In a bold move to uplift his impoverished and crime-ridden country, the President of Honduras’ Congress, Juan Hernández, lead the legislature to officially approve a project that will contract private companies to build self-sustaining charter cities in the Central American country. On September 5, 2012 President Porfirio Lobo signed a memorandum with the business consortium MKG to secure an initial investment of US$15 million and an additional US$4 million from the government of South Korea.

The project will create three autonomous cities, the first in Trujillo in the department of Colón. The cities will operate independently of the national government, establishing their own laws, judicial bodies, governments, and security forces. They will also manage their own foreign trade, subject to international law. An auditing body, appointed by the President, will oversee governance and appoint a mayor for each city.

With the highest murder rate in the world and more that 60 percent of its population living in poverty, Honduras has reason to try unusual measures. Staggering income inequality, as well as violence by large drug cartels and local street gangs loom over a fragile democracy, badly bruised by the 2009 military coup that ousted then-President Manuel Zelaya. All in all, it is a bleak picture for potential investors.

Proponents of the charter cities claim that impervious to the country’s political and social ills, they will lure investors, salvage the frail economy, and cultivate a sense of order and prosperity that will bolster political institutions.

However, the strategy has already ignited concern over questions of national sovereignty. Indigenous groups worry that their territories will be compromised, while other groups fear a return to the 1950s colonial model, when large foreign-owned companies monopolized the country’s resources and wielded undue influence on the government.

Moreover, while charter cities may cultivate economic prosperity, they would also concentrate wealth geographically, fertile ground for even greater inequality. Plus, it is not clear how the income generated by charter cities would benefit Honduras’ political and legal institutions. The project risks creating wealthy havens for investors, while democracy and security crumble around them.

Caitlin Watson
Online Productions Associate