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The Future of Próspera with Humberto Macias
The full transcript is available below.
In this episode of Caribbean Progress, Rasheed speaks with Humberto Macias, who previously served as the Deputy General Counsel of Honduras PrósperaThe promoter behind Próspera ZEDE. Being one of the first team members to relocate to Honduras for this tremendous project, Rasheed and Humberto discuss the growth of Próspera thus far and Honduras’ varying demographics. They dive into the details of the recent repeal of the ZEDE laws by the Castro administration and the affects this might have on foreign direct investment to Honduras. They also discuss why Próspera will remain resilient even amidst the changing political environment.
ICSID - International Centre for Settlement of Investment Disputes
ZEDE - Zonas de Empleo y Desarrollo Económico [Spanish] (Zone for Employment and Economic Development)
[05:45] Próspera’s Target Market
[07:05] The Diverse Population of Honduras
[09:30] The Legal Foundation of Próspera (The ZEDE Law)
[14:07] Dissecting the Views on the ZEDE Law and its Repeal
[18:49] The Implications of the Repealed ZEDE Law
[21:42] Explaining the Double Repeal of the ZEDE Law
[23:50] International Trade Treaties / The Kuwait Bilateral Treaty with Honduras
[26:28] Politicians Awareness Towards the Effects of a Repeal
[27:52] International Assumptions on The Próspera Project
[30:50] Reinstatement of the ZEDE Law
Contact Info: Humberto Macias
X (Twitter): @HumbertoNMacias
Email us at firstname.lastname@example.org
[00:04] Rasheed Griffith: Hi everyone! Welcome back to Caribbean Progress. A podcast of the Caribbean Progress Studies Institute. Today we will be speaking about Próspera ZEDE, in Roatan Honduras. It is one of the very few charter city projects gaining traction. You will be hearing the term ZEDE quite often in the episode. ZEDE is the short version for the spanish term Zonas de Empleo y Desarrollo Económico or Zone for Employment and Economic Development in english. This is the official term used in Honduras for this kind of special economic zone. Próspera, is staggeringly ambitious, and I want to dive into the nitty gritty details regarding its place in the constitution landscape of Honduras.
[00:48] My guest today is, Humberto Macias. He previously served as the Deputy General Counsel of Honduras Próspera. The promoter behind Próspera ZEDE. He was the first team member to relocate to Honduras, to build Próspera ZEDE and continues to reside in the country today. This is going to be a very fun episode, so please stay tuned.
[01:15] Rasheed Griffith: Hi, Humberto, and thank you so much for coming on the show to discuss Próspera. Its been one of those topics that comes up quite often. Anyone can talk about Charter Cities. So of course, its worth it to have like a more sustained conversation, just about Próspera.
[01:30] And Próspera of course is actually been there we've met in person in Próspera. Very nice location. So I had a first hand experience with the jurisdiction as well. But I want to just start with what has been the growth of Próspera from your perspective, obviously working there, working very closely with the development plan and the future plans. What has been the main highlights for you in the project so far?
[01:51] Humberto Macias: Well, Próspera has had pretty tremendous growth since it started. Most of everything got going around in 2016, when the team was beginning to prospect for land and engaging with discussions with the national government. And they were also meeting with local leaders and trying to explain the vision and understand the local priorities. And once that was done in 2017, and 2018, Próspera acquired local property so that it could serve as a physical footprint and legal incorporated that into the ZEDE regime and proposed a charter. So that was in 2018.
[02:22] In 2020, it continued developing the legal framework, and in May 2020 it officially launched. I arrived here in Honduras in 2019 in August, so right at the beginning of that process. In 2021, right around the time that you visited a little bit before you visited, there were 58 acres, and there were three buildings that were there on the property. Essentially, since that time, it's just experienced some pretty rapid growth. And that includes encompassing now over 1000 acres. I don't know if you've seen it on Twitter or anywhere else, but there's a new building Duna, the residential tower that's being completed. So that should be completed by the end of the year. It's a 14 storey residential office and retail space. So that's finishing.
