Honduras Update

Here at Charter Cities, we’ve received several requests for comment on recent press reports of an agreement with investors to develop the Honduran Special Development Regions (known as REDs, following the Spanish acronym). We learned of these agreements from the media and have no knowledge of their terms, so we’re unable to offer any comment about them.

Back in December 2011, the President of Honduras appointed George Akerlof, Nancy Birdsall, Boon-Hwee Ong, Harry Strachan, and me (Paul Romer) to the Transparency Commission established by the RED legislation to oversee the integrity of governance in the REDs.

However, the decree formalizing our appointment was not officially published, in deference to the Honduran Supreme Court, which has been considering a challenge to the constitutionality of the RED law. Thus the Transparency Commission was never legally constituted and it was never able to exercise any of its functions under the Constitutional Statute on Special Development Regions.

To clarify our position in light of this week’s developments, the five of us today sent the following joint letter to Honduran President Porfirio Lobo.

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7 September 2012

H.E. Porfirio Lobo Sosa,
President of the Republic of Honduras
Casa Presidencial
Tegucigalpa, M.D.C.
HONDURAS

Dear Mr. President,

Since the report of our appointment as members of the Transparency Commission for the Special Development Regions (REDs) appeared in December 2011, we understand that a constitutional challenge to the legal framework for the REDs has made it difficult for you to publish the decree giving legal validity to our appointment. Thus the conditions have not existed to permit the Transparency Commission to play the role envisioned for this ambitious and important project.

As you continue to work to attract foreign investment under the RED framework in this period of uncertainty, we feel it would be wise to release you from any sense of obligation to proceed with publication of the decree and thus with our formal appointment.

You should know that we, as individuals, continue to believe strongly in the vision behind the Honduran RED initiative, and we stand ready to be of service when the impediments to the full establishment of the institutional framework of the REDs have been resolved.

Sincerely yours,

Paul Romer
George Akerlof
Nancy Birdsall
Boon-Hwee Ong
Harry Strachan

cc: The Hon. Juan Orlando Hernández, President of the National Congress

This post originally appeared on the NYU Stern Urbanization Project’s blog. To read the original post, click here.