The demonization of Honduras’s zones for employment and economic development (ZEDEs) by progressive politicians and organizations and the media is depriving Hondurans of job opportunities and safe living environments. Further, it has led to a costly lawsuit against the state and violence between citizens.
Progressives dishonestly portray the ZEDEs as undermining sovereignty, the rule of law, and people’s rights. The facts are precisely the opposite.
The Value at Stake
The ZEDEs—which promote free markets, competition, prosperity, and legal certainty—host around 3,000 direct jobs for Hondurans. Gabriel Delgado, cofounder and chief development officer at Próspera, explains that the Próspera, Morazán, and Orquídea ZEDEs employ 1,400, 1,000, and 600 individuals, respectively.
In addition, Jorge Colindres, technical secretary at Próspera, states that the ZEDE has invested more than $100 million in Honduras. Anyone can talk about attracting investment and creating jobs, but the ZEDEs have done it. They are way beyond proof of concept and have earned their day in the sun. Honduras would benefit from more ZEDEs, not fewer.
Many locals are getting jobs and creating businesses in the ZEDEs. Virginia Mann—a resident of Crawfish Rock, a village adjacent to Próspera on Roatán—told the Impunity Observer: “Próspera has had a huge impact on my life. It has allowed me to help my community … [to get a] job that is a 10-minute walk away from my home … and a salary that allows me to support my family. It has also allowed me to provide a better education for my kids.”
For Ursula Frederick—a resident of the Morazán ZEDE on the outskirts of Choloma, north of San Pedro Sula—the zone has provided a safe environment without extortion to launch her own business: a café. Frederick lost her job after the COVID-19 outbreak but found a new way to earn an income by selling coffee and pastries. In addition, she works remotely as a scheduler, which permits her time for the café.
Honduras’s Dire Need
Like most Latin Americans, Hondurans are desperate for employment. For evidence one can observe the ocean of migrants abandoning the country for greener pastures. As a US expat wrote, “Coming to Honduras looking for work is like going to the Sahara to look for water.”
According to the National Statistics Institute, Honduras’s poverty rate is 64.1 percent, among the region’s highest. Neighboring El Salvador and Guatemala have poverty rates of 29.5 and 55.2 percent, respectively. Further, 73 percent of Hondurans survive in the informal economy.
The lack of economic development should come as no surprise. The Council for Security and Justice, a Mexican NGO that advocates for peace, ranked San Pedro Sula and Tegucigalpa as the 42nd and 45th most dangerous cities in the world, respectively, in 2022.
This dire situation compels foreign investment with the rule of law as the foundation—precisely what the ZEDEs were designed to foster. However, thriving laissez-faire capitalism, without meddling from the central government, is humiliating to those bent on a socialist refoundation of the nation.
The Hostile Narrative
Progressives have joined forces to politicize the ZEDEs and undermine their presence—benefits to Hondurans be damned. Libre Party politicians have removed the legal route for creating new ZEDEs and harassed those that exist. That includes removing, without cause, their customs authorization. To rub salt into the wound, the incumbent socialist government has created events to condemn and intimidate the ZEDEs.
After a Progressive International meeting in Honduras of diplomats, academics, and local and foreign politicians on November 13, 2023, Deputy Foreign Affairs Minister Gerardo Torres announced the creation of the Honduras Resists campaign. The stated goal of the Progressive International-sponsored movement is “to convene allies from across the world to contribute to present the struggle for the democratic refoundation of Honduras [emphasis mine].” The movement rejects ZEDEs as an “attempt to privatize national sovereignty.”
Consistent with the Progressive International narrative, President Xiomara Castro has opposed the ZEDEs on multiple occasions. Her argument is that ZEDEs undermine Honduras’s sovereignty and violate human rights. The truth is that the zones run counter to her desire for a socialist transformation towards autocracy in her hands, flanked by her ex-president husband Manuel “Mel” Zelaya (2006–2009).
We Shall See You in Court
Aside from the economic loss from halting the ZEDEs, the state faces a lawsuit in international courts. In December 2022, eight months after the Congress repealed the ZEDE law, Próspera filed a $10.7 billion claim with the International Centre for Settlement of Investment Disputes against the country. Próspera did this to protect itself from the state’s violations of Honduran and international law, including possible forceful expropriations.
According to Erick Brimen, cofounder and CEO at Próspera, the organization wanted to avoid a lawsuit. However, Honduran authorities refused to cooperate towards an agreement without going to court. Brimen says Próspera is still open to dialogue with the Honduran government to reach an “amicable solution.”
High-ranking ZEDE officials note that the zones, at least in theory, have their operations guaranteed in Honduras for at least 50 years. However, the officials fear the unlawful expropriation of the zones.
Who Pays the Price?
Such expropriations would harm Hondurans. They would miss out on the First World safety and opportunity of the ZEDEs, which for decades the state has failed to provide.
Tragically, the politicization of the ZEDEs has led to violent confrontations between Hondurans who have become pawns in the regime’s game. In December 2023, the Castro regime flew around 60 officials to Roatán and organized an event to criticize Próspera and other ZEDEs. A conflict arose because Crawfish Rock residents who work at Próspera wanted to share their experiences and explain how Próspera had improved their lives. The event organizers would have no such thing, and both sides failed to remain calm. Punches flew and one person got injured.
Contrary to the rhetoric of progressive politicians and international organizations that allegedly advocate for human rights, the proof is in the pudding: the ZEDEs have attracted substantial foreign investment and are having a positive impact on people in nearby communities. Those who demonize ZEDEs and ignore the demonstrated benefits are more concerned about their precious socialist revolution than about the well-being of Hondurans.
This article reflects the views of the author and not necessarily the views of the Impunity Observer.
Mauro Echeverría
Mauro Echeverría is Econ Americas’ deputy editor. He holds a BA in international relations with minors in political science and anthropology from the San Francisco University of Quito. Mauro leads the research on local economic development at the Ecuadorian think tank Libre Razón.
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