Global Economy
Honduras envisions a Caribbean Hong Kong, but 'charter city' plan meets criticism
Countries: Honduras
Previously filed under: Global Economy

Picture this: a nearly independent city-state -- a Hong Kong in one of the western hemisphere’s poorest countries. Sound far-fetched? Maybe so, but one country has high hopes for a changing urban future.
According to the Economist, Honduras wants to outsource development of a new city. The idea is to create a ‘charter city:’ a semi-autonomous zone with everything from governance to a separate currency managed independently and overseen by experts outside of the Honduran government. But Honduras faces the question of whether a ‘clean slate’ of separate rules and management can spur economic growth that has been largely elusive in the region.
The political wheels are rolling, but the road to a charter city is long and uncertain.
The national legislature recently legalized the creation of “special development regions,” although the ensuing steps are taking longer than anticipated. In December, Honduran president Porfirio Lobo began appointing a ‘transparency commission’ to oversee the project, despite mixed opinions of the initiative held by other government officials.
Yet charter city supporters remain enthusiastic about the steps taken so far, and optimistic about the direction of the project.
According to Paul Romer, an economics professor at New York University who proposed the concept, charter cities represent a “new type of special reform zone,” building on the idea of a special economic zone by “increasing its size and expanding the scope of its reforms.” His idea is to create internal start-ups, akin to the way that businesses often set up new divisions free to operate outside of old rules. Mr. Romer believes that the clean slate will allow government authorities to experiment with laws and governance. “What types of mechanisms will allow developing countries to copy the rules that work well in the rest of the world?” he asked The Economist.
And people in developing countries like Honduras, Mr. Romer says, will respond to the initiative by embracing opportunities in charter cities. “The worldʼs poor know that better rules prevail elsewhere,” he says, citing the Gallup report that 630 million people would like to move permanently to another country.
Charter cities, Romer claims, should also be of interest to rich countries, such as the United States, struggling with illegal immigration, as they offer an alternative to residents of poorer countries seeking to migrate.
But many do not agree with Romer’s plan for building cities from scratch in the world’s poorest nations, and outsourcing their design and government to rich countries. Duncan Green of Oxfam has been critical of Romer’s idea for several years, and writes that “the underlying motive seems to be to liberate development from the supposedly dead hand of dysfunctional and corrupt states, transferring it instead into the hands of benign and honest technocrats” in Honduras.
As Green points out, the Trujillo charter city proposal is incomplete at best. Even with significant outside investment and oversight, charter cities would likely suck talent and resources away from their surrounding nation-states. And even with private security forces protecting the land of new development and investment, the presence of a wealthy, employment-generating city could create huge slums outside its borders.
The allure of a Central American Hong Kong may sound appealing to some, but officials must address many questions. After all, Hong Kong was a longtime colonial outpost before becoming a semi-autonomous economic zone. Is that really what Honduras wants? Or can Trujillo skip the colonial stage?
Honduran officials have a long road ahead to bring change to the Caribbean coast. But Mr. Romer’s vision has people talking. And for Honduras, it may just have a promising direction in store.
Erik Mandell is a graduate of Middlebury College in Vermont. He is currently pursuing a master's degree in public administration and global leadership at Portland State. Read his other contributions to Global Envision.
A new model for Middle East economic practices starts with Tunisia, Libya
Countries: Egypt, Iraq, Libya, Tunisia
Previously filed under: Global Economy

