Creating a new city from scratch (with Erick Brimen)
Feb 5, 2025
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Erick Brimen, CEO of NeWay Capital and Honduras Próspera, shares insights into the creation of new cities in Honduras as special economic zones. He discusses the potential of private company governance to enhance economic growth while exploring the delicate balance between regulation and personal freedoms. The conversation highlights how innovative legal frameworks can attract investors and improve living standards. Erick also addresses public pushback and the implications of governance on urban development, revealing a blueprint for future city planning.
The development of a new city in Honduras serves as a strategic response to global prosperity needs by establishing a special economic zone (ZEDE) that fosters competitive economic growth.
This innovative governance model optimizes legal and regulatory frameworks, enabling tailored rules that promote efficiency, innovation, and adaptiveness for businesses operating within the zone.
Despite prevalent crime in Honduras, the unique location on Roatan provides a safe environment driven by tourism, facilitating a secure community for residents and investors.
Deep dives
The Vision Behind Creating a New City
A new city is being developed as a response to the global need for prosperous living spaces, starting with Honduras. By implementing a clean slate approach, this project allows for rethinking physical infrastructure and governance models, creating a unique and competitive environment for economic growth. The establishment of a special economic zone, or ZEDES, paves the way for unprecedented regulatory flexibility that encourages innovation, lower costs, and foreign investment. This strategy aims to foster a vibrant atmosphere for human progress, driving productivity and overall prosperity.
Governance Models That Promote Innovation
The innovative governance model of the new city aims to optimize the legal and regulatory frameworks for better economic activity. By allowing a rewrite of traditional governance layers, this model emphasizes creating rules that are tailored to specific needs within the special zone. This foresight in governance is essential for minimizing operational costs and enabling quick adaptation for businesses. The focus is not just on physical settings but also on shaping a legal environment that enhances opportunities for innovation and economic success.
Addressing Safety Concerns in Honduras
Despite concerns about crime in Honduras, the chosen location on the Caribbean island of Roatan boasts a relatively safe environment, mainly due to its reliance on tourism. Operators understand the importance of maintaining safety to protect their livelihoods, creating a community focused on security. While Honduras struggles with crime overall, the new city can leverage its unique geography to attract people and businesses looking for a secure haven. Thus, the project showcases an example of how specific local conditions can foster growth in challenging national contexts.
Profit Motives in Governance
The operational leadership of the city is uniquely structured around a private company while retaining public governance to ensure alignment of incentives. This model encourages efficiency and productivity, allowing the private operator to benefit directly from its success, promoting investments and innovative industries. By optimizing public policies to attract foreign investments, the governance structure ensures a more vibrant economic landscape. The proposal reveals how this synergy can yield benefits for all parties involved, aligning governmental revenue needs with economic growth.
Future Innovations in Governance Models
The vision for the future includes scaling similar governance models in various countries, enhancing the global landscape of competition in governance. By fostering small, innovative jurisdictions that focus on profit motives, the project aims to break monopolistic structures currently present in many regions. The belief is that successfully combining private sector efficiency with public oversight can lead to improved governance worldwide. Ultimately, the objective is to demonstrate that achieving widespread human prosperity is both a commendable goal and a financially viable one.
What does it take to start a new city, especially one designed to be a special economic zone (SEZ)? What are the advantages and disadvantages to having a private company as manager of a city? Should governments be profit-maximizing? Can people choose to live in one of the Zonas de Empleo y Desarrollo Económico (ZEDE) cities in Honduras while also opting out of its specific government services? What are some legitimate reasons governments should regulate businesses? Are medicines produced in SEZs safe? How do ZEDE investors make money? To what extent can (or should) a SEZ's laws override state and federal laws? What do the ZEDEs in Honduras look like right now? How many people live in them? Why has there been pushback against them? Are SEZs considered "political" projects? Can a SEZ take land from private owners? Is anyone allowed to move into a SEZ?
Erick Brimen is a finance professional, team leader, and serial entrepreneur who is passionate about investing in life-enhancing opportunities that further human flourishing. He has led Honduras Próspera Inc.'s ongoing development of the Próspera ZEDE free zone in Honduras, raising nearly $110 million to advance his vision of eliminating poverty through delivering free market governance as a service. Erick started his career in private banking, working at Brown Brothers Harriman & Co. He later moved to investment banking as a mergers and acquisition sell-side advisor for AG Edwards & Sons (now Wells Fargo). After investment banking, Erick joined Ernst & Young's London consulting practice, where he advised buy-side private equity clients as they considered acquisition targets. Soon after, he was recruited by the Borealis Group to join as CFO of Latin American operations, leading the creation of multiple business units. When the time was right, Erick started his entrepreneurial career in the world of financial intermediation as a founder of ComparaMejor.com. In late 2013, Erick sold another of his tech companies to start NeWay Capital. NeWay Capital LLC is globally-focused and seeks to identify free zone opportunities with partner host countries throughout the world. As Chairman and CEO of NeWay Capital LLC's affiliate Honduras Próspera Inc., Erick is focused on replicating the success of Dubai, Hong Kong, and Singapore in a Honduran free zone located primarily on the beautiful island of Roatán. He has three young children with his wife, Colleen Brimen. He was born Venezuelan and is a U.S. Citizen by choice. Learn more about him at his website, erickbrimen.com.