Today, the NYTimes is catching up, and has a nice report giving a bit of background and explaining this amazing thing that is happening in Honduras. Here are the most important parts — I don't agree with Romer's ideas, they are not libertarian, and not my cup of tea. What I deeply respect, is his idea of trying these new special cities, and his ability to convince the Honduras government to implement them.
How could Honduras, the original banana republic, reform a political and economic system that kept nearly two-thirds of its people in grim poverty?There's an official "propaganda" uploaded by the Gov of Honduras on YouTube explaining how it all works. It's not as great as I hoped, but it's quite an evolution already:
Honduras’s economy is dominated by a handful of wealthy families; two American conglomerates, Dole and Chiquita, have controlled its agricultural exports; and desperately poor farmers barely eke out subsistence wages. Then a friend showed him a video lecture of the economist Paul Romer, which got Sánchez thinking of a ridiculously big idea: What if Honduras just started all over again?
Romer, who is expected to be chairman, is hoping to build a city that can accommodate 10 million people, which is 2 million more than the current population of Honduras. His charter city will have extremely open immigration policies to attract foreign workers from all over. It will also tactically dissuade some from coming. Singapore, Romer said, provides a good (if sometimes overzealous) model. Its strict penalties for things like not flushing a public toilet may make for late-night jokes, but they signal to potential immigrants that it is a great place if you want to work hard and play by the rules.
There will be many rules in Romer’s charter city too. Even though he expects most initial opportunities will be fairly low-paying basic industrial jobs, the local government will mandate policies that ensure retirement savings, health care and education. According to Romer’s plan, the immigrants who arrive will not get rich, but their children will eventually be ready to climb the economic-development ladder.
It’s easy to criticize experimenting with the livelihoods of the poor, but having spent time in the chaotic slums of Honduras, Haiti, Jordan and Indonesia, I’ve found that the poor are already conducting daily experiments in how to make life better outside the formal economy. By and large, it isn’t working. We have to try some new things, probably many new things. And we have to accept that some of them won’t work.