Sitting in cafes all over Tunisia are unemployed youth with college degrees and nothing better to do.
Tunisia's recent revolution left it with skyrocketing unemployment and an economic collapse. Libya, Tunisia’s neighbor, finds itself in a similarly precarious situation. Their crucial difference is that while Tunisia is relatively developed, Libya has no working infrastructure. And ironically, it is this lack of infrastructure that provides the solution to both countries' problems.
Following the wake of Tunisia’s President Ben Ali stepping down and the death of Libya’s Qaddafi, the nations’ new governments are hoping to set up more open ways of conducting business. Previously full of government corruption and theft, transparent business practices will allow both countries to allow the creation of companies that address the people’s interests rather than the government’s. Tunisia and Libya’s citizens are taking advantage of this change, and are already creating businesses aimed at building the desperately needed infrastructure in Libya that Qaddafi never developed. This will, in turn, relieve the strain on Tunisia’s hospitals and other infrastructure, which are currently working at double capacity. According to Tunisian economist Moncef Cheikhrouhou, the rebuilding of Libya could provide jobs for 250,000 Tunisians, all while developing lasting economic ties between the nations and creating the building blocks for Libya’s economy to sustain itself.
The new opportunities for growth and economic connection also have a broader appeal. In the post-Arab Spring Middle East, the example these two struggling countries provide sets the pace for a region full of economic growth potential.
Prior to the Arab Spring, the Middle East economy neglected to build privatized business connections within the region. Ben Ali aligned Tunisia with Europe and Qaddafi kept Libya isolated. When regional investment did occur, it was often corrupt. Libya and Tunisia are both poised to set the example for regional cooperation in an area where business connections are rare, and their timing couldn’t be better. Recent Citibank rankings have placed two other Middle Eastern countries—Egypt and Iraq—as nations with the greatest potential for growth in the next 40 years. Investment in these growing economies would benefit all involved. This closer connection with up-and-coming neighbor economies is particularly important as Tunisia’s long-standing ties to faltering economies like those of Italy and Greece seem to be deteriorating.
With a lot of work cut out for them in the months and years ahead, it looks like as many as a quarter of a million Tunisians could finally leave the cafes and get back to work. Jobs, opportunities, and examples for their Middle Eastern neighbors may follow.
Five things to know about the 7 billionth human
Previously filed under: Culture and Society, Environment, General Globalization, Global Economy
On Monday, the world welcomed its 7 billionth person. The implications of population growth are similarly staggering in number, but here are five of the more important things to know about the growing world community.
There might not be 7 billion of us. Yet.
The October 31st date was chosen by the United Nations Population Fund, and it’s somewhat symbolic. "There is a window of uncertainty of at least six months before and six months after the 31 October date for the world population to reach seven billion," UN population estimates chief Gerhard Heilig told the BBC. However, the crux of the matter—the ever-increasing world population and the problems that come with it—stands.
Human being No. 7,000,000,000 is probably poor—and it's likely the parents didn't plan the pregnancy.
The developing world acted as the engine for most of the last decade's population growth. It’s home to the world’s seven fastest-growing cities, according to Foreign Policy. As such, it’s attracting the attention of policymakers and crystal-ball-gazers alike. Many, like the Worldwatch Institute’s Robert Engelman, propose extending access to contraceptives and encouraging smaller family size to curb population-related problems, though a recent Economist article says that this would only have a modest effect in the face of scarce world resources.
Sure, resource scarcity is a problem, but maybe it doesn’t have to be.
Not all commentators are equally pessimistic about continuing population growth. Some of the most basic problems, like access to food and water, might really be problems of efficiency rather than scarcity. Global Envision contributor Ben Osborn recently wrote about a study by the Consultative Group on International Agricultural Research that showed that given proper integration and storage of water resources, no one would have to go thirsty. On the food front, a scientific study published in Nature showed that proper agricultural reforms “could increase global food availability by 100–180%,” more than enough to meet the needs of our growing population.
The antidote to population could be migration.
Ensuring good quality of life for the earth’s inhabitants goes beyond just food and water. The UN’s State of the World Population 2011 report identifies migration as a trend that can be used to help aid in economic development. Wealthy countries with declining fertility rates could provide job opportunities for workers disenfranchised in their overpopulated home countries. At the same time, migration is a hot-button issue for developed nations that may not be so keen to open their borders. The report also cites increased access to education as a key factor in reducing population growth and providing better opportunities for youth in developing nations.
Maybe we should all just learn to stop worrying and love the population bomb.
Many fear rapid population growth in a world with limited resources, but given the proper policies it might not have to be so scary. Since there’s no “undo” button for world population, perhaps the best question to ask in light of the 7 billion marker is “How can we make the best of it?”
Want to know where you fit into the 7 billion? Check out The BBC’s “What’s Your Number” tool.
Margo Conner is a senior at Lewis & Clark College in Portland, Oregon, majoring in international affairs. Read her other contributions to Global Envision.
Made in China: A slowly emerging consumer class
Countries: China
Previously filed under: Business, Culture and Society, General Globalization, Global Economy
Gap is betting big on China, announcing plans to triple its retail stores there by the end of 2012, reports the Associated Press. But in doing so, the chain will directly compete with its own Chinese suppliers, which for years have been sharpening their teeth making cheap knockoffs of the popular clothing.
Gap is not the only global brand to jump on what they hope will emerge as the next massive consumer class. Apple, Nike, Gucci, Louis Vuitton and Walmart have all positioned themselves to profit from China's nouveau riche. Despite these expectations, the New York Times reports that China’s consumer spending has actually plummeted in the last decade as a portion of the overall economy, to about 35 percent of gross domestic product, from about 45 percent - the lowest percentage for any big economy anywhere in the world.
The remarkable growth the nation has seen has not translated into fruits for middle class families, but rather state-run banks, government-backed corporations and the affluent few with connections, says Carl E. Walter, a former JP Morgan executive who is co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.” Worse yet, low-wage workers who make the clothing sold in stores like Gap simply can’t afford the finished goods. Marketplace’s Kai Ryssdal visited a new Gap store in Shanghai recently; the most striking thing he found about the store was how empty it was. Sales of global “brands” come mainly in the form of the counterfeits and knockoffs sold at busy outdoor markets.
The New York Times suggests the “state capitalism” that’s fueled much of China’s growth must be dismantled before ordinary Chinese citizens will start feeling flush enough to buy Gap’s ‘nostalgic’ 1969 jeans - even the made-for-China version. Chinese Premier Wen Jiabao asserts that the government is ready to make some of those changes. Until then, hedge your bets.
From the Archives
An Inflation Reality Check
From the Archives
Taiwan's Textile Presence in Africa
From the Archives
Russia and the New Great Game
From the Archives
China's Internal Migrants
From the Archives
Globalization and the Markets
Countries: United States
Previously filed under: North America, Global Economy
From the Archives
The Old Saga of Not Enough Jobs
From the Archives
The Chinese Immigrant Experience in Russia
From the Archives
The Mixed Blessings of Oil Boom for African Countries
From the Archives
Beyond the Oil Peak
From the Archives


Recent comments
on Tom's Shoes succeeds at marketing, but Warby Parker wins for a better anti-poverty model
on 20 tiny strokes of genius: Mercy Corps puts social innovations on display
on How Haiti is fighting poverty by killing cash
on 20 tiny strokes of genius: Mercy Corps puts social innovations on display
on Reinterpreting the Brain Drain