Friday, September 7, 2012

Honduras to build new city with its own laws and tax system to attract investors

Latin America correspondent 
The Guardiaia
Honduras is set to host one of the world's most radical neo-liberal economic experiments under a plan to build from scratch the rules, roads and rafters of a "charter city" for foreign investors.
The Central American nation hopes the plan for model development zones, which will have their own laws, tax system, judiciary and police, will emulate the economic success of city states such as Singapore and Hong Kong.
But even as the government signed a "memorandum of understanding" with a group of international investors on Tuesday, opponents tried to lodge a suit at the supreme court for the arrangement to be declared illegal because the "state within a state" risked undermining national laws, sidestepping labour rights, worsening inequality and creating a modern-day enclave that impinged upon the territory of indigenous groups.
The Honduran president, Porfirio Lobo – a landowner from the rightwing National party – has given his full backing to the plan, which was inspired by US economic advisers.
During the signing ceremony, government officials said the initial $14m phase of the project would start in October and create 5,000 jobs in the first six months and 40 times that number in the future – a major incentive in a country where one in four of the workforce are unemployed.
"This is the most important project in half a century for Honduras," said Carlos Pineda, head of the Commission for the Promotion of Public-Private Partnerships, which represented the government at the signing of a memorandum of understanding with the business consortium NKG.
Details of the arrangement remain sketchy. Three possible locations were mentioned – Sula valley, Agalta valley and the southern region of Honduras – and the initial investments seemed small compared to the scale of the ambition.
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