A private libertarian city in Honduras

Próspera Inc. is creating a voluntary free market mini-state inside one of Latin America's poorest nations.

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"Próspera is the first time in human history that a group of people has said there's a way to deliver governing services, privatized for profit in a completely free market way," says Joel Bomgar, a Mississippi state representative and president of Próspera Inc., the company that's building a privately run charter city on the Honduran island of Roatán called Próspera Village.

In Honduras, about half of the population lives in extreme poverty, and gross domestic product per capita is 25 times higher than in the United States. And yet the country has abundant natural resources and is close to major shipping lanes.

The problem is governance: Nobody wants to invest in Honduras because the country has a long history of political instability, expropriating private land, and legal agreements that aren't particularly binding. Honduras is ranked 154th out of 190 countries in contract enforcement on the World Bank's Ease of Doing Business Index and 133rd overall in ease of doing business.

Narco gangs once made Honduras the murder capital of the world, and though crime has dropped in the last 12 years, life there is still extremely dangerous in comparison to the U.S., which is one reason so many Hondurans make the risky journey to immigrate. U.S. Customs and Border Protection has reported more than 73,000 encounters with Hondurans at the U.S.-Mexico border so far this year.

Recently, the country's politics have been especially turbulent: A president was ousted by the military in 2009, and another was extradited to the U.S. for drug trafficking.

The nation recently elected its first democratic socialist president, Xiomara Castro, who has called for a "refounding." She wants to rewrite the constitution to recognize that "the capitalist system doesn't work for the majority" of people. She's calling for electricity to become a "public good…and a human right" and is laying the groundwork for the outright nationalization of the entire energy sector. And she's spending billions on cash transfers.

"Every millimeter of the [Honduran] homeland that [capitalists] took over on behalf of the sacrosanct free market…was watered with the blood of the native people," said Castro, who ran on abolishing the very law that authorized Próspera and similar zones in Honduras, in a September 2022 speech to the United Nations. "My government has embarked upon a process of national rebirth and is bringing profound change."

Meanwhile, a group of foreign investors has embarked on its own "refounding" of sorts. They've started a radical experiment in private governance, which they hope will become a model for how to create prosperity in poor countries all over the world.

"The concept of free private cities and charter cities, specifically what Próspera is trying to do, is the most transformative project in the world," says Bomgar. "There's not a big financial hub in Central America. There's not a sort of Singapore of Central America right now. And so that's what we're trying to create."

Produced by Zach Weissmueller; edited by John Osterhoudt; camera by Jim Epstein; translation by María Jose Inojosa Salina.

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