[03:04] There's about 1000 e-residents now, from about 43 countries, and they're currently about 100 firms there. Companies, they span the gamut. So like, there's things like advanced fabrication technology, biotech, banking, and fintech, drone delivery, a montessori school. So there's been quite a lot that's been happening in these last couple of years. Right now, there's two more residential developments that are scheduled to break ground later in the year. And Próspera is also in the process of developing an industrial port in La Saba. What that's meant to do is bring high quality manufacturing jobs to Honduras, and also adjust the demand for quality nearshore facilities in Central America. So basically, what's been happening since 2016 until now. I think that the second question you were asking was what I've most enjoyed about the process.
[03:46] Rasheed Griffith: That's right.
[03:47] Humberto Macias: I arrived here in Honduras in 2019, in August, and I was the first person to actually come to work on the project. I continue to be in Tegucigalpa right now the capital of Honduras. And so I remember the first time that I ever saw Roatan just flying in. I was just so amazed by the beauty because you could see it as you're flying from the mainland. As you approach it, you can just see the blue waters all around. And then you can see where the shades of the coral are. I was just really amazed by that.
[04:10] And you know that first time I was the only one who was there, it was just me with the technical secretary at the time. The technical secretary is like the mayor of the zone. So we were the only ones there and he gave me a private tour and showed me around the island a little bit. But what's been really great has been flying back regularly and seeing the growth and meeting the people that are joining the team and that are also upcoming residents. Because every time that I've gone back, I've seen more and more talent, more and more people. It's a very vibrant community. So I think for me just watching that blossom has been probably the best experience.
[04:41] Rasheed Griffith: Fantastic. And yeah, I took that flight also from Tegucigalpa. No I came from, I think San Pedro Sula. And me growing up in the Caribbean, of course, the structure of Roatan feels very familiar to me. So I felt, obviously oh, this is just like, where I grew up. This is exactly what I pictured this would be. And coming in and seeing it, its just like any other Caribbean country essentially.
[5:04] And knowing that Próspera is actually doing this project there in Roatan, obviously gives me ideas about how this project could be done in many other Caribbean countries. Because we have this very similar structure. Even similar history in many ways. Also, I remember when I was there, you were very excited about the tower that was going to be started construction at a point very soon. When I went it was just essentially a hole in the ground just being dug out for the foundation base. And seeing from your Twitter, I actually see the structure going up now. I was like hey, I was there when it was just a, just an idea. So even for me seeing it, it's kind of very cool also.
[05:36] Humberto Macias: I agree. Just watching as it gets higher and higher. And it's the tallest structure in the bay islands. It's two times taller than anything else. So it's got incredible views from the top of the building.
[05:45] Rasheed Griffith: Yeah, I’m sure. I’m sure it does. Tell me, how many people are living at least, partial time, in the zone currently.
[05:55] Humberto Macias: I don't know exactly. Because there's a lot of people that come in and out of the zone. So you see activity, but it's hard for me to know exactly how many people are there. But what I do know is that the intention is that Dunis is supposed to be the foundation for e-residents to be able to move in and start creating community. Right now there is existing infrastructure, there's restaurants, a country club, there's different shops, there's a golf course, a hotel. They are businesses there, there's villas. I think this is meant to really create a foundation for people to move in and start working and living there.
[06:20] Rasheed Griffith: Yeah, because that was one of the questions I had for you and some of the other Próspera team when I went that time, because there were in Pristine Bay, there were these very nice houses. People can't really afford these, in most cases. Just by you mentioning the new tower, and some of the types of towers that are going to be built, what's the price range for either rent in the new towers that are being built to give people an idea of the different price comparisons?
