Reporting on Romer’s Charter Cities: How the Media Sanitize Honduras’s Brutal Regime

By Keane Bhatt | NACLA | February 19, 2013

On the evening of Saturday, September 22, human rights lawyer Antonio Trejo stepped outside a wedding ceremony to take a phone call. Standing in the church parking lot of a suburb of Tegucigalpa, Honduras, he was shot six times by unknown assailants. Despite his requests, he had been granted no police protection in the face of death threats; Trejo had believed he would be targeted by wealthy landowners over his outspoken advocacy on behalf of small farmers seeking to reclaim seized territories.¹ In his death, Trejo joined dozens of fallen peasant leaders whom he had defended, as well as murdered opposition candidates, LGBT activists, journalists, and indigenous residents. All were victims of the violence and impunity that has reigned in Honduras since the 2009 coup d’état against its democratically elected and left-leaning president, Manuel Zelaya.

Earlier that day, Trejo had appeared on television, denouncing the powerful interests behind the government’s push for ciudades modelos—swaths of land to be ceded to international investors and developed into autonomous cities, replete with their own police forces, taxes, labor codes, trade rules, and legal systems. He had helped prepare motions declaring the proposal unconstitutional.

This concept of “charter cities” has been promoted for a couple of years by Paul Romer, a University of Chicago–trained economist teaching at New York University. He described his brainchild in a co-authored op-ed as “an effort to build on the success of existing special zones based around the export-processing maquila industry.” A “new city on an undeveloped site, free of vested interests” could bypass the “inefficient rules” that hinder “peace, growth and development” worldwide, he argued. With new and stable institutions, the charter city could become an “attractive place for would-be residents and investors.”²

The international press swooned over Romer’s revolutionary idea: Foreign Policy magazine named him one of its Top 100 Global Thinkers of 2010 for “developing the world’s quickest shortcut to economic development”;³ that same year, The Atlantic dedicated a 5,400-word paean to Romer and his “urban oases of technocratic sanity,” which held the promise that “struggling nations could attract investment and jobs; private capital would flood in and foreign aid would not be needed.”

But the applicability of Romer’s radical vision in Honduras always depended on the enthusiasm of the authoritarian, post-coup government of Porfirio Lobo. Lobo owes his presidency to the sham elections of 2009, which took place under the U.S.-backed de facto military government that overthrew Zelaya and were marred by violent repression and media censorship. With the exceptions of the U.S.-financed International Republican Institute and National Democratic Institute, international observers boycotted the electoral charade that foisted Lobo into power.

Romer’s lofty theories also remained utterly detached from the brutal nature of the collaborating government. “Setting up the rule of law” from scratch in a new city, he contended, would be an antidote to “weak governance” (weak in no small part due to Lobo’s appointment of coup perpetrators to high-level government positions).⁴ In a co-authored paper, Romer also mischaracterized his allies, the “elected leaders in Honduras,” as earnest in their intent to end a “cycle of insecurity and instability that stokes fear and erodes trust.”⁵ (Romer offered no comment when Lobo designated Juan Carlos “El Tigre” Bonilla, accused of past ties to death squads, as the national chief of police.)⁶

Even on its own terms, Romer’s development theory is disconnected from reality. He has repeatedly invoked Hong Kong as the sunny inspiration for the remaking of Honduras: “In a sense, Britain inadvertently, through its actions in Hong Kong, did more to reduce world poverty than all the aid programs that we’ve undertaken in the last century,” he claimed.⁷ Romer neglected to add that the city developed as a hub for the largest narcotrafficking operation in world history, through which Britain inflicted untold misery on the Chinese mainland. Britain dealt a humiliating military defeat to China (which had attempted to prohibit illegal British opium from entering its borders), took over Hong Kong, and forced China to abandon its tariff controls in 1842. Given that Hong Kong was one of the spoils of a drug war, and that its inhabitants were permitted democratic elections only 152 years after its incorporation into an empire, Romer’s dream for Honduras could just as easily be considered a nightmare.

