Honduran Government Hypes Its New "Free Zones" with New President
Libertarians the world over have had their eye on Honduras as it experiments with the notion of special economic zones that allow great liberty in some respects than the rest of the nation.
Over the weekend the administration of new president Juan Orlando Hernandez issued a press release hyping them.
From the release:
Innovative "Zones for Economic Development and Employment" (ZEDE) are designed to be the most competitive new jurisdictions in the CAFTA space.
Unlike traditional special zones that just address a single dimension by using only economic incentives, the Honduran ZEDE considers four critical dimensions and addresses the legal, economic, administrative, and political (LEAP) factors that in the CAFTA region are vital for winning investment leadership….
The advantage for Honduran workers is real:
By building competitiveness across all the LEAP factors, the Honduran ZEDE avoids the "race to the bottom" that is driven by the lowest wage countries of Asia and Africa and instead adds greater value and security for investors seeking the most credible "near-shore" production and employment platform in a new, first-class jurisdiction in the CAFTA region….
the Honduran ZEDE jurisdiction competes for world investment with additional advantages unique in the CAFTA region:
— International legal standards, dispute resolution mechanisms and institutions, using Common Law, mandatory arbitration, and special judges.
— A 21st century, business-efficient, non-politicized, transparent, stable, system of administration, plus a special police and security institutionality to overcome regional issues and meet world standards….
— For high value brands, a modern and transparent export jurisdiction able to provide superior confidence and predictability. For innovative sectors that work with new technologies, processes and markets, an agile new jurisdiction with a unique, rapid customization capacity.
— A durable and transparent investment regime secured by a strong law, guaranteed by a constitutional amendment, reinforced by an international treaty, and further protected by international trade agreements including CAFTA and others.
I wrote of the history of this idea in Honduras back in Reason's June issue, "The Blank Slate State."