What an official of the rightwing government of Honduras is calling the "most important project in half a century," critics of the neoliberal plan to build private cities in the Central American nation are calling a "catastrophe" and argue that so-called "chartered cities" would violate the rights of all Hondurans, with particularly negative impacts for the nation's indigenous population.

President Porfirio Lobo—who came to power in a military coup in 2009—has fully endorsed the proposals to create privately-funded "charter cities" as a way to attract foreign investment to his nation. Details remain elusive, but the experimental cities would be modeled on independently-governed and profit-driven business center cities, so-called "free trade zones" like Dubai or Hong Kong, but would be built virtually from scratch on lands to be determined by the government.

Inspired by US economist advisers—namely US economist Paul Romer, a graduate of the University of Chicago school of economics and currently a professor at the Stern School of Business at NYU—the cities would operate outside the control of the regular Honduran government and have "their own police, laws, government and tax systems."

Details of the plan remain murky, but the government has already held high-level meetings with possible private investors and the Associated Press reports that the MGK investment group has already promised $15 million to begin construction on the first proposed city.

As the government moves quickly forward, however, opponents have launched legal challenges to the deals and indigineous groups argue that their lands are the target of the government.

As the Associated Press reports:

"These territories are the Garifuna people's and can't be handed over to foreign capital in an action that is pure colonialism like that lived in Honduras during the time that our land became a banana enclave," said Miriam Miranda, president of the Fraternal Black Organization of Honduras.

Oscar Cruz, a former constitutional prosecutor, filed a motion with the Supreme Court last year characterizing the project as unconstitutional and "a catastrophe for Honduras."

"The cities involve the creation of a state within the state, a commercial entity with state powers outside the jurisdiction of the government," Cruz said.

The Supreme Court has not taken up his complaint.

The Guardian adds:

... the idea has provoked controversy in a country already suffering from one of the worst levels of inequality in the world.

Critics say it will allow a foreign elite to set up a low-tax, sympathetically regulated enclave where they can skirt labour standards and environmental rules.

"This would violate the rights of every citizen because it means the cession of part of our territory to a city that would have its own police, its own juridical power, and its own tax system," said Sandra Marybel Sanchez, who joined a group of protesters who tried to lodge an appeal at the supreme court.

Ismael Moreno, a correspondent for the leftwing Nicaraguan magazine Envio, compared the charter cities to the banana enclaves, which were run on behalf of a foreign elite. He also spelled out the environmental risks, particularly if one of the development sites is the Sico valley, an area of virgin forest on the Mosquito Coast.

"This model city would end up eliminating the last agricultural frontier left to us," he wrote.

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