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On the market: Roatán Prospera’s planned residential units have already started to sell


autonomy as Roatán Prospera but theirmarkets differ. Roatán Prospera will cater to affluent residents and spark a high value-added econ- omy based on tourism and services such as healthcare and education, while Zede Morazán plans to offer a better environment for manu- facturing companies and blue collar workers already active in the area. Proposed by Centroamerican Consulting and


Capital (3C), Zede Morazán plans to attract some 7000 residents and develop industrial land to accommodate the production of medical equip- ment, personal protection equipment, and pos- sibly pharmaceuticals.Budgeted investmentis in the order of $100m, says 3C founder and CEO Massimo Mazzone.Works are scheduled to break ground by the end of 2020. “The Zede legislation is one of the most


advanced of its kind in the whole world,” Mr Mazzone says. “The idea of such an advanced lawin a country likeHonduras has always stirred scepticism. I was also sceptical, but now [have started] believing in it as permitscomethrough.”


Proof of concept Besides its development dividend, the Zede pro- grammealso has a strong ideological element. The Committee for the Adoption of Best


Practices (Camp), the state authority in charge of approving the establishment of new Zedes, aswell as vetting its technical secretary, include free-market intellectual Richard Rahn, a former Cato Institute fellow; tax-reform advocate Grover Norquist; and Barbara Kolm from the Austrian Economics Centre. “We are looking for good governance, not


anarcho-capitalism,” says Camp secretary Carlos Pineda. “We all agree the state should not play such a big role in the life of people. It has to facilitate their life, not weigh it down.” For Zedes to demonstrate that alternative,


autonomous governance models are feasible is as important to their promoters as economic


August/September 2020 www.fDiIntelligence.com


success, particularly with regards to sparking an upgrade in governance beyond their own borders. “It’s like injecting the economy with a vac-


cine, hoping that it can expand to the rest of the country,” Mr Pineda says. “Ideally, one day Zedes will cease to exist because through their success they push the rest of the country to be governed and administered in the sameway.”


Possibledownside Not everyone agrees. José Luis Palma Herrera, a researcher at the National Autonomous University ofHonduras, highlighted the risk that traditionally weak Honduran institutions will never catch up, and will lose any leverage over flourishing business enclaves. It happened in the past, and it might happen again, he wrote in a 2020 paper. “Looking at all the enclaves that existed in


the Republican era since 1846, private conces- sions constantly generated parallel governments in regions where the national government can- not do anything to prevent developments that don’t bring any benefit to the country.” However, Mr Brimen says other such experi-


ments elsewhere in the world eventually lifted governance standards across the whole country. “What happens in the surrounding areas is


that everybody ups their game,” he says. “This is what happened in the surrounding areas of Singapore, with Malaysia being the prime example. This iswhat happened in Shenzhenas a result of Hong Kong’s success. Surrounding areas tend to be better off through a competi- tive dimension.” Zedes have put Honduras at the cutting


edge of economic development reforms. The success of its initiatives will determine whether the country can really set a blueprint for other such zones to spring up across the region – or whether they will become just another story of failed reforms.■


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