[06:42] Humberto Macias: Basically, this first tower is meant to be for young working professionals. And for purchase, if I'm not mistaken, it's about 80,000 to about 200,000. Besides that, there are additional projects that I mentioned that there's two more developments that are coming along. The price points for those are a little bit higher. So this one is meant to be primarily for young professionals that are moving into the zone, starting businesses or working with other companies overseas.
[07:05] Rasheed Griffith: Is the primary target audience, international people or lets say mainland Hondurans, upper middle class and so on, or is it a mix of both?
[07:14] Humberto Macias: For this one here, for the first one for Duna?
[07:16] Rasheed Griffith: Yes. the first one. Yeah.
[07:17] Humberto Macias: It's a mix. The target market is people interested in the zone. And I think because there's a wide diversity in that, it's hard to say that it's focused on just foreigners or just Hondurans. When I go back there, I see primarily Hondurans in the zone. That's largely who is working there, and who's doing a lot of the different projects. But as it builds up, we do expect that there'll be more foreigners coming in. And usually the foreigners that I see usually they're there for shorter events, or to visit, to work on specific projects. But the idea is to grow that.
[07:44] Rasheed Griffith: Also, this is a minute point, but something that I was surprised by. So when I was there in the zone, I remember I was seeing some people, and you were saying, Hey, these are some Roatan people. In my mind, I am like, they are white. Are you sure? [Laughs] But because of the historical difference between Roatan and mainland Honduras, Honduras actually does have a different makeup population, actually black and white and so on. And just by seeing the people in Roatan, you get a bit confused. Sometimes when you see a picture, you might think Oh, these are just for foreign people, but they actually are just people who are born and raised in the Roatan.
[08:15] Humberto Macias: It's very diverse because it has the original inhabitants who were white, British, and blacks. You know, and then you start getting in, there are mestizo Hondurans that start moving to the island. I suppose there were also the original indigenous people. I don't think there were any left when everybody was coming in. And then you start getting waves of different types of foreigners. So it's a very diverse Island.
[08:35] Rasheed Griffith: Yeah, and also the language Roatan speaks English. I am not sure if primarily, but most people who grew up in Roatan speaks English. As even their default language as also a very big surprise to most people thinking it’s in Honduras, therefore, of course, Spanish but Roatan was a particularly special area where it was actually a British colony for a long time. So you have that English legacy as well in Roatan. Making it a very unique location, even in Honduras.
[08:59] Humberto Macias: Yeah, just because it was a British colony, you do have that. Because you have the colonial legacy, you do have a lot more British thought in the population. You have a lot of different groups who speak English. So in some ways, it's quite Western, more Western than mainland Honduras. I myself when I arrived, I didn't realise that there would be such a big difference in cultures, but the other 17 departments of Honduras, they're more like of a Spanish indigenous mix. So you have that mestizo background for the mainland, and in the bay islands, and Roatan is one of those bay islands, is a little bit different than the rest of the country.
[09:30] Rasheed Griffith: So I want to go back a bit to the legal foundation of Próspera, because that has recently caused some issues when it comes now to the new Castro administration of the government in Honduras. Where recently the Castro administration, Xiomara Castro, the new President and the Congress decided to repeal the law that essentially created the regulations for the ZEDE projects like Próspera, to exist.
[09:56] And one of the issues that they said was that the original ZEDE law ,was passed in a time where it was post constitutional crisis in Honduras, and therefore, now it’s time that the administration has to begin what they consider to be legitimate grounds in their governance. They want to repeal the law. Before we get to that however, I want to say, What's your take on the original law being passed? What's the contents of it? Why did it happen? And do you think that kind of argument from the Castro administration actually has some kind of legal standing when it comes to the process for repeal?
[10:31] Humberto Macias: I don't remember if I mentioned to you, but I started working on the project in about 2011. So at the time, I lived in Singapore and so I met these different Honduran political figures that came to Singapore to learn about the country from what I understood and what I understand better now, there was a political crisis in 2009, that frightened away investment and they wanted to look for ways to spur social economic development in the country.
