Honduras approves controversial deal to create privately run cities

The government of Honduras has approved a controversial deal to construct three privately run cities, each with their own judiciary and laws, legal and tax systems, immigration policy, governments, police forces and empowered to sign international agreements on trade and investment.

Amidst speculations that the government is trying to create cities similar to Singapore and Hong Kong, representatives of the government of Honduras and MGK international group signed a memorandum of understanding to hand over land to private investors for the construction of three privately run cities.

The deal aims at boosting economic growth, encouraging investment and creating at least 200,000 jobs and described to “have the potential to turn Honduras into an engine of wealth”, according to Carlos Pineda, president of the Commission for the Promotion of Public-Private Partnerships. Michael Strong, CEO of the MKG Group said: “We believe this will be one of the most important transformations in the world, through which Honduras will end poverty by creating thousands of jobs.”

Congress president Juan Hernandez said that South Korea has given Honduras $4 million to conduct a feasibility study. He added that the international group will invest $15 million to begin building basic infrastructure for the first city near Puerto Castilla, creating 5,000 jobs over the next six months. Hernandez said another city will be built in the Sula Valley, in northern Honduras, and a third in southern Honduras. He gave no other details.

Civic groups in Honduras attempted to file a lawsuit against the project. Many argued that the new deal would create worse inequality between rich and poor, undermine laws, labour rights and cease part of the sovereignty of Honduras. The project was also opposed by indigenous Garifuna people who say they don’t want their land to be used for the project. 

Oscar Cruz, a former constitutional prosecutor, filed a motion with the Supreme Court last year characterising the project as unconstitutional and “a catastrophe for Honduras”. The Supreme Court has not taken up his complaint. 

Fadi Elhusseini