This column reported in November 2012 on an effort in Honduras to establish a unique kind of special development region. These regions, called RED after their Spanish acronym, would have created new cities with unprecedented independence from the central government. The RED had many supporters in the Honduran government’s executive and legislative branches, who aimed to bring low taxes, free trade, and the rule of law to their fellow citizens. The judicial branch did not share the enthusiasm, however.
The Supreme Court, worried that the RED statute would allow foreign sovereigns to rule Honduran territory, struck it down as unconstitutional. The first effort to establish in Honduras what have been called “startup” cities thus died. But Honduran reformers did not give up.
Soon the Honduran National Congress was considering legislation that would create Zonas de Empleo y Desarrollo Económico, (“Zones for Employment and Development of the Economy”), called “ZEDE” for short ..
In broad terms, the ZEDE legislation authorizes the creation of startup cities that will operate under the supervision, but not direct control, of the central government ..
Honduran reformers have won a great victory in passing the ZEDE legislation. Many hurdles remain before they cut the ribbon on their first startup city ..
Honduran reformers have already won many victories in their fight for startup cities, though. Twice they have amended their constitution; twice they have passed comprehensive enabling legislation. They have given a bold and uniquely Honduran answer to one of the world’s oldest and hardest questions: How can we live together in peace and prosperity? They have dealt a mortal blow to stasis, the enemy of all progress, and cleared the way toward newer, freer cities.