Romer’s focus on good rule making is similarly fanciful; his effort to change the rules that engender poverty conspicuously excludes the international legal privileges that allow undemocratic leaders to sell a country’s resources and borrow in its name (he wrote positively of a trade agreement that Lobo struck with Canada this summer).⁸ Romer also approved of the legal architecture that “gives the United States administrative control in perpetuity over a piece of sovereign Cuban territory, Guantanamo Bay,” through a 1901 treaty that he failed to mention was ratified by a militarily occupied Cuba. Whether Romer knows it or not, his endorsement of power politics is clear: Investor-owned cities would be safe from future efforts by governments to repossess sovereign territory, because “Cuba respects the treaty with the United States, even as they complain bitterly about it.”⁹

Romer rebutted criticisms that his idea smacks of neocolonialism: “There are some things that it shares with the previous colonial enterprises,” he admitted, “but there’s this fundamental difference: at every stage, there’s an absolute commitment to freedom of choice on the part of the societies and the individuals that are involved.”¹⁰ Which choices are available to individuals living under a coercive, illegitimate government is a question left unanswered, and the adulating press could not be bothered to probe further.

After all, it would be impolite to reveal Romer’s close cooperation with a government whose security forces—many of whom are personally vetted, armed, and trained by the United States—killed unarmed students Rafael Vargas, 22, and Carlos Pineda, 24, as well as pregnant indigenous Miskitu women Juana Jackson Ambrosia and Candelaria Trapp Nelson, among others.¹¹ Indeed, the Committee of Families of the Detained and Disappeared of Honduras observed that more than 10,000 official complaints have been filed against Honduras’s military and police since the coup. Such unsavory details might have chastened The Atlantic’s ebullient portrait of the “elegant, bespectacled, geekishly curious” professor, and would have tarnished President Obama, who praised Lobo for his “strong commitment to democracy” while providing his brutal security apparatus with $50 million in aid last year.¹²

In their coverage of Romer’s charter cities, the media have almost entirely excised the innumerable human rights violations occurring under the undemocratic Honduran regime. The New York Times is a case in point. About a week after Amnesty International, Human Rights Watch, the Inter-American Commission on Human Rights, and even the U.S. State Department were compelled to release statements of condemnation over Antonio Trejo’s assassination, Times reporter Elisabeth Malkin fawned over Romer’s idea while ignoring the killing of one of its most prominent critics. (Romer himself offered no public statement in the wake of Trejo’s death-squad-style killing.) Charter cities promised to “simply sweep aside the corruption, the self-interested elites, and the distorted economic rules that stifle growth in many poor countries,” asserted the imperturbable Malkin. She added with uncommon journalistic authority, “Nobody disputes that impoverished, violent Honduras needs some kind of shock therapy.”¹³

This is not the first instance in which the Times has glossed over inconvenient facts to laud shock therapy, a doctrine of massive privatization and investor-friendly deregulation developed at the University of Chicago.¹⁴ Many years after Chile’s coup government pushed through a rash of measures designed by economist Milton Friedman and his acolytes, the Chicago Boys, the Times reported that “Chile has built the most successful economy in Latin America, and one of the vital underpinnings of that growth was the open economic environment created by the former military dictator, Gen. Augusto Pinochet.”¹⁵ Leaving aside Pinochet’s torture and murder of tens of thousands of dissidents, Chile’s per capita gross domestic product was practically unchanged 13 years after the coup; Pinochet’s “free-market” experiment also ended with re-nationalizations in banking and copper extraction, the institution of capital controls, and continuous state support for Chile’s exports.¹⁶

