Despite its problems, the ills that plague Honduras are known and fixable. Former New York Mayor Rudolph Giuliani demonstrated that crime and murder rates can be quickly brought down with smart policing and a determined political leadership. (New York City has approximately the same population as Honduras.) Honduras should move to “e‐government” as Estonia did a couple of decades ago under the leadership of Prime Minister Mart Laar to quickly get rid of much of the corruption. Corrupt and incompetent judges need to be fired, and even be temporarily replaced with some respected foreign judges as some countries have done. Former Chilean mining and labor minister, Jose Pinera, was the architect of the reform of Chile’s social security system and subsurface property rights regime, which were key ingredients in Chile’s rush from a poor to a developed country. Honduras ought to adopt much of the Chilean model.
Honduran President Juan Orlando Hernandez, his predecessor and the Honduran Congress have supported the creation of free zones within Honduras as demonstration projects to show the benefits of free markets and the rule of law in creating well‐paying jobs and economic growth. The first of these zones will be operational within the next couple of months. They are known as ZEDEs, meaning Zone for Employment and Economic Development.
The approval and operational rules of each ZEDE are provided by an international committee known as CAMP (Committee of Best Practices). In order to provide international credibility and independence, the majority of the CAMP members (of which I am one) are non‐Hondurans, drawn from nine countries. An American ex‐pat and free‐market political evangelist, Mark Klugmann, Honduran lawyer and former government official Octavio Sanchez, Executive Secretary of the Cabinet Ebal Diaz, and former President Ricardo Maduro were instrumental in the design and selling of the ZEDE concept. The ZEDEs will be able to create their own infrastructure — plus fire, police, medical facilities and civil court system (using the British common law system rather than the Honduran administrative law system if they so choose). The ZEDEs can also allow choice in currency. In essence, each ZEDE will operate as a free city — devising most of its own rules, regulations and structure to make it economically attractive to foreign investors. If they work as envisioned, they will be major employment generators and free of corruption, and thus serve as a role model for the rest of Honduras.
There are many recent examples of countries — and relatively free economic enclaves around the world — achieving very high economic growth rates for a sustained period of time. There is no reason why Honduras cannot make the necessary changes to become a high‐growth country, with the doubling of real incomes every decade or so, quickly becoming a developed (and safe) country. The Honduran ZEDE experiment is a part of the attempt to not only catch up with its neighbors but to surpass them.