The government of Honduras has signed a deal with private investors for the construction of three privately run cities with their own legal and tax systems.
The memorandum of agreement signed Tuesday is part of a controversial experiment meant to bring badly needed economic growth to this small Central American country. Its weak government and failing infrastructure are being overwhelmed by corruption, drug-linked crime and lingering instability from a 2009 political coup.
Students of history (and there are fewer good ones with each passing day) will remember that, in the wake of the Opium Wars, the European powers carved out “concession” areas in major cities in Old China. In these areas Europeans were not subject to Chinese law at all. This was the origin of the infamous “No Dogs or Chinese” sign in old Shanghai. The concessions were a source of a great deal of resentment among the Chinese, and the Communists used that to help secure their victory. We saw the same pattern in the Ottoman Empire as well.
What the Hondurans are doing is no different. They’re a form of concession, albeit to private corporations instead of governments. And I think that the long-term results will be no different from the ones we saw with the Chinese or the Middle Easterners: resentment.
It will be pleasant for the “foreign devils” that live there, but in the long run we may pay a higher price than we think.