Following in this dubious tradition of portraying a reactionary societal experiment as a formula for prosperity, the Times’ first piece on Honduran charter cities appeared in its Sunday magazine in May 2012. Author Adam Davidson, co-creator and host of National Public Radio’s Planet Money program, considered charter cities a “ridiculously big idea” for fixing an “economic system that kept nearly two-thirds of [Honduras’s] people in grim poverty.” Davidson related the story of Octavio Sánchez, Lobo’s chief of staff, who met with Romer to develop a “secure place to do business—somewhere that money is safe from corrupt political cronyism or the occasional coup.”¹⁷ Davidson, however, scrupulously avoided Sánchez’s own role as an apologist for the 2009 military overthrow of Zelaya. Days after Zelaya’s ouster, Sánchez advised Christian Science Monitor readers not to “believe the coup myth,” and in an Orwellian flourish, the Harvard Law graduate declared that “the arrest of President Zelaya represents the triumph of the rule of law.”¹⁸

In November, Planet Money provided an obsequious follow-up on Romer and Sánchez’s collaboration, scrubbing any mention of the 2009 coup and Lobo’s emergence from it, and portraying Sánchez as an idealistic dreamer. “Instead of fighting to do two, three or four reforms during the life of a government,” Sánchez asked, “why don’t you just do all of those reforms at once in a really small space? And that’s why this idea was appealing. It’s really the possibility of turning everything around.”¹⁹

Planet Money’s co-hosts unwittingly conveyed the fundamental obstacle to shock therapy: “Paul Romer has this killer idea and no real country to try it in; Octavio has the same idea, but no way to sell it to his people.” They acknowledged that even with “a government that’s ready to go,” the “people in Honduras” viewed Romer’s plan as “basically Yankee imperialism.” The episode concluded by explaining the apparent collapse of the charter cities initiative, resulting partly from the post-coup government’s lack of transparency (Romer was “stunned”), as well as a Honduran Supreme Court ruling in October that found charter cities unconstitutional. Romer remains unfazed, the hosts said. He has a promising lead in North Africa—another opportunity to answer “one of the oldest problems in economics: how to make poor countries less poor.”

Regardless of what Romer and his media sycophants think of the charter city’s (questionable) efficacy, their deafening silence on its antidemocratic implications and Honduras’s human rights abuses is unconscionable. In this insulated world, Honduran victims of economic hardship and state terror, and their own proposals to solve poverty, remain invisible. Pinochet, the original administrator of shock therapy, distilled the insouciance of today’s intellectual and media culture when, in 1979, he remarked, “I trust the people all right; but they’re not yet ready.”²⁰

Keane Bhatt is a regular contributor to the MALA section of NACLA Report and the creator of the Manufacturing Contempt blog on the NACLA Website.

1. Alberto Arce, “Slain Honduran lawyer Complained of Death Threats,” Associated Press, September 25, 2012.

2. Paul Romer and Octavio Sánchez, “Urban Prosperity in the RED,” The Globe and Mail: April 25, 2012.

3. “The FP Top 100 Global Thinkers,” Foreign Policy, November 26, 2012. Sebastian Mallaby, “The Politically Incorrect Guide to Ending Poverty,” The Atlantic, July/August 2012.

4. Romer and Sánchez, “Urban Prosperity.” Dana Frank, “Honduras: Which Side Is the US On?,” The Nation, May 22, 2012.

5. Brandon Fuller and Paul Romer, “Success and the City: How Charter Cities Could Transform the Developing World,” Macdonald-Laurier Institute, April 2012.

6. Katherine Corcoran and Martha Mendoza, “New Honduras Top Cop Once Investigated in Killings,” Associated Press, June 1, 2012.

7. Sebastian Mallaby, “Politically Incorrect Guide.”

8. Romer and Sánchez, “Urban Prosperity.”

9. Can “Charter Cities” Change the World? A Q&A With Paul Romer,” Freakonomics.com, September 29, 2009.

10. Jacob Goldstein and Chana Joffe-Walt, “Episode 415: Can a Poor Country Start Over?” NPR’s Planet Money, November 9, 2012.

