Honduras economic development zones worry residents, experts

Row after row of gleaming new greenhouses are rising on fields just a short walk from the land where the family of Zonia Amparo Vásquez has grown corn and beans for four decades.

Construction began in January, but it wasn’t until June when locals learned their community was part of a controversial government initiative creating semi-autonomous economic development zones that are exempt from many national laws and taxes.

The peppers and tomatoes the greenhouses produce will be for export and other businesses are expected to someday arrive too.

President Juan Orlando Hernández, whose comments revealed the nature of the project to locals, promised the Agroalpha project would be be the largest of its type in Central America eventually creating more than 4,500 jobs in Las Tapias, a tiny settlement in San Marcos de Colon, a rural municipality of some 30,000 people near the Nicaraguan border.

Vásquez and others in Las Tapias say jobs would be welcome, but they are anguished by fear their property could one day be expropriated — something the law potentially gives such development zones the right to do.

“We’re afraid because no one has come to tell us what is really happening,” said the 64-year-old. Her daughter, 40-year-old Dora Elena Ramírez, said she has been losing sleep fretting over where they would live if they lost their land.

It's only one of many worries critics have raised about the Employment and Economic Development Zones, known as ZEDEs for their Spanish initials.

Inspired by libertarian and free-market thinkers as a way to draw foreign investment to the impoverished country, the zones were authorized by a law passed in 2013, when Hernández was president of the Congress

A 21-member “best practices” committee was created to oversee and help regulate the zones. It was, at least initially, dominated by foreign free-market advocates, including several veterans of the Reagan administration, U.S. anti-tax crusader Grover Norquist and Reagan's son Michael.

The zones are exempt from import and export taxes and can set up their own internal forms of government, as well as courts, security forces, schools and even social security systems. They administer their own sea and airports, if any, as well.

While the law says they must comply with most Honduran constitutional principles and international human rights agreements, critics say they basically create a separate state within a state, undermining the country's sovereignty.

Hernández has said that some 450,000 Hondurans need jobs and the ZEDEs can help generate them. He spoke before an artist's conception of such a future: dawn breaking over a gleaming city of towering skyscrapers and lush parks.

Backers have claimed that the zones would attract so much investment that the country's per capita income could multiply over just a few decades

For years, the idea seemed to have stalled, but Hernandez has pushed the idea and the Supreme Court recently knocked down legal challenges.

The reaction from business, religious and human rights groups was largely hostile.

The United Nations Honduras representatives warned that their creation "could mean serious risks to compliance with the general obligation of the Honduran state to respect and guarantee the free and full exercise of the rights of all residents without discrimination.”

The Honduran Council of Private Enterprise criticized the plan. The nongovernmental National Anticorruption Council petitioned Congress to repeal the law.

“The ZEDEs are the result of an illegal legislative and judicial process” that changes the form of government established by the constitution, the council’s Executive Director Gabriela Castellanos wrote.

Some warn the zones could become havens for criminal activity or those wishing to remain beyond the reach of the law.

Ramírez, Vásquez’s daughter, recalled that San Marcos de Colon Mayor Douglas Ordoñez had spoken earlier about a new business coming with jobs “for poor people so they wouldn’t emigrate to the United States, but he didn't say it was a ZEDE.”

Ordoñez said that’s because he himself didn’t know that until Hernández mentioned it on television in June.

Héctor Herrera, director of the nongovernmental Southern Platform Against ZEDEs, said that locals had told his organization that people from the industrial park had pressured them to sell their land or risk expropriation.

But Las Tapias communal leader Filadelfo Izaguirre said that while he had heard such rumors, no one had approached him about acquiring land. He has lived in the community for 48 years and said the 60-some families there would not easily part with their land.

“It would be a lie for me to say they had asked (us) to sell,” Izaguirre said. “But if that happens, we are going to defend our land and there could even be deaths.”

Victor Wilson, an investor and promoter of the industrial park, said there was no intention to expropriate property.

“Right now we are generating 500 jobs and our goal is to generate more than 2,400 jobs in San Marcos de Colon,” Wilson said. “This investment would not have happened without the ZEDE because the process is more agile and allows approval in 60 days.”

The normal process could take four years to start a project, he said.

“I think the issue of the ZEDEs is being distorted,” Wilson said. “A state within a state, that’s false. It’s negative emotionalism to achieve an objective, in this case the elimination of the ZEDEs.”

A perhaps more ambitious ZEDE off Honduras’ northern Caribbean coast also has roused local protests. Residents express similar fears about possible expropriation, especially for the Indigenous inhabitants of the Bay Islands. Those behind the Prospera ZEDE on the island of Roatan also deny any intention to seize property.

Promotions for Prospera depict futuristic apartments overlooking the sea and promise a place with "key checks on governmental power, a bill of rights protecting people of all income levels and a straightforward structure for doing business.”

But Vásquez and her neighbors in Las Tapias are unnerved by the prospect of business interests with their own security forces enforcing their own rules.

“We agree with creating more jobs, but talk of pushing us out, it’s not so easy,” she said. “When someone touches your things it’s delicate and we are going to defend ourselves.”