Architect of Honduran privatised cities drops out over lack of transparency

Paul Romer attacks Honduran government over its failure to ensure accountability of the new privately-run cities.

Honduras' plans for "model cities" – entire settlements managed by private corporations – already seem to be settling in to a pattern of secrecy and corruption worthy of the best dystopian futures.

The idea to create the cities – known as Regions Especial de Dessarrollo (Special Development Regions), or REDs – was suggested a year ago, but this month the first deals were signed, with US-based investment group MGK, to build one.

The Financial Times' Ron Buchanan reported (£):

The model cities are to be states within a state, with their own legal and law enforcement agencies, tax and monetary systems – “Hello US dollar”, “Adiós Honduran lempira”, presumably – and every conceivable facility to attract investment.

The concept sounds like a steroid-enhanced vision of a free-market enthusiast. Which it is. The US economist Paul Romer has dreamed up the idea of creating cities, along the lines of Hong Kong and Singapore, which have created poles of dynamic investment that have spilled over into their once impoverished hinterlands.

Even before the real problems began, there was already opposition to the plan. The Independent's Suzy Dean wrote, back in January, that:

What sets the REDs apart from other charter cities is the belief that in order for the cities to thrive they must suspend democracy. The unelected [Transparency] Commission will govern the new city, until they decide the population is ‘ready’ for democracy; only then will new local councils be set up. . .

The establishment of the Transparency Commission reflects the belief of the Honduran government that the public might ‘get it wrong’. The Transparency Committee will not engage with or respond to public demands.

The economist Paul Romer has been the guiding voice behind the plans, and was one of the five people originally slated to be on the Transparency Commission. But yesterday, he sent Marginal Revolution's Tyler Cowen a statement detailing his growing problems with the project. In short, the Transparency Commission has been shuttered, and Romer only even heard about the MGK deal from the press:

From recent newspaper reports, I learned that the Honduran agency responsible for public-private partnerships had signed an agreement about a RED with a private company. When I asked for information, I was told that I could not see this agreement.

This was a departure from the standards of transparency that the administration had led me to expect. It was also a departure from the role for the Transparency Commission outlined in the Constitutional Statute passed by the Honduran Congress.

So the model cities, which were going to have a transparency commission in the place of democratic governance, now have… nothing. Except the corporation that runs them.

Meanwhile, Antonio Trejo Cabrera, a lawyer who had helped to prepare motions declaring the the model cities unconstitutional, was murdered on Sunday, according to the Associated Press:

Antonio Trejo Cabrera, 41, who died early Sunday after being ambushed by gunmen, was a lawyer for three peasant cooperatives in the Bajo Aguan, a fertile farming area plagued by violent conflicts between agrarian organizations and land owners. The most prominent is Dinant Corporation owned by Miguel Facusse, one of Honduras' richest men. Thousands of once-landless workers hold about 12,000 acres (5,000 hectares) of plantations they seized from Dinant.

Trejo, who was shot six times after attending a wedding, reported threats in June 2011, according to documents obtained by The Associated Press, including photocopies of a BlackBerry message he received saying: "Trejo, you dog, you have 48 hours to get out or you're dead." . . .

MGK director Michael Strong said the company is "horrified" by Trejo's killing.

"We believe that Antonio Trejo, had he lived long enough to get to know us, would have concluded that our approach is 100 percent beneficial to Honduras and Hondurans. We are saddened for his family and understand what a tragedy this is for trust and goodwill in Honduras," Strong said in a statement to The Associated Press.

The plans to construct the first RED remain in effect.

A still from the dystopian future of the upcoming film Dredd 3D. Photograph: Lionsgate/Reliance Entertainment

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Theresa May's "clean Brexit" is hard Brexit with better PR

The Prime Minister's objectives point to the hardest of exits from the European Union. 

Theresa May will outline her approach to Britain’s Brexit deal in a much-hyped speech later today, with a 12-point plan for Brexit.

The headlines: her vow that Britain will not be “half in, half out” and border control will come before our membership of the single market.

And the PM will unveil a new flavour of Brexit: not hard, not soft, but “clean” aka hard but with better PR.

“Britain's clean break from EU” is the i’s splash, “My 12-point plan for Brexit” is the Telegraph’s, “We Will Get Clean Break From EU” cheers the Express, “Theresa’s New Free Britain” roars the Mail, “May: We’ll Go It Alone With CLEAN Brexit” is the Metro’s take. The Guardian goes for the somewhat more subdued “May rules out UK staying in single market” as their splash while the Sun opts for “Great Brexpectations”.

You might, at this point, be grappling with a sense of déjà vu. May’s new approach to the Brexit talks is pretty much what you’d expect from what she’s said since getting the keys to Downing Street, as I wrote back in October. Neither of her stated red lines, on border control or freeing British law from the European Court of Justice, can be met without taking Britain out of the single market aka a hard Brexit in old money.

What is new is the language on the customs union, the only area where May has actually been sparing on detail. The speech will make it clear that after Brexit, Britain will want to strike its own trade deals, which means that either an unlikely exemption will be carved out, or, more likely, that the United Kingdom will be out of the European Union, the single market and the customs union.

(As an aside, another good steer about the customs union can be found in today’s row between Boris Johnson and the other foreign ministers of the EU27. He is under fire for vetoing an EU statement in support of a two-state solution, reputedly to curry favour with Donald Trump. It would be strange if Downing Street was shredding decades of British policy on the Middle East to appease the President-Elect if we weren’t going to leave the customs union in order at the end of it.)

But what really matters isn’t what May says today but what happens around Europe over the next few months. Donald Trump’s attacks on the EU and Nato yesterday will increase the incentive on the part of the EU27 to put securing the political project front-and-centre in the Brexit talks, making a good deal for Britain significantly less likely.

Add that to the unforced errors on the part of the British government, like Amber Rudd’s wheeze to compile lists of foreign workers, and the diplomatic situation is not what you would wish to secure the best Brexit deal, to put it mildly.

Clean Brexit? Nah. It’s going to get messy. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.