11. Javier C. Hernandez, “An Academic Turns Grief Into a Crime-Fighting Tool,” The New York Times, February 24, 2012; Annie Bird and Alexander Main, “Collateral Damage of a Drug War,” Center for Economic and Policy Research and Rights Action, August 2012.

12. U.S. Office of the Press Secretary, “Remarks by President Obama and President Lobo of Honduras Before Bilateral Meeting,” whitehouse.gov, October 5, 2011; Dana Frank, “Honduras.”

13. Elisabeth Malkin, “Plan for Charter City to Fight Honduras Poverty Loses Its Initiator,” The New York Times, September 30, 2012

14. Naomi Klein, The Shock Doctrine: The Rise of Disaster Capitalism (Metropolitan Books, 2007).

15. Nathaniel C. Nash, “Terrorism Jolts a Prospering Chile,” The New York Times, April 9, 1991.

16. Paul Krugman, “Fantasies of the Chicago Boys,” The Conscience of a Liberal (blog), The New York Times, March 3, 2010.

17. Adam Davidson, “Who Wants to Buy Honduras?,” The New York Times Magazine, May 8, 2012.

18. Octavio Sánchez, “A ‘Coup’ in Honduras? Nonsense,” The Christian Science Monitor, July 2, 2009.

19. Goldstein and Joffe-Walt, “Can a Poor Country.”

20. John B. Oakes, “Pinochet in No Rush”, The New York Times, May 3, 1979.

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NPR Examines One Side of Honduran “Model Cities” Debate

By Dan Beeton | CEPR The Americas Blog | January 15, 2013

Honduran newspaper El Heraldo reports that a plan for the creation of “model cities” was reintroduced in the Honduran congress yesterday, months after the Supreme Court declared earlier such plans to be unconstitutional. Congress President Juan Orlando Hernández said that he did not expect the plan to run into the same legal problems as last year because he had taken into account the Supreme Court’s arguments for its decision.

According to El Heraldo, the bill proposes the creation of the 12 special regimes of various kinds which “shall enjoy operational and administrative autonomy.” Among these are “ciudades autónomas.”

Earlier this month, NPR’s This American Life profiled the “model cities” or “charter cities” concept for Honduras in a report that only presented one side of the debate. The report follows reporters Chana Joffe-Walt and Jacob Goldstein’s previous account of the Honduran “model cities” concept for NPR’s Planet Money, and an early examination of the plans in The New York Times Magazine by Planet Money co-creator Adam Davidson.

There is much important context that the This American Life “model cities” profile left out. First, the proposed “model cities” could impact the land rights of Garifuna (Afro-indigenous) communities in the area.  There was little mention of opposition to the “charter cities” idea inside Honduras, outside of lawyers and the Supreme Court decision. And crucially, Honduras has been in a state of relative chaos since the coup, with a breakdown of institutions and the rule of law leading to, among other things, Honduras having the highest murder rate in the world (now at 91 per 100,000 people, according to the UN) (a fact that the This American Life report does note).

As The Americas Blog readers know well, there is a strong political dimension to this violence. As human rights organizations from Human Rights Watch to Amnesty International to the International Federation for Human Rights have described, there has been political repression since the coup, targeting opponents of the coup and of the current Lobo government with assassination, forced disappearance, torture, rape, kidnapping, and other abuses. Journalists, lawyers, opposition party candidates, the LGBT community, and women have also been targets, with attacks against each of these groups spiking since the coup. The Garifuna communities are another targeted group, with, e.g., land barons in the Zacate Grande region attacking community groups and radio stations. Honduras is now widely recognized as one of the most dangerous countries to be a journalist, with some 23 journalists murdered since President Lobo took office in January 2010 according to the Committee to Protect Journalists.

A prominent attorney, Antonio Trejo Cabrera, who opposed the “model cities” plan and who represented campesino groups in another conflict area – the Aguan Valley – was assassinated in September in a case that received international media attention and was widely denounced.

