A Zone for Employment and Economic Development (

Spanish Spanish might refer to: * Items from or related to Spain: **Spaniards are a nation and ethnic group indigenous to Spain **Spanish language, spoken in Spain and many countries in the Americas **Spanish cuisine **Spanish history **Spanish culture ...

: ''Zonas de empleo y desarrollo económico'', or ZEDE, colloquially called a model city) is a type of administrative division in

Honduras Honduras, officially the Republic of Honduras, is a country in Central America. It is bordered to the west by Guatemala, to the southwest by El Salvador, to the southeast by Nicaragua, to the south by the Pacific Ocean at the Gulf of Fonseca, ...

that provides a high level of autonomy, with its own civil code, while still subject to the criminal code of the Honduras government. ZEDE cities were planned in conjunction with Nobel Laureate

Paul Romer Paul Michael Romer (born November 6, 1955) is an American economist and policy entrepreneur who is a Seidner University Professor in Finance at Boston College. Romer is best known as the former Chief Economist of the World Bank and for co- ...

to attract investment in currently uninhabited parts of the country, or in municipalities that agree to be converted into ZEDE zones. Every zone was to be governed by a technical secretary, elected by a committee appointed by the

president of Honduras The president of Honduras (), officially known as the President of the Republic of Honduras (), is the head of state and head of government of Honduras, and the Commander-in-chief of the Armed Forces. According to the 1982 Constitution of H ...

. ZEDEs were inspired by

free trade zone A free-trade zone (FTZ) is a class of special economic zone. It is a geographic area where goods may be imported, stored, handled, manufactured, or reconfigured and re- exported under specific customs regulation and generally not subject t ...

s in

China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...

(

Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...

Macao Macau or Macao is a special administrative region of the People's Republic of China (PRC). With a population of about people and a land area of , it is the most densely populated region in the world. Formerly a Portuguese colony, the ter ...

Shenzhen Shenzhen is a prefecture-level city in the province of Guangdong, China. A Special economic zones of China, special economic zone, it is located on the east bank of the Pearl River (China), Pearl River estuary on the central coast of Guangdong ...

Shanghai Shanghai, Shanghainese: , Standard Chinese pronunciation: is a direct-administered municipality and the most populous urban area in China. The city is located on the Chinese shoreline on the southern estuary of the Yangtze River, with the ...

South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia. It constitutes the southern half of the Korea, Korean Peninsula and borders North Korea along the Korean Demilitarized Zone, with the Yellow Sea to the west and t ...

( IFEZ),

Singapore Singapore, officially the Republic of Singapore, is an island country and city-state in Southeast Asia. The country's territory comprises one main island, 63 satellite islands and islets, and one outlying islet. It is about one degree ...

and in part the Free Private City model. ZEDEs originated in the government of

Porfirio Lobo Sosa Porfirio Lobo Sosa (born 22 January 1947) also known by his nickname, Pepe Lobo, is a Honduran former politician, business administrator, and agricultural landowner who served as 37th President of Honduras from 27 January 2010 to 27 January 2014 ...

; the first draft of the law was in 2011, but the necessary legislation was not passed until 2013. The ensuing

Juan Orlando Hernández Juan Orlando Hernández Alvarado (; born 28 October 1968), also known by his initials JOH, is a Honduran lawyer, former politician and convicted drug trafficker who was 38th president of Honduras from 27 January 2014 to 27 January 2022 for two ...

administration continued them. In 2022, Honduran president

Xiomara Castro Iris Xiomara Castro Sarmiento (; born 30 September 1959), also known as Xiomara Castro de Zelaya, is a Honduran politician and businesswoman who has served as the 39th president of Honduras since 2022. She is the country's first List of elected ...

began proceedings to repeal the 2013 legislation that enabled them. However, ZEDEs were created within a framework of 50 year sunset clauses and internationally binding agreements, to make them functionally unrepealable. Próspera takes the legal position that ZEDEs are "Built to Last", and have threatened to sue the Honduran government for $11 billion if it reneges on its legally binding commitments. It has also written to the US State Department requesting that the US "encourage" Honduras to respect its legal commitments.

History

The first attempt to create later became known as ZEDEs, the REDs (''Regiones Especiales de Desarrollo'' or Special Development Regions) was struck down as unconstitutional in 2011 by the

Supreme Court of Honduras The Supreme Court of Honduras (; CSJ) is the Supreme Court and Constitutional Court of Honduras. The Supreme Court is the highest judicial authority in Honduras. Structure, power, and duties There are four chambers — civil, criminal, const ...

. In September 2013, after amending the law, and after a change of 4 supreme court justices and a constitutional amendment, the law to create ZEDEs was passed. In September 2024, the Honduran Supreme Court declared zones for employment and economic development unconstitutional.

Objectives

ZEDE has the following objectives for economic development: # International logistics centres that permit the processing of goods at a grand scale (such as the Colón Free Trade Zone in Panamá). # International business courts that resolve disputes between both national and foreign business entities (such as the

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United Kingdom The United Kingdom of Great Britain and Northern Ireland, commonly known as the United Kingdom (UK) or Britain, is a country in Northwestern Europe, off the coast of European mainland, the continental mainland. It comprises England, Scotlan ...

