Honduran charter cities trample on democracy

Suzy Dean

136089139 300x199 Honduran charter cities trample on democracy

A worrying development in Honduras echoes anti-democratic trends in Italy and Greece, whereby technocracy is usurping popular rule.

Honduras has long been one of the poorest countries in the western hemisphere. A year ago, the National Party, with support from the opposition Liberal Party, decided to form the Región Especial de Desarrollo (RED), or Special Development Region. These would encourage domestic and foreign investment, and in turn jobs, homes and an environment in which the public will be able to enjoy a better standard of living.

Last month, President Lobo of Honduras established a Transparency Commission of five experts and “influential supporters in the broad community of people concerned with economic development”. This Commission will act as the guardian body of the proposed new cities, and is tasked primarily with establishing a procedure for receiving and reviewing development proposals from would-be investors, as well as ensuring that business dealings related to the RED remain open, competitive, and free of corruption.

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 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 logic goes that if a city can be built in an economically underdeveloped country, but with highly-developed rules and governance, then citizens can then choose to live there – and live better for opting to do so. So goes the thesis of Paul Romer, economist and architect of RED.

This suspension of democracy is worrying for three key reasons.

The justification for the postponement of democracy is that the Transparency Committee will avoid the pitfall of corruption which exists at every level of public life. From civil servants to judges, the perception is that everybody in Honduras has their price and so cannot be trusted to build and manage a new city. But honest or not, by making the Committee a permanent body outside of any elective process, the public are stuck with officials regardless of how they govern. And who is to say the people would prefer to be governed by supposedly whiter-than-white politicians who do not represent them, than someone a little shadier who would prioritise their interests?

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. Romer wanted RED to go even further. He wanted the rules of the city to be drawn up by foreign companies and bodies rather than a body with a relationship to the Honduran government. It seems that in Romer’s view, the further removed from the public that politicians are, the better policy-making will be.

The suspension of democracy is ultimately problematic because it is a prerequisite to a functioning society, not a barrier. As a new city is built, debates will need to be had over housing, education, healthcare, wages and public space – issues that are always fundamentally contested. If the public are shut out from determining the kind of society they want to live in, then far from the RED creating opportunity – in which people can determine their environment – they will be subjects. People are likely to be less free to live as they choose than they currently are. Without a democratic framework through with to argue for what matters to them, and thusly depose of useless politicians and manage the role of the state, the REDs will be little more than open prisons.

This undemocratic approach to development is of course not unique to Honduras. The recent effective suspension of popular sovereignty in Italy and Greece is a case in point. The global elites’ vision of a functioning government today is not based on achieving popular consent, but on how quickly it is able to enforce the will of experts and unelected officials. Elected politicians in Mediterranean countries have been replaced by bankers and other technocrats. So it is with the Transparency Commission which includes George Akerlof, another expert economist and Nancy Birdsall, formerly of the Inter-American Development Bank, and now running the Centre for Global Development. None of the above has ever faced election, but rather draw authority from their disciplines that have led them to believe – and fellow elites to believe – they have the ‘right’ answers. Politics and debate come a poor second to these individuals supposed expertise.

The people of Honduras, like Europeans, deserve better, and that means proper democracy, whatever the experts say.

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  • Kieran Hunter

    Good points, I agree strongly with this. Citizens are far more than consumers and should play a fundamental role in shaping of cities where they live. The move towards greater technocracy – in Europe and elsewhere – should concern us all.

  • allanhenderson

    The goal of competitive governance is not to create one charter city, or even a handful of them, but to create a competitive marketplace of hundreds, perhaps thousands of charter cities, all of which are ruthlessly competing with one another to attract paying residents by trying to produce public goods of a higher quality, or at a lower price, than do their competitors. This unforgiving survival of the fittest, to use Herbert Spencer’s phrase, is the miraculous engine which has pulled humanity to prosperity. And what is most remarkable about this is not simply that the goods we obtain today on the marketplace are blessed with a quality and abundance that would have been unimaginable to someone born a few hundred years ago, as, indeed, they are. It is that most of them would have been unimaginable to such a person altogether.

    The continent-sized country clubs that are now known as the leading democracies will continue to dispatch their uniformed thugs to attack any brown person who has been inconsiderate enough to present himself within their borders, while Presidents and Prime Ministers orate panegyrics on the moral excellence of the democratic state. But here on the ground, we will be turning the page of history. When our cities open their golden doors to the world, billions of people whose lives are now crippled by poverty and violence will pack their bags and walk through the multicolored gates of places like Google City: places where all the services that today’s most successful states now provide to their residents are delivered at a higher quality and lower price than ever before; places whose residents enjoy the advantages of new city services that we can no more imagine than a peasant of the sixteenth century could imagine smartphones or medical imaging.