NPR listeners might also be interested to know that Honduras had made economic progress under the Zelaya government prior to the 2009 military coup d’etat (the This American Life report does not mention the coup). As we described in a November 2009 report, poverty and inequality decreased significantly during the Zelaya administration, with economic growth of more than 6 percent during the first two years. The Zelaya government also used expansionary monetary policy to counter-act the global downturn in 2008. It did not need to construct libertarian utopias in order to do these things; indeed, they would not have had this progress had they tried.

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Honduras: Now Open for Political Murder

By NICK ALEXANDROV | CounterPunch | October 9, 2012

Last Wednesday’s presidential debate, and the flurry of fact-checking that followed, helped sustain the illusion that Republicans and Democrats are bitter rivals.  Reporters and analysts obsessed over the accuracy of each candidate’s claims, ignoring the two parties’ broadly similar goals, which mainstream political scientists now take for granted.  “Government”—both parties are implicated—“has had a huge hand in nurturing America’s winner-take-all economy,” Jacob S. Hacker and Paul Pierson write in Winner-Take-All Politics, their study of the massive transfer of wealth to the richest Americans since the 1970s.  George Farah’s research has shown how cross-party collaboration extends from economic issues to the debate’s structure.  The Commission on Presidential Debates, a private corporation both parties created, ensures independent candidates will be excluded, and more generally that the events will remain the sterile, predictable spectacles familiar to viewers.

No doubt the foreign policy debate in a few weeks will offer much of the same.  In the real world, meanwhile, Obama embraced and extended Bush’s foreign policy, as the case of Honduras illustrates especially well.  After the Honduran military staged a coup against democratically-elected President Manuel Zelaya on June 28, 2009, Obama and Secretary of State Clinton backed the ensuing fraudulent elections the Organization of American States and European Union refused to observe.  Porfirio Lobo won the phony contest, and now holds power.  “The conclusion from the Honduras episode,” British scholar Julia Brixton wrote in Latin American Perspectives, “was that the Obama administration had as weak a commitment to democracy, human rights, and the rule of law as the preceding U.S. presidency.”

The coup’s plotters, it should be emphasized, knew exactly what they were doing.  Colonel Bayardo Inestroza, a military lawyer who advised them on legal issues, was very open about it, informing the Salvadoran newspaper El Faro, “We committed a crime, but we had to do it.”  U.S. officials seem to have taken slightly longer to recognize the obvious, but Wikileaks documents indicate that, by late July, they understood that what had transpired was “an illegal and unconstitutional coup.”  Obama’s legal training, cosmopolitan background and cabinet stuffed with intellectuals were all irrelevant in this situation, like so many others.  A different set of factors drives U.S. foreign policy, which is precisely why, to cite just one example, Matt Bai’s analysis of “Obama’s Enthusiasm Gap” is featured prominently on the New York Times homepage as I write, below the Ralph Lauren ads and feature about a Pennsylvanian high school’s underdog football team.  In determining what’s “fit to print,” triviality seems to be one of the crucial considerations.

A more serious analysis of Obama might start, for example, by observing that his “enthusiasm gap” failed to materialize as he drafted lists of people to murder.  It also was mysteriously absent when he stood firmly behind the Honduran coup’s leaders, two of whom graduated from the School of the Americas (SOA) at Fort Benning, Georgia.  Renamed the Western Hemisphere for Security Cooperation (WHINSEC) in 2001, the name-change was, predictably, just a rebranding.  Nico Udu-Gama, one of the leading activists working to close the institution, emphasized recently on Al Jazeera that the school’s graduates have continued to violate human rights over the past decade.  This is the main reason why Udu-Gama and others organize for School of the Americas Watch, and currently are gearing up for its annual demonstrations at Fort Benning the weekend of November 16-18.

