Will the first Charter City be in Honduras?

A reader pointed us to the news that the Honduras is deliberating whether to pass legislation this month that would pave the way for the first “Charter City” to be created on Honduran soil by 2012. The radical brainchild of Stanford economist Paul Romer, the Charter Cities concept is based on the idea that good rules make good societies. Accordingly, poor countries should be able to galvanize their own development by building foreign-financed and foreign-run cities governed by a new, better set of rules.  It has been lauded as a bold, innovative idea (so crazy it just might work) and criticized as historically inaccurate or representing a new strain of colonialism (just plain crazy).

That debate just got a lot less theoretical in Honduras, as President Porfirio Lobo announced that 1000 square kilometers* currently “doing nothing” could become a “Honduran Dream” if only Congress and the Honduran people would take a risk in the name of progress.

The substitution of the new “Honduran Dream” for the old American one represents Lobo’s solution to the immigration problem too. Hondurans in search of a better life could choose the new Charter City, where they would find jobs created by new export industries, with no crime, first-class education and health care, clear property rights, and a fair courts system, instead of the US “where they suffer all sorts of situations at odds with human dignity,” said the President.

Opponents say the plan will undermine Honduran sovereignty and destroy natural resources in uninhabited areas. One backwards-looking editorial, entitled Another enclave or another utopia, argues that large-scale foreign investments and interventions in Honduras have historically tended to turn out badly for Hondurans.

*UPDATE 12:15 pm: Professor Romer wrote to say that the Honduran press misunderstood President Lobos when they reported that the Charter City would be 33 square kilometers. The proposed territory would actually be 33 kilometers on each side, or 1000 square kilometers. The third paragraph was edited to reflect this.