[10:53] And there were a group of Hondurans who were looking out at the world and they saw that there were models that had been quite successful internationally and when you think about these, particularly about Hong Kong, and then after that Singapore and then after that Dubai. So they're looking at these, they were also looking at Songdo in South Korea. And so what they wanted to do was create a legal space for something like that, in Honduras.
[11:16] So that was really what motivated these legal advancements, they wanted to create the legal space for something like this and partially what you see, not just in Honduras, but in a lot of Latin America, you have these entrenched interests that make it very hard to change anything. So the idea is that you had a clean slate, where you can recreate this without these entrenched interests, not interfering, and just giving it a space to thrive. And you can create something pretty amazing in Latin America, that was the context.
[11:39] So I met them, because one of the things that they were doing was they went to go look at these special economic zones in Asia. And I happen to live in Singapore at the time, I lived there for about 10 years. And so I had the opportunity to meet them. For my time living in Singapore, just seeing the dramatic changes. I was a believer from day one, that this can be done, at least that it was possible. But I do understand that I think when you're looking at the history of Latin America, that's part of what complicates development for the entire region, because you end up going from left to right, from left to right.
[12:06] When you make that transition, usually what happens is the new powers want to destroy everything that the old administration created. So you just never advance because you make progress for years in one direction and then you destroy that. And then you move in another direction. And it's very hard to advance. So one of the reasons that they create the ZEDE regime, the way that they did is that they wanted to give it the strongest legal protections, because they knew that given the history of the country, there would be these variations. And so what they wanted to do was create something that even when new administration came in, that was moving to the left, that it would have the legal protections to withstand that and give it the time and space to prove that it can work.
[12:42] It's not at all surprising when the new administration came in, and their intention was to repeal this. That was entirely expected when this was created. What you see in the country right now is that it's a Socialist Party who won the elections. And now what it seems to be doing is trying to solidify its control over the country and doing this through governmental intervention and expropriation. And like the energy sector, for example, special tax regimes, autonomous zones, agro industry, you see that process.
[13:08] And what you see, here in Tegucigalpa right now, what I can see from here, is that there are a lot of interventions and interferences with government, and they're just deficiencies in public services. And this framework was specifically created to protect against those types of changes just to be able to give this space to grow and prove itself. And once you're able to prove that this can function, then you can begin adopting the same types of policies in the rest of the country so that you could spur the same type of change. A little bit like what happened with China and Hong Kong and Shenzhen, and then spreading the special economic zones to the rest of the country, to disperse Prósperaity, it's a little bit like that with what this was intended to do, and the way that it was created.
[14:07] Rasheed Griffith: I get that the general left wing governments usually have very curious economic policies, often quite bad economic policies in general. But the basis from which the Castro administration has campaigned and essentially pushed the repeal of ZEDE laws is hard to comprehend. I don't really follow the argument they're making. Of course, the main argument is the ZEDE law essentially takes sovereignty, of course, never really defined, take sovereignty away from the Honduran administration, and gives it to this category of non Hondurans. Of course, you don't actually explain how that happens. They don’t actually explain what example of this have occurred, they just make the statement and move on.
[14:50] And that has been a substantial political rallying call during the campaigns and so on. I understand why that is an appealing political tactic for the electorate who is not particularly super well versed in national foreign policy and international foreign law. But what I don't get is why the Congress was so willing to repeal the law. And there was a unanimous vote, if I remember, to repeal the ZEDE law. What's the political context and misunderstanding why National Congress was so willing to repeal these kind of laws which are very clear indications of economic progress potentially, for Honduras?
[15:24] Humberto Macias: One thing that is important really kind of understand is that there's really two points. One, I think that there were a lot of attacks against the ZEDE regime. And that's partially because it was associated with the last president. And so there were a lot of attacks based on that. But what I saw was a lot of misinformation. I saw a lot of blatant lies. And so for people that aren't actually within the zone or around the zone, it's hard for them to personally verify what's happening. And so when you're reading about these things, and especially in a population that has very low academic levels, it's very easy to misinform, and to manipulate the population. And that's what I saw here, in this case. You would see that there were concerns that were based on disinformation and these blatant lies.
