After a contentious public process, Economic Development and Employment Zones (ZEDEs, for their acronym in Spanish) were granted legal approval in Honduras in September 2013. But progress on the controversial new developments, promoted as so-called “model cities,” has been sluggish — until now, as the country heads toward a general election this November. After several failed attempts to develop ZEDEs in Amapala, a municipality in the southern part of the country, in Choloma, just north of San Pedro Sula, and in other areas along the Carribean coast, it appears that the proposals are gaining serious traction. In March, protests erupted in Crawfish Rock, on the island of Roatán, against Roatán Próspera, a ZEDE being developed by a consortium of international investors (Honduras Próspera) without any prior consultations with local authorities or the community.
Previously, in April 2019, rumors had spread of the construction of a ZEDE known as Ciudad Morazán, in Choloma, Cortés Department, but it wasn’t until October 2020 that it was revealed that the development already had about US$90 million invested in the purchase of land, housing, and office buildings.
The identities of the investors behind Roatán Próspera and Ciudad Morazán remain a mystery, but it is likely that both are being backed by the same interests. And who do you think would invest in projects that face widespread criticism from businessmen, politicians, religious leaders, academics, unionists, and social activists?
Complaints against the ZEDEs have come from every sector of Honduran society, with the notable exception of those who remain loyal to President Juan Orlando Hernández (JOH) and continue to defend his agenda.
Some analysts suspect that the investors behind these developments are likely to be the President and his inner circle. The speculation is not that far-fetched. JOH and his affiliates are certainly not lacking in financial resources, considering that the past three administrations — the cachureca, or “crooked” governments, as the nationalists are known — have faced widespread accusations of corruption and ties to drug trafficking organizations.
The origins of the ZEDEs
It all began when JOH was president of the National Congress. His idea was to create model cities based on previous similar experiments in other parts of the world. News of the initiatives first began to surface in 2011.
The concept behind the ZEDEs is based on the idea of “charter cities” developed by U.S. economist Paul Romer, a professor at New York University who would later become the Chief Economist of the World Bank. But Romer, who at first supported Hernández’s initiative and even served as an advisor to the project, eventually distanced himself from the idea, due to disagreements about its direction.
In 2012, after ruling against the first model city proposal, four of the five members of the Constitutional Chamber of the Honduran Supreme Court (CSJ) were removed by Congress. The justification was that the judges had opposed JOH’s purge of the national police forces, or “depuración policial,” another of the president’s controversial moves. The only judge not removed by Congress was magistrate Oscar Fernando Chinchilla Banegas, who had voted in favor of the initiative. As a reward for his loyalty, Chinchilla was appointed Attorney General and has now served two terms.
Sanctuaries for the Corrupt?
There are growing speculations that the ZEDEs may serve as sanctuaries, at least temporary ones, for current government officials attempting to escape justice once a new administration, even another “crooked” one, takes power. Not only do officials face potential prosecution from an incoming administration — they also risk being subpoenaed by the U.S. Department of Justice for their alleged ties to drug cartels.
Recently, the Supreme Court of Justice (CSJ) approved special legal jurisdictions for the ZEDEs, with their own court systems and judges, but, according to the resolution, still “subject to the Political Constitution of the Republic.” According to the webpage for the Honduran Ministry of Economic Development, the ZEDEs will remain part of the national territory, but will be subject to a “special regime” in which investors will control fiscal policy, security, and other areas of governance.
Thus, according to the law, the ZEDEs “must establish their own internal security agencies [...] including their own police, as well as agencies tasked with criminal investigation, intelligence, prosecution, and developing a penitentiary system.”
Voices in Opposition
Confronted with the development of two ZEDEs and the possibility of more to come, the reaction among Hondurans has been one of near unanimous outrage. Powerful business organizations, from the Honduran Council of Private Enterprise (COHEP) to the Chambers of Commerce and Industry in Tegucigalpa and in San Pedro Sula (the most powerful in the country), have spoken out, voicing strong and well-founded arguments against the proposals.
Likewise, the Catholic Church, under the leadership of a cardenal aligned both by blood and by ideology with the ruling party (Partido Nacional), along with the Honduran Fraternity of Evangelical Churches (Confraternidad Evangélica de Honduras, or CEH), whose pastors have been strong supporters of the president for years, have both come out against the ZEDEs, though each for slightly different reasons. In addition, numerous municipalities have convened cabildos abiertos, or town halls, which are constitutional processes that permit communities to voice opinions and make decisions on issues that impact life in their jurisdictions. All of these communities have declared themselves “ZEDE-free territories.”
In the eyes of the government, however, the only valid opinions are those promoted by the president and officials in his administration. And as we approach the upcoming general elections, which are expected to be contentious, lacking in transparency, and plagued by more fraud, the ZEDEs have become yet another focal point of conflict.
Dardo Justino Rodríguez is an analyst, reporter, and independent consultant for various international bodies and organizations. He is the national director of Presagio Consulting Honduras. This column was originally published by Latinoamerica 21, a multimedia newsroom dedicated to sharing accurate and critical information about Latin America.
*Translated by Max Granger