Author of Honduras start-up city project says he is ready to quit

Blow to plan's credibility as NYU professor Paul Romer says he has been unable to act as its guarantor and watchdog

Jonathan Watts

The Guardian

Plans to create a neo-liberal start-up city in Honduras with its own laws, tax rules and police force suffered a setback on Friday when the economic guru who inspired the project said he has been unable to act as its guarantor and watchdog.

Paul Romer, an influential professor at New York University, is seen as crucial to the credibility of the plan, which aims to transform enclaves in the Central American nation into magnets for investors similar to Hong Kong, Shenzhen and Singapore.

But days after the deal was announced, Romer said he had not been given the powers and information necessary to fulfil his role as chairman of the transparency commission, which is meant to ensure governance of the new development zones.

Romer said he and four other international figures were appointed by presidential decree to the commission, which has wide-ranging powers to appoint and fire governors, nominate judges and hire auditors in the proposed new zones. But the five will issue a statement distancing themselves from this week's announcement and calling into question the legality of their appointment, which they say has not been published in the official gazette as required by Honduran law, ostensibly because of a challenge in the constitutional court.

"Thus the conditions have not existed to permit the transparency commission to play the role envisioned for this ambitious and important project," they write in an open letter to President Porfirio Lobo Sosa, to be released online. "As you continue to work to attract foreign investment ... in this period of uncertainty, we feel it would be wise to release you from any sense of obligation to proceed with publication of the decree and thus with our formal appointment."

Romer said he was surprised to hear the announcement this week that the Honduran government had signed a $14m memorandum of understanding with the business consortium NKG.

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