[16:06] Another thing that I saw during this process is that usually you would see a very small groups of people that were very loud. It makes it appear that there's more opposition to this, but when you actually look at the polls from around the campaign time, this was actually something that was of much lower interest to the population. What they really wanted was things like security, and they wanted things like jobs. And so this was much slower, but there were some people that were quite loud and it was a very small minority. That's what you would see sometimes in the media.
[16:34] So I think there was that perception that there was opposition to the ZEDE’s. I think you need to kind of consider those two factors. When the new Congress came in, they were seeing some of these different things going on. So what they did is they decided to vote to repeal, when you actually look at the context of that repeal is that it wasn't something that everybody that voted for it to repeal, it was interested in destroying them. Some of those people that voted for it understood that the three ZEDE’s that were existing had acquired rights and would continue. Some of the people that voted to repeal it, their expectation was that during the, in Honduras, you have to do the repeal, and then a year later, you have to ratify it.
[17:09] And so their expectation was that within that year, the current administration would negotiate or would come up with some alternative, some solution, for these existing businesses to move into those zones. But that just haven’t happened. And there was a lot of emotion in a very polarised country at around the time of the election. But when you look at the situation now, you look at the ratification and it hasn't happened. There doesn't seem to be an appetite for it to pass. And I think it's because things have changed during that process. When you look at the vote for that. I think things have changed significantly since then.
[17:37] Rasheed Griffith: Is there another reason or another context why the Congress was so willing to repeal these ZEDE, the ZEDE organic Law? Was it just because they wanted an easy political win, to put it that way? And then why was it that the Congress was so overwhelmingly supporting the Castro administration's need to repeal the law where before I saw that it was some contests where when the laws originally passed, it was not super strongly supported by the National Congress at the time, but because there was some few, really key players in the law being pushed by the Hernández administration, that's why it went through. But it seems so very strange that the Congress was a unanimous vote against the ZEDE rule.
[18:20] Humberto Macias: I don't understand the internal dynamics of the Honduran Congress very well. But what I have seen is when they passed the ZEDE law, it actually I don't remember if it was unanimous or just near unanimous, but it was very strong approval for the ZEDE regime. And I think partially what it has to do is the fact that this country is very polarised and it goes to extremes. So I think related to that is why you see these big changes in votes. But if you look at the situation now where they would have needed to ratify that, and that hasn't happened and I think it's partially because the situation has changed since then.
[18:49] Rasheed Griffith: So now that the ZEDE organic law has been repealed, what is the actual implication of that being repealed? It doesn't mean that Próspera automatically has to stop operations. Clearly, that's not the case. But what actually is the legal ramifications and legal effect of the ZEDE law being repealed by the Castro administration, this is last year.
[19:08] Humberto Macias: I think the legal effect for Próspera is, quite minimal, because of the protections that were created. When you think of every type of legal protection that you could provide to the ZEDE framework, that was done. So there's at the constitutional level, the fact that the Constitution was amended so that you can include the ZEDE regime within that, legal stability agreements, international trade agreements. So because of that, there's a very strong framework. And I think when somebody is analysing those legal protections, it gives them confidence in how strong the framework is, it's the strongest one in existence in the world.
[19:39] I think it's understood that Latin America can be a difficult business environment. And so you need strong legal protections to foreign direct investment. I think that is the first initial thing. When you look at what's happening at the level of the administration, at least what I see here is that once in a while there are radical elements of the administration that will make anti ZEDE comments. It usually hasn't moved beyond that. And I think sometimes it's been because they're more isolated elements. Sometimes there's been because there's been some education that kind of helps them understand the legal protections and so then they kind of take a step back, but there has been an impact.
