‘Go Home’: Honduras Islanders Fight Cryptocolon Lists | Honduras

Right in front of Wilford Webster’s home on a hilltop, waves break over the turquoise waters that surround the reefs off the coast.

“Look at this,” he said, his arms framing the panorama. “Who does not want this?”

To the left is the community of Crawfish Rock, a few hundred people of mostly English-speaking black Caribbean descent who live in raised wooden houses on ancestral land.

To the right is a security booth with cameras, a gate and a guard. Just beyond it is a prototype home and the headquarters of a controversial start-up town in the middle of a landscape scarred by a bulldozer and deep holes dug for the foundation for the next construction phase.

Located on a slope where the road divides the countryside as much as the community, Webster’s home on the island of Roatán is at the center of a struggle for land rights and sovereignty that has galvanized Honduras.

It is also symptomatic of a broader phenomenon across the region, where foreigners – often cryptocurrency enthusiasts, libertarians or both – have flocked in recent years and supported controversial projects – such as the proposed “Bitcoin City” in El Salvador – that threaten to displace locals and compare with colonialists.

Webster has a message for those who moved in next door: “Go home.”

When the new Honduran government repealed a few laws in late April that had allowed the creation of semi-autonomous zones called Zede, it sent a similar message. But investors in Zede on Roatán, known as Honduras’ Próspera, have challenged the measure.

“When investing in Honduras, Honduras Próspera, Inc. relied on specific Honduras legal stability guarantees that the rights and authorities granted by Zede’s legal framework would remain in place for Próspera for decades to come,” investors wrote in a statement issued May 4, and added that they expect “Honduras to honor its obligations under legal stability agreements and international treaties.”

The result is a conflict in which investors gamble with millions, the government may be in danger of a costly lawsuit and the fate of the affected communities hangs in the balance.

The controversy dates back about a decade, when the Honduran government reformed the constitution and passed a law paving the way for the creation of employment and economic development zones (Zede). The idea was torn from the economist Paul Romers’ proposal for charter cities, which the Nobel Prize winner theorized could promote development in areas plagued by poor governance.

Romans suggested that a foreign nation should act as a guarantor for the governance of charter cities. But Honduran law instead allowed companies to build a private city.

The case fell into the background until 2020, when the rumor spread that the first charter town was established in Crawfish Rock – to the surprise of the village’s inhabitants. “We did not even know what a Zede was,” said Luisa Connor, president of the community association.

Investors had first appeared in Crawfish Rock about three years before as a charitable foundation, opened a community center and talked about plans to build a tourist center nearby. Residents said they saw no reason to be suspicious.

“There’s no way for people to come and start building around us or start projects,” Connor said.

Located about 65 kilometers (40 miles) north of the mainland, Roatán is one of the Caribbean’s best tourist destinations and an expat paradise, known for its white sand beaches and world-class diving. Up and down the beach there are holiday homes and resorts owned by foreigners.

Representatives of Próspera have said that they informed the community about their intentions in June 2019, referring to a document signed by a couple of dozen residents that contains the word Zede, but which does not explain what it is. “They mostly fooled us,” Connor said.

To further fuel the situation, Própsera posted on its website drawings of three expansion stages that appeared to include the center of Crawfish Rock within its jurisdiction, raising fears that investors could invoke a legal clause that would allow expropriation of the land society has. . lived on for generations. Representatives of Próspera promised that they would not go that way, but their words provided little consolation.

As the controversy spread throughout the nation, a movement was born that demanded the protection of land rights and condemned the granting of sovereign territory to foreigners and corporations.

President Xiomara Castro, who was elected in a landslide in November, made Zede a signature version of her campaign. When Castro sanctioned the repeal in April, she called it the most important day in the presidency so far.

For the people of Crawfish Rock, it certainly was. “Words cannot describe how happy we were,” Connor said.

But the excitement was short-lived. Just before the repeal, Próspera announced a new investment round totaling $ 60 million and the introduction of the cryptocurrency bitcoin as a legal tender. In the weeks and months since, the company has continued to operate as if nothing has changed, moving forward with construction projects and clinging to their plan to build a kind of libertarian oasis.

Government officials said that any Zede currently operating has one year to comply with a different type of legal framework. But investors cite a sunset clause in the Zede law that gives them a period of at least 10 years, as well as other international trade agreements that they claim give them decades.

Legal analysts consulted by the Guardian suggested that to avoid a lawsuit, the government could either enter into an agreement with investors, or challenge whether Zedes was created in strict accordance with the now repealed law.

“I firmly believe that the repeal is good, but it does not end here,” said Gustavo Solórzano, legal adviser to Cohep, the country’s largest chamber of commerce. “Now the state has to review these licenses, and it would be best for the state to verify if all the legal requirements were met, and if not, proceed to cancel the delivered licenses.”

Meanwhile, the inhabitants of Crawfish Rock are still vigilant. “We have our eyes open,” Connor said. “We do not trust anyone.”