]

The next month, Honduras' Supreme Court quashed the constitutional amendment in a four to one vote amid concerns about sovereignty. This was remedied by firing the same four judges over another issue. As of this January, the development has another green light.

While Strong believed his utopian libertarian city is the peaceful solution to global poverty, the current inhabitants of the sites might disagree. Grassroots International reported in February that a peasant revolt was occurring, and that nine people have been murdered so far this year, adding to the 79 killed since 2010.

Strong recently left Grupo MGK and is thinking of concentrating on the U.S. domestic market, particularly Detroit.

For a recent perspective on what is happening with Honduras' charter cities, watch this 25 minute Inside Story from Al Jazeera.

External links:
Different ways to design a free market city (video, April, 2011)
Free Cities conference, 2011
Michael Strongs education blog
Honduras shrugged, Economist 2011
Charter Cities
Honduras Resiste