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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No, IDS, welfare isn't a path to wealth. Quite the opposite, in fact

Far from being a lifestyle choice, welfare is all too often a struggle for survival.

Iain Duncan Smith really is the gift that keeps on giving. You get one bile-filled giftbag of small-minded, hypocritical nastiness and, just when you think it has no more pain to inflict, off comes another ghastly layer of wrapping paper and out oozes some more. He is a game of Pass the Parcel for people who hate humanity.
For reasons beyond current understanding, the Conservative party not only let him have his own department but set him loose on a stage at their conference, despite the fact that there was both a microphone and an audience and that people might hear and report on what he was going to say. It’s almost like they don’t care that the man in charge of the benefits system displays a fundamental - and, dare I say, deliberate - misunderstanding of what that system is for.
IDS took to the stage to tell the disabled people of Britain - or as he likes to think of us, the not “normal” people of Britain -  “We won’t lift you out of poverty by simply transferring taxpayers’ money to you. With our help, you’ll work your way out of poverty.” It really is fascinating that he was allowed to make such an important speech on Opposite Day.
Iain Duncan Smith is a man possessed by the concept of work. That’s why he put in so many hours and Universal Credit was such a roaring success. Work, when available and suitable and accessible, is a wonderful thing, but for those unable to access it, the welfare system is a crucial safety net that keeps them from becoming totally impoverished.
Benefits absolutely should be the route out of poverty. They are the essential buffer between people and penury. Iain Duncan Smith speaks as though there is a weekly rollover on them, building and building until claimants can skip into the kind of mansion he lives in. They are not that. They are a small stipend to keep body and soul together.
Benefits shouldn’t be a route to wealth and DWP cuts have ensured that, but the notion that we should leave people in poverty astounds me. The people who rely on benefits don’t see it as a quick buck, an easy income. We cannot be the kind of society who is content to leave people destitute because they are unable to work, through long-term illness or short-term job-seeking. Without benefits, people are literally starving. People don’t go to food banks because Waitrose are out of asparagus. They go because the government has snipped away at their benefits until they have become too poor to feed themselves.
The utter hypocrisy of telling disabled people to work themselves out of poverty while cutting Access to Work is so audacious as to be almost impressive. IDS suggests that suitable jobs for disabled workers are constantly popping out of the ground like daisies, despite the fact that his own government closed 36 Remploy factories. If he wants people to work their way out of poverty, he has make it very easy to find that work.
His speech was riddled with odious little snippets digging at those who rely on his department. No one is “simply transferring taxpayers’ money” to claimants, as though every Friday he sits down with his card reader to do some online banking, sneaking into people’s accounts and spiriting their cash away to the scrounging masses. Anyone who has come within ten feet of claiming benefits knows it is far from a simple process.
He is incredulous that if a doctor says you are too sick to work, you get signed off work, as though doctors are untrained apes that somehow gained access to a pen. This is only the latest absurd episode in DWP’s ongoing deep mistrust of the medical profession, whose knowledge of their own patients is often ignored in favour of a brief assessment by an outside agency. IDS implies it is yes-no question that GPs ask; you’re either well enough to work or signed off indefinitely to leech from the state. This is simply not true. GPs can recommend their patients for differing approaches for remaining in work, be it a phased return or adapted circumstances and they do tend to have the advantage over the DWP’s agency of having actually met their patient before.
I have read enough stories of the callous ineptitude of sanctions and cuts starving the people we are meant to be protecting. A robust welfare system is the sign of a society that cares for those in need. We need to provide accessible, suitable jobs for those who can work and accessible, suitable benefits for those who can’t. That truly would be a gift that keeps giving.