). # Special investment districts that permit the creation of centres for the service sector (such as the Cayman Enterprise City,

Cayman Islands The Cayman Islands () is a self-governing British Overseas Territories, British Overseas Territory, and the largest by population. The territory comprises the three islands of Grand Cayman, Cayman Brac and Little Cayman, which are located so ...

). # Districts for renewable energy that permit investment in renewable energy (such as the

solar park A photovoltaic power station, also known as a solar park, solar farm, or solar power plant, is a large-scale grid-connected photovoltaic power system (PV system) designed for the supply of merchant power. They are different from most building ...

s in

Arizona Arizona is a U.S. state, state in the Southwestern United States, Southwestern region of the United States, sharing the Four Corners region of the western United States with Colorado, New Mexico, and Utah. It also borders Nevada to the nort ...

, United States). # Special economic zones in which the laws that govern the economy will be different from the rest of the country. National laws might be suspended in favor of solutions based on a

free market In economics, a free market is an economic market (economics), system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of ...

. Compare

. # Zones subject to a special judicial system that function under a judicial tradition different from the usual (such as the courts in the financial districts of

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that are subject to

Common Law Common law (also known as judicial precedent, judge-made law, or case law) is the body of law primarily developed through judicial decisions rather than statutes. Although common law may incorporate certain statutes, it is largely based on prece ...

). # Special agro-industrial zones that permit incentives for exporting high-quality agricultural products (such as the cultivation of

asparagus Asparagus (''Asparagus officinalis'') is a perennial flowering plant species in the genus ''Asparagus (genus), Asparagus'' native to Eurasia. Widely cultivated as a vegetable crop, its young shoots are used as a spring vegetable. Description ...

Peru Peru, officially the Republic of Peru, is a country in western South America. It is bordered in the north by Ecuador and Colombia, in the east by Brazil, in the southeast by Bolivia, in the south by Chile, and in the south and west by the Pac ...

). # Special tourist zones that permit special conditions for creating centres for tourism in undeveloped parts of the country.

Projected impact

Economists at the

Universidad Francisco Marroquín Francisco Marroquín University ( Spanish: ''Universidad Francisco Marroquín''), also known by the abbreviation UFM, is a private, secular university in Guatemala City, Guatemala. It describes its mission as "to teach and disseminate the ethical, ...

conducted an economic impact analysis examining how ZEDEs might impact the Honduran economy. They found that a ZEDE which resembles the growth rates of China's Special Economic Zones would reach $36,000 GDP per capita by 2050.

Current ZEDEs

* Próspera, Technology and Services ZEDE. It is located next to the village of Crawfish Rock on the island of Roatan. Prospera's Laws allow for expansion along coastal Honduras. On March 18, 2021 they confirmed the addition of an area near the Satuye area of

La Ceiba La Ceiba () is a municipality, the capital of the Honduran department of Atlántida (department), Atlántida, and a port city on the northern Caribbean coast in Honduras. It forms part of the southeastern boundary of the Gulf of Honduras. With ...

, labeled as "Port Satuye". * Ciudad Morazán, Low Income Manufacturing (''Maquila'') Employee Community and Industrial Zone. It is located near the city of Choloma in the Department of Cortes. Phase 1 of the development will entail in a gated low-income housing project. Phase 2 will create manufacturing areas within the gated community. * ZEDE Orquídea, in Choluteca, for the agricultural industry with the parent company Agroalpha. It is located at Las Tapias in the municipality of San Marcos de Colón. Agroalpha will construct a large greenhouse for cultivation of produce for foreign exports. ZEDE Orquídea has adopted the common law of the State of Delaware as its applicable private law. In April 2022, the Honduran Congress repealed the constitutional amendments and laws that created the ZEDE regime. However, the three existing ZEDE are grandfathered in for a period of 50 years, as per their Legal Stability Agreements, Article 45 of the ZEDE Organic Law, and the Bilateral Investment Treaty with the Government of Kuwait.

Potential candidates and failed ZEDEs

* Unnamed Peña Blanca ZEDE - Originally proposed as the first ZEDE with a focus in the agricultural sector. Peña Blanca was selected for its location near the agricultural and manufacturing region of Valle de Sula. The project ultimately failed to receive local support. * Unnamed Suyapa ZEDE - Religious tourism ZEDE surrounding Districto Central's Basilica de Suyapa. It failed to receive local support. * Unnamed Valle ZEDE - Distributed among the three municipalities of Nacaome, Amapala and Alianza. The Valle ZEDE was intended to function as an agricultural and logistics ZEDE, with the department's capital, Nacaome, serving as an agricultural research center, Alianza, on the border with El Salvador, as a logistics free trade zone, and the island city of Amapala as a megaport on the Pacific's

Gulf of Fonseca The Gulf of Fonseca (; ), a part of the Pacific Ocean, is a gulf in Central America, bordering El Salvador, Honduras, and Nicaragua. The waters of the gulf are shared among all three countries. History Fonseca Bay was discovered by European ...

References

External links

* {{Official website, https://www.hondurasprospera.com/copy-of-home
Design competition for ZEDEs by Zaha Hadid Architects
Autonomous administrative divisions Politics of Honduras Special economic zones Economy of Honduras Planned communities