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Liberland Shows How Honduras Can Attract Job Creators

By: Contributor - Apr 19, 2015, 6:40 pm

EspañolA most extraordinary thing is happening in the former Yugoslavia right now. A purported micro-nation has sprung up, and is attracting huge interest. Liberland is a three-square-mile territory on the banks of the Danube between Croatia and Serbia. This small plot of land at present has no clear claim from either country, and Czech Libertarian politician Vít Jedlička has stepped up to claim it as Liberland.

The new micro nation of Liberland has aleady attracted 160,000 applications for citizenship. (Students for Liberty CZ)
The new micronation of Liberland has aleady attracted 160,000 applications for citizenship. (Students for Liberty CZ)

Even by Mr Jedlička’s own admission, this started as somewhat of a publicity stunt. What’s more, there is as yet no constitution, and it mustn’t be overlooked that at any moment Croatia or Serbia could attempt to claim it as their own.

Yet, despite these problems, the response has been immense. At the time of this writing, they claim over 160,000 applications for citizenship, in just five days. Judging by the buzz on social media and coverage from the mainstream press, this could well be true.

These are the kind of numbers that make marketers salivate; a rapid viral growth in interest must indicate some kind of pent-up demand. And if there is a pent-up demand, then there must be some kind of potential for a product. If the product exists, sell it, and if it doesn’t, make it.

The response to Liberland must indicate that the current crop of nation states are so heavily indebted, draconian, or just all-round badly run, that a significant proportion of people are looking for an alternative. Further, some of them are willing to put time, money, and effort into that alternative, and the 160,000 people are the earliest of early adopters — pre-adopters really.

Are the ZEDEs in Honduras a suitable product for this vast group of exiters? It appears the project is not designed to meet this demand; rather, the sole promoted intention looks to be to attract large sums of foreign direct investment for development.

There is some surprise, and some concern, that foreigners — some of whom may hold seemingly outlandish ideas — even want to come to Honduras to live. There are concerns of gated communities, off limits to Hondurans, and unjust exploitation of labor or resources. Ironically, many Hondurans are suspicious that this is some kind of land grab, by the same countries that the exiters want to leave.

So, that’s it, we should disconnect the idea of exit with the idea of the ZEDE? I don’t think so. The Organic Law of the ZEDEs gives a great deal of autonomy to the zones, and specifically permits them to be “autonomous cities.” Within the framework of the law, it is possible to create a ZEDE that is sufficiently attractive to many exiters.

Is it also possible to assuage the fears of Hondurans?

Perhaps we can find an answer to this by looking at the Liberland model. While the number of Liberland applicants may be over 100,000, they will only accept 3,000-5,000 individuals. The law of the ZEDE says those managing them can “Establish agreements of coexistence with people who wish to live or reside freely within their spatial ambit of competence.”

Such agreements sound a lot like a citizenship to me. As with Liberland, it opens scope for selection of foreign citizens. Employers within a ZEDE must give 90 percent of their jobs to Hondurans, and residency for foreigners could be decided by questions such as “how does your presence in the ZEDE create at least nine jobs for Hondurans?” Residency would go to those who answer that question in the most compelling way.

Then if a ZEDE accepts 1,000 such exiters, it has created at least 9,000 jobs for Hondurans, and jobs are what each ZEDE is set up to provide.

In some ways this is better than attracting large-scale FDI projects. One large employer may go bust or bow out. On the other hand, it’s unlikely that 1,000 small-scale employers will fold.

There is no reason why this could not be done by a developer before submitting a ZEDE plan for approval. A ZEDE developer could then make his application for approval with a thick wedge of job-creating plans.

Then the final question is this: if this is a good idea, then why aren’t we doing it right now?

Edited by Fergus Hodgson. Note: the author has requested anonymity for safety reasons.