A New City in Honduras

+ Paul Romer

The government in Honduras is convinced that a charter city could be the safe playing field, with new rules, where Hondurans of all backgrounds can come together and put their skills to work with the financial resources, expertise, and technology available in the rest of the world.

To implement this vision, the Honduran National Congress has already passed an amendment to the constitution that gives the government the power to create special development regions (which based on the name in Spanish, are abbreviated as REDs). The amendment passed with 126 votes in favor from a total of 128 members of Congress (one abstention and one vote against.) The nearly unanimous vote sends a strong signal about the breadth of support for this new initiative. The National Party, the party of the government and the President (who is elected separately), has about 70 seats in Congress. Members of all parties supported the amendment, including members from rival factions within the opposition Liberal Party.
To become a part of the constitution, the amendment must be passed again in the new Congressional session, which has already begun.

Here are the key points in the amendment:

  • The government of Honduras has the option to create one or more REDs, but in no way locks them into to doing so.
  • To create an RED and establish its basic system of governance, the amendment requires that the Congress pass a piece of enabling legislation that they call a Constitutional Statute. This requires a two-thirds majority to pass. A subsequent Congress can change this enabling legislation only with the same two-thirds majority and approval by referendum from the citizens living in the RED.
  • The REDs would be areas with their own legal personality and jurisdiction, their own administrative systems and laws. An RED can also negotiate international treaties with partner countries or organizations. Congress would need to ratify these international treaties with a simple majority.
  • Judges for its judicial system will be nominated by the governing authority in the REDbut subject to approval by a 2/3rds majority in the Congress. The judicial arrangement would allow the use of an external body that acts as the court of final appeal for judicial decisions from the zone.
  • Laws developed by the governing authority of the RED require a ratifying vote by the Congress. This vote would be a simple vote to approve or reject. Approval requires only a simple majority. (This is similar to the BRAC rules that govern military base closures in the United States.)

Most important among the immediate next steps is a public discussion about the merits of establishing the first RED, its location, and the specifics about how foreign governments can assist in its governance. The government is already working to raise awareness of the effort both in Honduras and internationally. The international efforts will focus on potential partner countries, major investors, firms and individuals with special expertise, and influential supporters in the broad community of people concerned with economic development.
Charter Cities will continue to play an independent advisory role. As a 501( c )(3) we rely exclusively on philanthropic support. We do not accept consulting fees or expense reimbursement from the Honduran government or any other government. Nor will the organization or anyone who works for it have any financial stake in the development of a new city.

A new city in Honduras could create important opportunities. Each year, roughly 75,000 people leave Honduras in search of jobs in the United States. Many go without their families. Around 10,000 of them are kidnapped along the way and held for ransom. Many who reach the United States live in fear of deportation.

The total number of people who incur these risks and deprivations to seek out opportunity is very large. Before the most recent slump, estimates suggest that about 1 million migrants from Latin America reached the United States each year and that at least two-thirds of them do not have legal status.

The passage of the amendment is a decisive first step toward creating in Honduras the kinds of opportunities that migrants seek up north, but in a place where families can stay together, be safe, and enjoy the full protection of the law. The specifics have yet to be determined, but discussions have centered on a site large enough to accommodate a city that could eventually grow to 10 million people. As large as this sounds, it is small compared to the annual flow of migrants from the region into the United States.

This bold step did not go unnoticed—several major international investors have already expressed interest in the project. President Lobo will soon travel abroad to build more public and private support. We hope that the rest of the world will respond in kind, working with the Honduran people to establish a new city—a city that could become an important hub for the Western hemisphere and a driver of growth and development in the region.

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