The Sunday Read: ‘The For-Profit City That Might Come Crashing Down’
Sep 15, 2024
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In this engaging discussion, Rachel Corbett, a New York Times Magazine contributor, and Jorge Colindres, the technical secretary of the private city Prospera, explore the complexities of this innovative yet controversial project in Honduras. They reveal the city's ambitious aims to attract foreign investment through minimal regulation while grappling with opposition from local communities. The conversation highlights the stark socio-economic disparities, political tensions, and the deeper implications of privatization as a solution to economic challenges, creating a vivid picture of this unique urban experiment.
Private cities like Prospera facilitate an investor-friendly environment with minimal regulation, prompting debates over governance and local autonomy.
The legal struggles faced by Prospera highlight the tension between private enterprise growth and the national interests of host countries.
Deep dives
The Concept of Private Cities
Private cities are designed to provide a living and working environment governed primarily by corporate interests, offering amenities like private schools, security, and infrastructure in exchange for fees. Unlike traditional cities, these zones have their own quasi-governance structures that cater to foreign investors who seek to bypass local regulations and taxes. The emergence of private cities follows historical precedents seen in places like Shenzhen and Singapore, but their proliferation has somewhat escalated into a broader movement, with approximately 30 such cities emerging globally. This model raises significant concerns regarding sovereignty, oversight, and the nature of governance itself, often clashing with local governments and communities.
Prospera: The Controversial Private City
Prospera, a private city on an island off Honduras, represents one of the most advanced implementations of this concept, supported by notable Silicon Valley investors. It offers a unique regulatory environment where businesses can operate without the same legal constraints imposed by the Honduran government, including health standards and labor regulations. However, the city is embroiled in legal disputes, including a lawsuit against the Honduran government for $11 billion, stemming from attempts by the local administration to revoke the constitutional amendment that allows Prospera to operate. This conflict exemplifies the tensions between private enterprise ambitions and national interests, highlighting the potential implications for both local inhabitants and international investments.
Life Within Prospera
Access to Prospera requires becoming a resident, a process facilitated by simple forms and fees intended to minimize bureaucratic hurdles. Once inside, visitors observe a stark contrast between the manicured, corporate environment of Prospera and the surrounding impoverished communities like Crawfish Rock. The city's infrastructure boasts modern buildings and experimental businesses, such as medical facilities conducting clinical trials unhindered by FDA standards, showcasing a rapid development model. Despite this appealing setup, underlying issues, including accountability for labor practices and environmental impacts, raise concerns about the ethical ramifications of privatized governance.
Prospera's Future and Challenges
The future of Prospera hangs in a precarious balance due to increasing opposition from the Honduran government and public sentiment against foreign investment models that threaten local autonomy. Political shifts, driven by public distrust linked to previous corrupt administrations, have culminated in a constitutional reform aimed at repealing existing frameworks for such private cities. If Prospera succeeds in its massive lawsuit against the Honduran government, it could set a legal precedent for similar cities worldwide; however, a loss might deter future investments in startup cities. The ongoing struggle illustrates broader debates about governance, economic development, and property rights, as corporate interests face significant scrutiny from both local and international stakeholders.
If Próspera were a normal town, Jorge Colindres, a freshly cologned and shaven lawyer, would be considered its mayor. His title here is “technical secretary.” Looking out over a clearing in the trees in February, he pointed to the small office complex where he works collecting taxes and managing public finances for the city’s 2,000 or so physical residents and e-residents, many of whom have paid a fee for the option of living in Próspera, on the Honduran island of Roatán, or remotely incorporating a business there.
Nearby is a manufacturing plant that is slated to build modular houses along the coast. About a mile in the other direction are some of the city’s businesses: a Bitcoin cafe and education center, a genetics clinic, a scuba shop. A delivery service for food and medical supplies will deploy its drones from this rooftop.
Próspera was built in a semiautonomous jurisdiction known as a ZEDE (a Spanish acronym for Zone for Employment and Economic Development). It is a private, for-profit city, with its own government that courts foreign investors through low taxes and light regulation. Now, the Honduran government wants it gone.
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