[20:11] When you look at for example, before this, an Honduran legal entity could have access to Honduran banking. And since then, that's been blocked. Also Próspera has, because of the type of zone it is there was basically special customs processes for imports and exports out of the zone. And that's also been blocked. So there has been an impact, I think, at the legal level in terms of things that are tangential to the framework of things where the national government is required to connect with the ZEDE framework.
[20:37] I think at that point is where you've seen some impacts. Also, what you hear in the media, at least when I'm here, especially at this time in the country, I don't know if you've been seeing the news. I think, as of like yesterday, there were about 27 massacres in mainland Honduras. There are severe energy shortages, so there's blackouts throughout the country, particularly in the North. They started doing a curfew. And actually it starts today in San Pedro Sula, which is the economic heart of the country. When you start seeing that there's so many problems in the country, this issue just becomes second. It loses a lot of priority, because there are just real basic problems that the country is facing.
[21:09] Rasheed Griffith: Yeah, I’ve been seeing these, news stories but I guess a better term is hit pieces, even from the international organisations. Thats why it is even more surprising in some ways. Various left wing organisations about the quote unquote, problems of special economic zones in Honduras particularly Próspera and so on. And I read them, or watch them, and it is very surprising because what they are saying is literally false. Because like even I don't know that much about Próspera myself, but I've been there, talked with some people there and so on.
[21:42] So even those basic things they are saying, Oh like, they have their own police force and this and that. That's not granted in the laws. So these hit pieces go to very wild accusations about Próspera. I think that really also doesn't help in terms of the marketing of the project in Honduras. But even before we go there. I know, there's some stuff to ask there. When it comes to the repeal of the ZEDE law, is it true that it has to be done essentially twice. Where it has one vote to repeal, and then another Congress that has to also be repealed again. Did that happen twice or was it only one time?
[22:12] Humberto Macias: You're correct. When I mentioned that they tried to provide the ZEDE regime with every legal protection that they could, one of them is that they amended the constitution so that the ZEDE regime could be within that. There are a couple articles of the Constitution that was articles 294 and 329, that were amended to create a legal space for the ZEDE regime. And by doing that, what that requires, is to have an amendment to the Constitution, you need to first repeal and then you need to ratify that repeal in the second congressional session.
[22:39] And part of the reason they do that is because there is a lot of polarisation in the country, and the situation is quite fluid. And so what they want to do is make sure that any changes aren't to very unique situations that are happening in the country, and that there's an extended support for that. So that was one of the legal protections for the ZEDE regime. Yes, it was repealed, but then it was not ratified, and it hasn't been ratified since Congress began this last session.
[23:00] It was one of the things that I was mentioned to you before that there was that initial vote, but as time has progressed, and I think there were different reasons, so I can't speak to why any individual Congressman voted the way they are, there are things that I've heard, but what it seems to be happening is some of the expectations that they had weren't met during the year now, there's been a change of opinion about that. So that hasn't happened. And that was one of the legal protections that was provided to the ZEDE regime.
[23:24] Rasheed Griffith: There is another argument I've heard that it regards to, is it the Kuwait bilateral treaty with Honduras, where it changes the baseline for essentially treaty reforms. Where it is has to have at least a minimum of 50 years before you can actually repeal these fundamental treaty adjustments in the constitution or essentially the foreign investment. Because Próspera, obviously account for the large foreign investment, then that baseline should also be applied to Kuwait. Could you explain what that means? If I even have that correct.
[23:56] Humberto Macias: Yeah, you're correct. So basically, what a lot of the international trade treaties include is a most favoured nation status. So like, for example, with Castro, which is the agreement with the US, Central America and Dominican Republic. There is that type of protection. And so what that seeks to do is all of these countries are trying to ensure that if a foreign investor is coming into one of those countries, they won't get better treatment than anybody who signed the agreement.
[24:19] So in this case, for example, like if you're an American investor, because of CAFTA, you're guaranteed that you could have this most favoured nation status. And so you have these protections. But if something more is given to another foreign investor, you also get the same rights and protections. And so what was done in this case was there's that bilateral trade agreement with Kuwait that specifically and expressly protects the ZEDE legal regime.
