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Charter Cities Ruled By Multinational Corporations?

Charter cities are not new. But a charter city governed by a multinational corporation makes me intuitively nervous. In any case, it is happening in Honduras, where there is much controversy over the issue. What is your take on this?

“I’ve Seen All Sorts of Horrific Things in My Time. But None as Detrimental to the Country [Honduras] as This.”

The Honduran government’s newest development plan, an idea from New York University economist Paul Romer: Charter cities. In 2013, the Honduran government passed a law based on many aspects of Romer’s idea, which is to create autonomous free-trade zones that are governed by corporations, instead of the countries in which they exist. The first Special Economic Development Zones (ZEDE, for its name in Spanish) is being conceived in Honduras, financed by $40 million from the South Korean government. It will likely be located in Amapala.  […]

Many wonder if charter cities will bring development to average citizens or only enrich wealthy investors. Many believe the project will allow multinationals to violate labor and environmental rights, and some argue that it’s unconstitutional and violates national sovereignty. According to the charter city law, Honduras will sell territory to investors; that territory becomes an autonomous region no longer governed by Honduran laws or police. ‘This is nothing more than a plan to get rid of the national debt by auctioning off the country,’ ex-president Manuel Zelaya, overthrown in a 2009 coup, told me at a rally on the coup’s fifth anniversary. […]

According to the ZEDE law, the project will work like this: An investor, either international or local, builds infrastructurea port, a mine, or a textile factory, for instance. The territory in which they invest becomes an autonomous zone from Honduras, like Hong Kong nominally is to China. The investing company must write the laws that govern the territory, establish the local government, hire a private police force, and even has the right to set the educational system and collect taxes.

— Danielle Marie Mackey, New Republic

Thom Hartman Comments on Honduras Charter Cities


About The Author

JoAnn Chateau

JoAnn Chateau likes progressive politics and loves the canines. She writes fiction about an alpha Bichon named Chester, and his friends–with a dash of humor and a dab of poli-sci. JoAnn worked professionally in the Psychology and Information Science fields. Retired now, she enjoys the creative life.


  1. Debra

    If anyone was ever confused about whther or not capitalism is good for ordinary people they could visit Honduras. So many human rights abuses … nothing good can come of this.

  2. Ellen Hawley

    Sounds like the old company town to me. You know about them? The company ran everything, often including the store, which only accepted company scrip, which the company paid its workers then collected back when they bought goods at the only place that would accept it. Oh, and the company ran the police force. And did I mention, they kept unions out pretty effectively?

    • JoAnn Chateau

      Yes it does! Even if the charter city provides jobs, they will undoubtedly pay low wages. The people will be dependent on it, but little better off.

  3. Robert A. Vella

    Reblogged this on The Secular Jurist and commented:
    “Many believe the project will allow multinationals to violate labor and environmental rights, and some argue that it’s unconstitutional and violates national sovereignty. ” – True.

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