Could charter cities -- semi-autonomous cities built in developing countries -- be the answer to countries that are otherwise racked by violent crime, poverty and political turmoil?

Honduras is a country racked by violent crime, poverty and political turmoil.

It has the highest homicide rate in the world, about 86 murders per 100,000 people, as gangs and drug cartels fight wars on its soil. About 65% of Honduras’s population lives in poverty. And after a military coup ousted and exiled President Manuel Zelaya in 2009 -- a move condemned by the UN and many Western governments -- foreign investment to the nation dwindled.

So it shouldn’t come as a complete surprise that the current administration, that of President Porfirio Lobo, is willing to try something a little avant-garde to bring some of that investment back.

The idea came from US economist Paul Romer, who proposes that the creation of charter cities -- semi-autonomous cities in rural sections of developing countries that would have some foreign supervision and, most importantly, would be founded upon a new set of rules -- can lift countries out of poverty. With Romer’s involvement, the Lobo administration wants to build a sort of Hong Kong in the middle of Honduras.

When Hong Kong was ruled by the British from 1841 to 1997, it had what amounted to a charter, a set of new rules imported by British colonialists that differed greatly from what already existed in China. Romer argues that it was this set of foreign laws, social norms and institutions that was responsible for Hong Kong’s economic rise in the 20th Century.

Following this model, Honduras’s political leadership wants to create a charter city on the country’s Caribbean coast, around the sparsely populated fishing and farming town of Trujillo. If it works, other countries may follow suit, changing the landscape of both politics and geography around the world.
In Honduras, this radical plan is not without controversy. It has been denounced as “21st-century colonialism” by former attorney general Angel Orellana -- a criticism echoed by economists, journalists and indeed Honduran citizens themselves.

“We have a problem with the charter city, which is going to be inside Garífuna land,” human rights organizer Carla Garcia is quoted as saying on the non-profit news and commentary website “They say that region is sparsely populated, but there are about 20,000 [Garífuna people living in the Trujillo area]. Twenty thousand Garífunas would have to leave and find somewhere else to live, only coming back when the charter city is built to see if they can work there.”

Romer’s original idea for charter cities involved using uninhabited land, but that hasn’t proved possible in Honduras. Which brings up another, related criticism -- that charter cities’ one-size-fits-all approach to development ignores the context of local culture. This is the problem Romer encountered when the African country of Madagascar expressed an interest in building two charter cities in late 2008. The decision to give over land to foreign control was wildly unpopular and resulted in violent protests. President Marc Ravalomanana was eventually ousted from office, as was the grand experiment to create what would have been the world’s first charter city.

But Romer said that his plan is not neo-imperialism because it creates choice, which he believes to be the antidote to coercion and condescension, two key characteristics that made imperialism inhumane. People -- both locals and foreigners -- will have the choice of whether to move to charter cities, he said, and in that sense, they can “vote with their feet and leave whenever they want.

If Honduras becomes the first place to set his idea into motion, the world will be watching, waiting to see whether this ambitious experiment will produce a thriving economic centre whose successes will spread to other parts of the country, or whether it will instead create a new kind of colonialism, in which the Honduran people could be exploited for foreign economic gain.

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