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article imageOp-Ed: Honduras — Corporate developers can buy charter cities

By Ken Hanly     Sep 14, 2012 in Business
Tegucigalpa - Finally developers will not need to go through all sorts of red tape and regulations just to build a business in a country. Now they can just buy a charter city at least in Honduras.
.The Honduran government has just signed an agreement with the U.S. developers MKG group. The agreement involves a plan to establish three charter cities. The cities will have their own government, laws, courts, police forces and even tax systems. Building is to start early next year.
Promoters say the charter cities, which are a type of special development area, will enable Honduras to start development in a country with the world's worst murder rate and where almost two thirds of the people live below the poverty line. I have appended a video meant to promote the charter cities.
Critics, however, claim that the charter cities are simply a 21st century version of the days when Honduras was a banana republic. At that time U.S. companies controlled the government and owned vast tracts of territory. They used the police to control and even kill striking workers.
The first city will be on the Caribbean coast near Puerto Castilla. MKG says it will invest $14 million and create 5,000 jobs. Altogether the company claims 200,000 new jobs will be created. MKG Group CEO Mark Strong crowed::"The future will remember this day as the day that Honduras began developing." Carlos Pineda of the Commission to Promote Public-Private Partnerships said that the deal marked the largest foreign investment in Honduras in 50 years. Probably it represents the largest takeover of Honduran territory in 50 years as well. The Honduran constitution was amended last year to permit these charter cities or "Special Administrative Regions".
The governmental, crime, and economic situation in Honduras is so bad that some analysts have even described it as a failing state. However, these very facts may entice developers to find opportunities for gain in slicing off enclaves that will have business friendly regulations, taxes, and their own police and courts to keep order and control.
Former attorney general Edmundo Orellana warns that charter cities will allow global corporations to establish protectorates within Honduras and steal sovereignty from Honduran citizens. Both Honduras and Guatemala were long dominated by the Standard Fruit Company and United Fruit Company
MKG still has to line up tenants for its charter cities. The developer is looking at service and manufacturing companies, including textile firms, call centers etc. The charter cities will be competing with similar zones in Mexico and elsewhere known as "maquiladoras". The charter cities would have full autonomy in everything except defense and foreign policy.
There is a long article by Annie Bird here that goes into great detail of the background of the development of the Charter Cities plan According to Bird the blueprint for the cities is the work of New York University economist Paul Romer. Romer tried to establish a charter city in Madagascar in 2008.
In late December 20008 Romer traveled to Madagascar and met with President Marc Ravalomanana. The president soon announced he intended to create Charter Cities in Madagascar. But things did not work out: By the end of January 2009, citizens of Madagascar – outraged by these proposals – took to the streets, the military took control and President Ravalomanana left the county.
The U.S. maintains 500 to 600 troops at Soto Cano Air Force Base in Honduras and carries out various operations often as part of the war on drugs. If Hondurans object to charter cities perhaps they can keep the citizens in line or at least give aid to the Honduran security forces.
This opinion article was written by an independent writer. The opinions and views expressed herein are those of the author and are not necessarily intended to reflect those of
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