“What the world needs is not just one Hong Kong, but 100 Hong Kongs..!”     Paul Romer

 PAUL ROMER’S “CHARTER CITIES” IDEA

http://www.chartercities.org/concept     paul@chartercities.org

In 2009, World Bank economist Paul Romer introduced the idea of charter cities — economic zones founded on the land of poor countries but governed with the legal and political system of rich ones.   As an example of what a charter city can achieve, Romer cites Hong Kong whose economy, for most of the 20th century, left mainland China’s in the dust, proving that enlightened rules can make a world of difference. 

By an accident of history, Hong Kong had its own charter—a set of laws and institutions imposed by its British colonial overseers—and this charter served as a magnet for go-getters. 

At a time when much of East Asia was ruled by nationalist or Communist strongmen, Hong Kong’s colonial authorities put in place low taxes, minimal regulation, and legal protections for property rights and contracts.  Between 1913 and 1980, the city’s inflation-adjusted output per person jumped more than eightfold, making the average Hong Kong resident 10 times as rich as the average mainland Chinese.

Then, beginning around 1980, Hong Kong’s example inspired the mainland’s rulers to create special economic zones (SEZ) starting with Shenzhen City, adjacent to Hong Kong, and later other copycat enclaves based on Hong Kong’s economic model, but notably without the political freedoms.  Pretty soon, one of history’s greatest export booms was under way, and the success of the SEZ’s eventually drove China’s rulers to embrace the export-driven, pro-business model for the whole country.  

 

Sadly for Hong-Kongers, when Britain’s 99-year lease on Hong Kong’s “New Territories” (90% of the enclave) expired in 1997, China refused to renew the lease but agreed to allow HK a large measure of self-government for another 50 years under a “One country, two systems” model.  Unfortunately – predictably one might say – China has reneged on its promises and (from 2020) has taken almost total political control over the enclave.

   

CHARTER CITY STRUCTURE 

 

Each entity would be run according to the philosophy of its founder(s).   In order to attract good quality citizens a ‘charter city’ will need to adopt an appealing charter.  Those who don’t like the charter of city ‘A’ will not want to live there and may, perhaps, choose city ‘B’ instead.  What could be fairer and clearer than that?

The point of the charter cities idea is to give citizens the choice about where they want to live and to provide the basic rules and amenities required for economic growth. Ideally, by establishing a city with highly developed rules and governance in an underdeveloped region, living and working in a charter city may provide a more attractive alternative to moving far away to more developed countries.  Romer’s charter cities will have “extremely open immigration” policies to attract foreign workers from all over. 

There are three distinct roles for participating nations:  

• A HOST country provides the land.  
• A SOURCE country, or countries, supplies the people who move to the new city.  
• A GUARANTOR country ensures that the charter will be respected and enforced.

But here lies the dilemma: in order to establish a new Charter City with new rules, you have to deal with governments whose mentality is trapped in the old rules

 

“You want the new city to achieve reform in a system of government that has been unable to achieve reform through other means. The new place needs to avoid the problems of the old place.   Anything that involves land can be manipulated by opponents of the government.  You have to find a place where there’s a strong enough leader with enough legitimacy to do this whilst knowing that he’s going to get attacked.  It narrows the options quite a bit. But we shouldn’t give up without trying a few more places.”  Paul Romer 

 

Only 2 countries have so far been receptive to Romer’s Charter Cities idea. 

1) Madagascar – After meeting Romer in 2008, President Marc Ravalomanana considered creating two charter cities, but the plan was scrapped when he was deposed in 2009. 

2) Honduras – In 2011 it passed a constitutional amendment that allowed for the creation of a separately ruled Special Development Region.  Romer served as chair of a “transparency committee” but resigned in September 2012 when the Honduran government agency responsible for the project signed agreements with international developers without knowledge of the committee.    In October 2012 the Honduran Supreme Court declared charter cities to be unconstitutional because the laws of Honduras would not be applicable there.

MY CRITIQUE OF ROMER’S IDEA

Unlike NYT/Guardianista comrades, whose objection is that the idea “reeks of colonialism”, I see other more relevant flaws in Romer’s Honduras proposal…

• 1000 km2 is TOO MUCH TERRITORY for most countries to consider “surrendering” control over  
  • Even an enthusiastic host country would have enormous political difficulty as such an extensive piece of land will almost certainly be populated, inviting political problems with moving those people.
  • It would also mean a very long border to be guarded and fenced or even Trump-WALLED..?  

• A Charter City of 10m (as suggested by Romer) is far too large
  • risks becoming a huge slum with a high crime rate.

• No mention of any ecological/environmental aspect 
  • e.g., car-free, solar & wind power, rain harvesting, waste re-cycling, etc
  • A strong emphasis on ecological aspects might conciliate “progressives” who would otherwise fight tooth and nail against such a “neo-colonialist” concept.

• No mention of any urban master plan  
  • one has to assume CC’s will be built in a piecemeal fashion as immigrants arrive.