[24:41] This provides us 50 years of protection. And so because that is granted to Kuwaiti investors, because of the most favoured nation status, then it's also granted to American investors, those from Dominican Republic, so the other countries that signed to that agreement. So that's basically how American investors get those protections.
[24:56] Rasheed Griffith: Do you know why there is that long period granted to the Kuwait investment treaty in the first place?
[25:02] Humberto Macias: When you look at how long it takes to develop any one of these zones, they're not things that happen overnight, and you can make rapid progress, but to be able to move from Hong Kong in the 50s, to what you see now, you know, it took considerable time. Maybe about five decades. Singapore was something similar.
[25:18] They gained independence in 1965 and it took quite a long time for it to develop to the time that it's at, to what it's like now. And so you do need this time, you do need this consistent policies to be able to grow something like that, if you're granted a lower amount of time, then it's just going to be very hard to really create that vision. So that was why these are long term protections.
[25:36] Rasheed Griffith: So why Kuwait? Kuwait also has an investment in Próspera in a separate ZEDE, or was there some potentiality of investment from Kuwait or a Kuwait company?
[25:45] Humberto Macias: I don't know this directly. And I've heard this from different people that I've spoken to in the time that I've been involved, but it does seem like there's been a lot of interest from different types of investments, including Middle Eastern ones. So that was the reason for that. There was the hope that could create a way to channel Middle Eastern and Western to Honduras.
[26:02] Rasheed Griffith: When this information about the treaty agreements about Honduras and a time period and the more favoured nation clauses in the treaties. Does this give the Honduran politicians more pause when it comes to being so negative about these ZEDE projects and also being in favour of having it repealed and leave Honduras because it seems like this will open up Honduras to quite substantial damages when it comes to these kind of laws that there are kind of repealing in a very abrupt fashion. Does that give them pause, or do they just become indifferent to these activities, given the facts about the treaty agreements?
[26:38] Humberto Macias: I do think that gives them pause. For example, you were asking a little bit earlier about why when they repealed it, it was unanimous. And there's been a change since then. One of the reasons is that that I think they became aware of things like that, then they realised that it's not something that's going to be beneficial for the country. I do think that for some elements that has given them pause. I think for some elements that, that has not given them pause.
[27:00] Especially some more on the radical side, and I don't think it just applies to Próspera. If you look at the arbitral tribunal, where actually the centre where these disputes are, are being heard is ICSID, so the World Bank's ICSID. And Próspera is one of the seven disputes now that state of Honduras has there, and six of them arose during the time of the Castro administration. So it hasn't just been ZEDE’s like it's just been a general approach to all types of investments and all types of businesses.
[27:26] Rasheed Griffith: So now, I kind of mentioned it just before this, there's a lot of civil society pushback, it seems to be mostly internationally from what I can gather, about the Próspera project in a Roatan in Honduras. What's the usual arguments that these organisations try to use to talk about why Próspera is not good for, they always say, the people of Honduras. What is their main argument path for trying to essentially give Próspera a very bad name in the global standing?
[27:53] Humberto Macias: I think it depends on who these actors are, because they focus on different things. Like, for example, you do hear concerns about sovereignty, or you do hear concerns about democracy, you do hear concerns about the environment, about indigenous peoples rights, about labour rights. So those are the things that you do hear, based on my experience and knowledge of Próspera and the country, I might disagree with all of those.
[28:14] I do think that at the national level, sometimes it's due to misinformation. Sometimes these views are based on just blatant lies. I do think at the international level, that there are highlights and different actors that repeat these, but that actually have never been to the country and really don't understand. I've seen panels, and I've seen articles, and I often will respond to the people and invite them to come visit me here in my home. And I will gladly show them in person, what the country is like, and what is happening in the jurisdiction. But up until this point, I have not had any one person accept.
