Honduras: court quashes ‘model cities’; investors eye Jamaica

By a 13-2 vote on Oct. 17, the Honduran Supreme Court of Justice (CSJ) ruled that Decree 283-2010, the constitutional change enabling the creation of privatized autonomous regions known as “model cities,” is unconstitutional. The decision confirmed an Oct. 3 ruling by a five-member panel of the CSJ; the full court had to vote because the panel’s ruling was not unanimous. The “model cities” concept was promoted by North American neoliberal economists as a way to spur economic development in Honduras. The autonomous zones, officially called Special Development Regions (RED), would “create hundreds of thousands of jobs in Honduras,” according to Grupo MGK, the US startup that was to manage the first project. (Honduras Culture and Politics, Oct. 17)

The CSJ decision clearly upset congressional promoters of the “model cities.” Ricardo Cardona, National Congress president Juan Orlando Hernández’s private secretary, said the project “had failed because of the opposition of the extreme left and the extreme right in Honduras…the same ones who conspired to bring about the coup d’Ă©tat in 2009.” Now they have “conspired so that 205,000 Hondurans have lost the opportunity to get employment in the ‘model cities,'” he claimed.

Grupo MGK reacted to the CSJ decision by pulling out of Honduras. “Michael Strong, MGK’s president, went to Jamaica and met with high officials of that country and will bring the money that he was thinking of investing in Honduras,” the company’s Honduran representative, Guillermo Peña, said on Oct. 19 during an appearance on Channel 10 television. “Since there aren’t the conditions we asked for [in Honduras], we’ll bring the capital to other countries of the world,” Peña added. In addition to Jamaica, MGK was carrying on conversations with various Caribbean and Eastern European countries, according to Peña. He claimed that Greece would be attractive for investment, since “this plan allows them to get out of the economic crisis.” (El Heraldo, Tegucigalpa, Oct. 19; La Prensa, Tegucigalpa, Oct. 19)

From Weekly News Update on the Americas, Oct 21.