    Neither you nor I knows how to bring excellent governance to all the world’s people; the goodwill of Western elites is no match for the cold guns and even colder interests of the men who obstinately stand in their way. But by building scores of new cities and yoking their administrators to the discipline of the marketplace, we can bring all the world’s people to excellent governance.

  • Suzy Dean

    In both cases you have so called experts come into positions of power without a vote by the people for their leadership. Across the board we see expert economists etc ushered into positions where they are taking key decisions without having convinced the public of their strategy. In both situations we can see that technocracy has trumped politics

  • Suzy Dean

    It’s interesting that you connect the Honduran situation with China. I actually think they are taking their lead more from Europe; the Commission is drawn from the same pool of western global elites. In many ways the Commission can be seen to reflect EU structures in that they feel ‘experts’ can govern best. This is different from China where it is not so much about expertise as connections within the party. 

  • Amol Agrawal

    An interesting perspective on charter cities. The idea comes from the core thought of Romer’s growth theory – He says: 
    Economic growth occurs whenever people take resources and rearrange them in ways that are more valuable. A useful metaphor for production in an economy comes from the kitchen. To create valuable final products, we mix inexpensive ingredients together according to a recipe. Human history teaches us, however, that economic growth springs from better recipes, not just from more cooking. Romer now seems to be applying this thought on a bigger scale and saying how can we organise the country’s resources better? Most economists tend to look at macroeconomic policies etc for this. But guys like Edward Galesar and now Romer point what also matters is the living conditions and urban spaces in the country. And most developing and under-developed economies do not have cities in which people can come together, innovate, collaborate and grow…

    Given this background, how should one develop new cities? He has now gone to examples of HongKong to show what is needed is a charter city. Give development rights to someone more credible which will get more investment and lead to development. 

    This has led to criticism of colonialism and now your critique of it being un-democratic which is worth a thought. I frankly did not think a charter city would start so soon despite Romer’s great intellectual credibility. More debates were needed for sure on the mechanics of it. 

    There are alternatives to building new cities as shown by Gujarat (a state in India). A new city called GIFT city is coming up based on Public Private Partnership and supported by the state government. There is foreign partnership but nothing like the charter concept floated by Romer. 

    Being from  a developing economy, I am fully for new thriving cities as there are very few options in these countries. This is even truer for India where population levels in cities are more than population of few countries!! What mode is taken for developing new cities is worth a good discussion. 

  • Guillermo Peña P.

    The Transparency Commission will not be “calling the shots”, master developers with sign a contract with the Governor, this contract will be approved or disapproved by the TC.  The TC is not involved in any day-to-day activities, does not have a budget and cannot set or impose any taxes, create laws, or even direct education, health, pensions or any other service in the SDR.  

    Here are the list of powers for the TC, Governor and Normative Council as stated in the SDR Statute:
    Article 28.- The Transparency Commission shall have the following powers:
    Appoint and replace the governors of the SDR’s.
    Approve or disapprove of the actions and / or conduct of the SDR’s governors.
    Appoint and remove members of the Audit Committee.
    Appoint an ad-hoc commission responsible for developing a list of persons recommended for the post of judge or magistrate in the courts of the SDR’s.
    Fill their own vacancies in accordance with the regulations set forth by the Transparency Commission.
    All other powers conferred by this Constitutional Statute. 

    Article 32.- The Governor of an SDR exercise the following functions:
    Direct the management and governance of the SDR;
    Be responsible for the implementation of the rules of the SDR under this Constitutional Statute;
    Suggest to the Normative Council measures that help ensure compliance with the purposes of the SDR;
    Ratify or veto legislation approved by the Normative Council and promulgate said legislation;
    Appoint one or more deputy governors and ad-hoc secretaries that will aid in the management of the SDR;
    Issue temporary acts in the form of ordinances to ensure the efficient delivery of public services within the SDR and to promote competition in certain markets;
    Sign the budget approved by the Normative Council of the SDR; and, Present an annual report on the use of the budget and achievements of the SDR to the National Congress, the Transparency Commission and the Normative Council. 
    Article 34.- The Normative Councils are responsible for approving the laws applicable in the SDR’s. Exempted from this provision are those laws that require approval by National Congress in conformity with this Constitutional Statute. There will be a Normative Council for each of the SDR.
    The Normative Councils shall advise the governor on the implementation of public policies chosen from the best international practices.
    Article 35.- The Normative Councils will be composed of permanent residents of the SDR’s. Permanent residents of the SDR’s that are not of Honduran nationality are also eligible to be elected members of the Normative Councils as well as be eligible to hold the position of deputy governor for the SDR’s in which they reside.