[28:47] Rasheed Griffith: [Laughs] Of course. Yeah, that makes sense. Because every time I see or hear or read these arguments, I'm like, Yeah, but if you actually just go to Roatan, you would know that what you're saying doesn’t makes any sense. Granted they're reasonable arguments that one can make, if you don't say have a strong preference for that kind of developmental policy.
[29:07] But you have to actually make those arguments and not these other I wouldn't even say they actually count as arguments. But these statements and it doesn't make any sense to me either. I see also that there was one recently where they even had maybe one or two people from Crawfish Bay being interviewed about how they don't like Próspera. But then what they were talking about to me, doesn’t seem like Próspera. But that's a whole different thing.
[29:29] Humberto Macias: You know what's interesting, at least when I see concerns emanating from some of these local areas, usually what I see is, it'll be one or two people that claim to represent different communities. But when you actually go to the community, for example, specifically with Crawfish Rock, I know that, that Próspera is the biggest employer in that community. And there are many many people from that community that work in the project and support it.
[29:51] But you do have some limited voices that are a bit more visible. When you were asking me about some of the things that I most enjoyed or that I most enjoyed about the process or about the time here with jurisdiction, one of them has been going back and getting to know Hondurans that are now prosperaing and are having opportunities because of Próspera.
[30:08] There's so much talent in Honduras, and in Latin America and in the Caribbean. And it's just that we don't have the proper ecosystems to help people just thrive. So for the Hondurans that I see go to Próspera, and when I see them thrive, I think that is very fulfilling.
[30:24] Rasheed Griffith: Yes. So after coming to the end of the conversation, you had mentioned that there are some obstructions that happened when the law was originally repealed last year, some daily operation customs and banking access. Now, the law has to officially get reinstated for things to stabilise and go forward or does it essentially nothing changes per se, and you have to kind of just get the operations back to a more alignment with the public sector in the Honduran government?
[30:53] Humberto Macias: At least for Próspera and the two others ZEDE’s that were created. I'm not sure if you're aware of them, but one of them is in Choloma in Honduras, and another one is down south. I'm going blank on the name right now, but another one is down south. So for these that have already been created, they have acquired rights, and they have all of these legal protections that apply.
[31:11] So for those nothing needs to be changed because nothing has changed for them at the legal level, what would be quite helpful. I know that the vision of Próspera is to bring in foreign direct investment to create jobs to just help position Honduras as a place for nearshoring in Latin America, so they are these key things that Próspera is working towards.
[31:30] Some of the rhetoric and also some of these actions are at the periphery, they do cause delays in the development. And I think that's frustrating when you think that there's 74% of the people in Honduras are poor. Any delay in creating jobs for them, it's quite sad to see that is happening because you could be changing lives. I think so for Próspera, I think the things that could be useful would be to basically reinstate things like the banking and the customs, and also just give assurances that they're not going to interfere with the project. There's some very basic things that could be done that would enable the jurisdiction to move forward much faster.
[31:59] When you look at the progress, I was telling you earlier about the progress of the jurisdiction. But when I gave you the context of that progress, Próspera, was launched in May 2020. So this was literally in the middle of the COVID pandemic. Now there are these different winds that are coming because of the election and things that are happening at the level of the administration that are slowing the progress down. And despite that, the project has advanced quite far.
[32:22] If we didn't have that at the zone, then I think there would be much more progress and I think that those things could be alleviated. You know its through the customers, the banking and its insurances, if those things could be done it would help Próspera move along a lot faster, and bring forward that vision that it has for Honduras and for Hondurans.
[32:36] Rasheed Griffith: Thank you so much Humberto. This has been a very entertaining and interesting conversation. And I am hopeful we can do another one in the future when there is some even more progress happening in Próspera. Maybe in person, in Próspera. I will come back. [Laughs]
[32:49] Humberto Macias: You know, that would be great!
[32:51] Rasheed Griffith: Thank you very much.