[BRIEF NOTE] On Canada's charter city in Honduras

[rfmcdonald]

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/how-charter-cities-could-lift-the-global-economy/article2414535/
Marginal Revolution's Alex Tabarrok let me know that friendly if distant Canadian-Honduran relations have just become more intense: Canada is now exercising something like sovereignty over a community in Honduras, as economist Paul Romer and Honduras politician Octavio Sanchez wrote in The Globe and Mail.

Many people from around the world would like access to the security and opportunity that Canadian governance makes possible. According to Gallup, the number of adults worldwide who would move permanently to Canada if given the chance is about 45 million. Although Canada can’t accommodate everyone who’d like to move here, it can help to bring stronger governance to many new places that could accept millions of new residents. The RED in Honduras is the place to start.

[. . .]

Canadians are increasingly aware of the limits of traditional aid but remain committed to the principle that supporting international development is not only in Canada’s national interest but is the right thing to do. Recent trade agreements with Peru, Colombia, Panama and Honduras demonstrate that Latin America remains high on Canada’s development agenda.

The RED offers a new way to think about development assistance, one that, like trade, relies on mutually beneficial exchange rather than charity. It’s an effort to build on the success of existing special zones based around the export-processing maquila industry. These zones have expanded employment in areas such as garments and textiles, with substantial investment from Canadian firms such as Gildan, but they haven’t brought the improved legal protections needed to attract higher-skilled jobs. By setting up the rule of law, the RED can open up new opportunities for Canadian firms to expand manufacturing operations and invest in urban infrastructure.

By participating in RED governance, Canada can make the new city a more attractive place for would-be residents and investors. It can help immediately by appointing a representative to a commission that has the power to ensure that RED leadership remains transparent and accountable. It also can assist by training police officers.

The courts in the RED will be independent from those in the rest of Honduras. The Mauritian Supreme Court has agreed in principle to serve as a court of final appeal for the RED, but Canada can play a strong complementary role. Because the RED can appoint judges from foreign jurisdictions, Canadian justices could hear RED cases from Canada and help train local jurists.

Oversight, policing and jurisprudence are just a few of the ways in which Canada can help. Effective public involvement will also be required in education, health care, environmental management and tax administration. Such co-operation can be based on a fee-for-service arrangement in which the RED pays Canada using gains in the value of the land in the new reform zone.

Wikipedia's Spanish-language Región especial de desarrollo, "special development region", goes into more detail, translated into English below.

"Special development region" is the official name of an administrative division urban Honduras (colloquially called model city) subject to the national government and provided a high level of autonomy with a separate political and judicial system, and under an economic system theory based on free market capitalism. [The project involves the creation of several cities in these regions with the hope of attracting investment and creating jobs in those areas. Each region has its representative special executive or governor and will have its own laws (or constitutional status), people must voluntarily enter into this system. The Law of Special Development Regions articulates the relationship between the constitutional status of each region special and the sovereignty of Honduras.

These special areas are the application of so-called charter cities or towns have as a reference model and the experience of China's special administrative regions (mainly the case of Hong Kong and how it served as a model city as special economic zones Shenzhen) and other countries of East Asia and Southeast Asia such as South Korea and Singapore.

The constitutional provisions that establish special development regions were raised in late 2010 and early 2011 during the government of President Porfirio Lobo, who gave official backing to economic development proposals of American economist Paul Romer who promotes the benefits of creating charter cities or towns in territories uninhabited model, with clear and stable rules (legal certainty) and open doors to capital and immigration.

I don't know what to think of this. It's the first time I've heard anything about Canada's involvement in this concept anywhere. The Canadian government hasn't replied, so far as I've heard, but this might be the sort of idea the Conservative government would go for.

People, what say you?