• “Extremely open immigration policies to attract foreign workers from all over” 
  • “Open-borders” would risk the CC becoming a sanctuary for political opponents of the host country  

HOW WOULD OΔSIS-CITIES BE DIFFERENT..?

1. MODEST LAND REQUIREMENT

The less land required the easier it will be to gain the backing and approval of the host country. 

Convincing a potential host country to agree to leasing 1000 sq km of their territory to a foreign group – even if that 1000 km2 amounted to a tiny fraction of their national territory – would be politically difficult at the best of times, but especially since such a largish piece of land would probably have a significant population.  

Oasis Cities would be a far easier proposition to sell to a host country, since as little as 10 sq km would be sufficient space on which to build many OA-city habitats. 

In most countries it would not be difficult to find a suitable unpopulated area of that size – and, if just a small handful of people were living there, they could easily be compensated without causing any political problems.  

2. SELECTIVE ADMISSION POLICY

“Colonialism” is 2nd on the left’s hate list, not far behind “racism” – with which it is always linked.  If Guardianistas shriek that Romer’s Charter City concept “reeks of colonialism”, their smug heads will explode with righteous rage at the thought of Oasis-Cities being established as white-majority enclaves within PoC countries.   Yet these are the same hypocritical useful idiots who sponsor, aid and abet millions of 3rd world “refugees” streaming into and effectively colonising 1st world countries, but woe to anyone proposing a reverse flow. The fact that Oasis Cities could be hugely beneficial to their host countries, as HK was to China, would of course be ignored.  

Aspiring host countries would probably prefer to host (selective-admission) OA-Cities because an open-borders Charter City could become a sanctuary and a political platform – a place from where political opponents of the host government could freely agitate without risk of arrest.   Rather as in 1989 when HK citizens, unlike their Chinese mainland counter-parts, were able to freely and vociferously protest against China’s brutal crackdown in Tien-an-Men square.   Most countries would not want an open-admission CC unless they are able to retain some political control in the enclave.  

 3. ECOLOGICAL SELF-SUFFICIENCY 

4. DIVORCED FROM LOCAL POLITICS

OΔCities would not get involved in local politics or harbour any politically-active opponents of the host nation’s regime. 

LEFTISTS OPPOSE “CHARTER CITIES” FOR ALL THE PREDICTABLY WRONG REASONS

http://www.guardian.co.uk/science/2010/jul/27/paul-romers-charter-cities-idea

http://www.theatlantic.com/magazine/archive/2010/07/the-politically-incorrect-guide-to-ending-poverty/308134/

” Romer is peddling a radical vision: that dysfunctional nations can kick-start their own development by creating new cities with new rules.  To launch new charter cities, he says, poor countries should lease chunks of territory to enlightened foreign powers, which would take charge as though presiding over some imperial protectorate. Romer’s prescription is not merely neo-medieval, It is also neo-colonial.”   

http://www.smartplanet.com/blog/big-story/can-8216charter-cities-help-abolish-global-poverty/274?tag=main;spotlight

http://www.nytimes.com/2012/04/22/world/europe/in-georgia-plans-for-an-instant-city.html?pagewanted=all&_r=0

http://www.nytimes.com/2012/05/13/magazine/who-wants-to-buy-honduras.html?pagewanted=all&_r=1

http://www.nytimes.com/2012/10/01/world/americas/charter-city-plan-to-fight-honduras-poverty-loses-initiator.html?_r=0

http://www.economist.com/node/21541392

The idea of setting up a charter city echoes the way that big companies adapt to change. They often set up new divisions unencumbered by old rules. These can be dramatic successes.

A clean slate allows government authorities to experiment with laws and governance or copy those that have worked elsewhere, says Mr Romer

In a nutshell, the Honduran government wants to create what amounts to internal start-ups—quasi-independent city-states that begin with a clean slate and are then overseen by outside experts. They will have their own government, write their own laws, manage their own currency and, eventually, hold their own elections.

More fundamentally, Mr Romer argues, when people vote with their feet to come and live in a charter city, they opt in to its rules, in a way that makes possible a new form of governance: neither authoritarian nor (at least initially) fully democratic.   The regions are supposed to be open to anybody, but the inflow of people may have to be controlled. What is more, success or failure will depend not just on good rules, as in laws, but on the social norms that are established by its first inhabitants, explains Mr Romer. The key, he says, is to begin with a core of people who share certain new norms—rather as when William Penn attracted people to Pennsylvania who were committed to his charter’s legal promise of freedom of religion. Once the norms are well established in a community, subsequent immigrants will adapt to them.

“Anything that involves land can be manipulated by people who want to rise up against a leader,” he began. “You have to find a place where there’s a strong enough leader with enough legitimacy to do this knowing that he’s going to get attacked. It narrows the options quite a bit. But we shouldn’t give up without trying a few more places.” In short, a disappointment with one client is no excuse for failing to pitch other ones. Any entrepreneur knows that. –

See more at: http://marginalrevolution.com/marginalrevolution/2010/06/sebastian-mallaby-on-paul-romer.html#sthash.YB4pJqq2.dpuf