Returning to Honduras, we see that conditions there are beginning to call to mind those of, say, El Salvador in the ’80s—good news, perhaps, for aspiring financial executives eager to launch the next Bain Capital.  But as the business climate improves, everyday life for Hondurans working to secure basic rights has become nightmarish.  Dina Meza’s case is just one example.  A journalist and founder of the Committee of Families of Detainees and Disappeared in Honduras (COFADEH), Meza received two text messages from the Comando Álvarez Martinez (CAM) last February.  The group, named for an SOA graduate, threatened her: “We are going to burn your ‘pipa’ (vagina) with caustic lime until you scream and then the whole squad will have fun.”  The follow-up warning told her she would “end up dead like the Aguán people,” referring to the poor campesinos that are being slaughtered on land owned mainly by Miguel Facussé, one of the richest Hondurans.

Conflicts over land, to be sure, are nothing new in Central America.  The most recent government-led assault on Honduran farmworker rights can be traced back to the 1992 Law of Agricultural Modernization.  International finance lobbied aggressively for that decision, which reversed the limited land reform implemented in the preceding decades, and drove the desperately poor into city slums or out of the country, inspiring those who remained to form self-defense organizations.  The Unified Campesino Movement of Aguán (MUCA) is one of these groups.  With the help of Antonio Trejo Cabrera, a human rights lawyer, the campesinos recently won back legal rights to several plantations.  On September 23, Trejo took some time off to celebrate a friend’s wedding at a church in Tegucigalpa.  During the event he received a call, and stepped outside to take it.  The gunmen were waiting for him.  They shot him several times, and he died soon after arriving at the hospital.  “Since they couldn’t beat him in the courts,” Vitalino Alvarez, a spokesman for Bajo Aguán’s peasants, explained, “they killed him.”  They killed Eduardo Diaz Madariaga, a human rights lawyer, the following day, presumably for similar reasons.

It is in these conditions that Honduras has been opened for business.  The American economist Paul Romer proposed recently that several neoliberal “charter cities”—complete with their own police, laws, and government—be built there, and an NPR reporter recently reviewed this idea enthusiastically in a piece for the New York Times.  But despite much misleading discussion of what is considered Romer’s bold entrepreneurial vision, his plan is directly in line with longstanding US goals for the region, as the constitutional chamber of Honduras’ Supreme Court explained recently.  Voting 4-to-1 that the charter cities are unconstitutional, the judges concluded that Romer’s plan “implies transferring national territory, which is expressly prohibited in the constitution;” worth recalling is that Zelaya was thrown out for allegedly violating the same document.  But this fact and others are considered beyond debate this election season, an indication of how much change we can expect, regardless of November’s winner.

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Thousands hold demonstrations against journalist killings in Honduras

People protest violence against members of the media with signs that read in Spanish “United for peace and freedom,” left, and “Stop corruption” in Tegucigalpa, Honduras, Friday, May 25, 2012.

Press TV – May 26, 2012

Thousands of people have taken to the streets of many cities across Honduras to protest the killings of journalists in the Central American republic.
The demonstrators, who were chanting “Killing journalists does not kill the truth,” marched past the offices of the president and the human rights commission in the capital Tegucigalpa on Friday, AFP reported.

According to organizers, some 5,000 people attended the demonstration in Tegucigalpa, but protests were also staged in San Pedro Sula, La Ceiba, Comayagua and Choluteca.

“No more impunity,” said one sign held by an activist. Another sign read, “United for peace and freedom.”

Since President Manuel Zelaya was toppled on June 28, 2009 in a military coup twenty journalists have been killed in Honduras.

Last week, the body of 47-year-old HRN Radio journalist Alfredo Villatoro Rivera was found blindfolded and with gunshot wounds to his head, a police spokesman said.

A week before Rivera had been kidnapped.

Honduras has been plagued by political turmoil following the 2009 military coup. Military rule, corruption, an enormous wealth gap, crime and natural disasters have turned Honduras into one of the poorest and least secure countries in Central America.