Related
The Economist
Press
/ Dec 19,2011
The Economist on Honduran Efforts to Establish a Reform Zone
May 26,2010
Charter Cities, Honduran REDs, and Canada
+ Brandon Fuller
Paul Romer and Octavio Sanchez, chief of staff to the President of Honduras, have an oped in this morning’s Globe & Mail. They describe Honduran efforts to establish a new reform zone and the ways in which Canada can participate.
With the near unanimous support of its Congress, Honduras recently defined a new legal entity: la Región Especial de Desarrollo. A RED is an independent reform zone intended to offer jobs and safety to families who lack a good alternative; officials in the RED will be able to partner with foreign governments in critical areas such as policing, jurisprudence and transparency. By participating, Canada can lead an innovative approach to development assistance, an approach that tackles the primary roadblock to prosperity in the developing world: weak governance.
The oped was released in tandeman with a new report from the Macdonald-Laurier Institute. The report covers charter cities, Honduran REDs, and the potential for Canada to lead on a new approach to development assistance. Carlo Dade, a Senior Fellow at the School for International Development and Global Studies at the University of Ottawa authored the forward to the report. Here’s an excerpt from Carlo’s forward:
Honduras is currently a country of focus for Canada and is its largest recipient of bi-lateral aid in Central America. All of this attention amounts to roughly CD$23 million a year spread over 20 widely divergent projects. Additionally, 500 Hondurans participate annually in Canada’s temporary foreign workers program. This is probably the limit for Canada for traditional development assistance to Honduras. Yet it is impossible to see any or all of this having any significant macro impact in a country of over seven and a half million people.Recognizing this shortcoming, Canada has been trying to supplement its traditional development assistance by promoting trade and signing trade agreements. These agreements offer an important opportunity for countries like Honduras to create the types of formal sector jobs that can reduce poverty and give poor Hondurans the types of opportunities they now must seek in the United States. But the agreements only offer an opportunity. They cannot, in and of themselves, provide the types and scale of change necessary to fully realize it. The agreements are also undermined by Canadians’ worries over labour, environmental, and judicial standards and their enforcement in places like Honduras.A charter city would, again, be able to surmount both obstacles. The city would bring a set of institutions and structures that would allow a country like Honduras to more fully and equitably benefit from foreign trade. These institutions would also directly address concerns about labour, environmental, and other standards.