    Article 36.- The formation of the SDR’s Normative Councils will be through free elections. The Normative Council will be integrated taking into account the situation of the SDR in accordance with the principle of gradual and orderly progress. The ultimate goal is that all members of the Normative Council be elected through universal suffrage.

    Article 39.- Each of the SDR’s Normative Councils has the following powers:
    To enact, amend, interpret or repeal laws issued in accordance with the provisions of this Constitutional Statute;
    Incorporate by reference the international standards deemed appropriate for
    achieving its goals;
    Review and approve the budget of the SDR;
    Determine the tax scheme of the SDR;
    Determine the services or industries that should be regulated to ensure their effectiveness or the existence of a competitive market, when such is not expressly stated in this Constitutional Statute;
    Approve and modify the internal organization of the SDR;
    Discuss topics of public interest and establish a system of consultations through electronic means to the public on topics of general interest;
    Receive and address complaints from residents against the government of the SDR; and,
    Subpoena people to be witnesses in their investigation. 

    If you would like an English version of the Statute please let me know, I can also direct you to the Honduran authors of this document for any further inquiries you might have.

    Thank you for the opportunity to discuss this project and for your legit interest in the functioning of the SDRs-

  • Guillermo Peña P.

    Mr. Henderson,
    I have noticed your comments on different blogs and articles in the past months, please contact me at  . Your input will be greatly appreciated.

  • Luis de la Orden Morais

    I wonder if the system of electing people to occupy a government position without proper qualifications and professional experience and where they will trade influence, rip-off public funds and escape scots-free as practiced in most so-called “democratic” states, as in my South American country, should ever be called “Democracy”. 

    Voting and elections have become some kind of cynical box-checking practice to turn political mafias into established “democratic cabinets”. Democracy as practiced in our shores for centuries now is not more than a process to legitimise dictators into power and allowing for the other dictators in waiting to have a go after a few years. In these terms Democracy has brought us poverty, misery and the institutionalisation of injustice and social inequalities whilst providing a way for a handful of families to maintain their power. We never had democracy as such, we have elections but we have no democracy and as a result no peace.
    We live in a political scenario where for a city to receive public funding, the city mayor has to be aligned with the state governor, and the state governor politically aligned with the federal government. If the whole chain doesn’t belong to the same party, the odd one out is screwed for the term they will linger in office with no support and under constant political sabotage, that is how good south american politicians are assassinated nowadays.

    Unless one is a “democratic fundamentalist” who believes misery and corruption is a fair price to pay for democracy, Charter Cities give their inhabitants the best choice they can have, the choice to kick hereditary politicians out of government or better not even let them in in first place. 

    I believe the idea is ingenious from the perspective that puts the outcome of our own decisions on our hands. That, in my opinion, is more democratic than most democratic regimes in the South, Central and North American continents.

    It is either this or the ineffective and bloody tides of revolution to extract all those political clowns who turn democracy into the circus we have to live in but then it doesn’t take a long time for the revolutionaries to become the clowns themselves. When God becomes overrated atheism takes over but what takes over when democracy becomes vilified by our own elected officials and we have no control on them? Charter Cities are the last chance for democracy where democracy has become a cynical joke, and because I am for democracy I am for the existence of Charter Cities.

    Still not happy? Put international pressure on the clowns and their mobs who run “democracies” around the world, give them a hard time, set rules for all government members and make them adhere with harsh penalties for those who break the rules, create embargos for corruption not just terrorism, send elected politicians of any country to the Hague for misuse of public funds of any considerable amount and for political incompetence not only for genocide, war crimes and gross human rights infringements otherwise leave us alone in the cities we are going to build for ourselves or as the Brazilian poet Manuel Bandeira once said:

    I’m leaving for PasargadaThere, I am the king’s friendHave the woman I wantIn the bed that I chooseI’m leaving for Pasargada


    that is how it should be. The people obviously have no idea how to govern themselves, and that is why we have the mess in Honduras to start with , we need new ways.

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