Can Charter Cities Help Eliminate Poverty?

Can Charter Cities Help Eliminate Poverty?When many of us imagine utopias, we may have flashbacks to our 7th-grade reading assignment of Lois Lowry’s The Giver. Paul Romer, however, has created a ‘concept’ over the past few years that leaves all imagined futuristic cities in the dark. Romer’s concept or “start-up” cities don’t actually possess any futuristic characteristics. They revolve around three basic principles: an independent watchdog, the influence of an external legal framework, and business investors. The product of these will “help drive economic growth…and reduce poverty and enhance development”.

Cities such as the ones Romer has tried to establish around the world were somewhat common during the period of industrial growth in the western world. When new factories would pop up, communities were built around them providing homes, schools, and other institutions for the workers. Romer, however, stresses that his cities are nothing like these. “A city built solely by a private business will just become a modern company town — a corporate city, not a charter city”.

His latest attempt was in Honduras. In partnership with the U.S. investment group MGK, Romer was hoping to create a city that would lure in businesses to revitalize the city and provide jobs. President Profirio Lobo Sosa cooperated, thereby facilitating the process of creating the city. However, in the fall of 2013, major issues began to rise. There was a lack of a solid independent ‘big brother’ for the city. There was no way the city was going to exist alone alongside the corruption in the Honduran government. Aside from that, the Honduran Supreme Court overturned the law that would create the charter city. Romer left the project in September with the investment group shortly abandoning it 2 months later.

Why did this project fail? Was it the concept or the lack of requirements that were being met? Paul soon found out that perhaps his venture’s foundation was too broad. Creating a city out of almost nothing (“Rome wasn’t built in a day” they say) requires confidence from numerous sources, especially given the participants required for charter cities. Of course, the external countries need to provide revenue and training, but if they do not trust the government of the country they are working with, the projects will fail.

Perhaps Honduras was not ready for a charter city. Charter cities have to be in countries that are ready for change; whose governments are willing to take on a drastic idea and let it redefine their communities. Countries such as those affected by the Arab Spring.

Tunisia and Morocco, where Romer is currently expanding his ideas to, have few preexisting symptoms that would make charter cities such a good fit for them. For one, they have a large population of unemployed and consequently agitated, youth. Their political leaders are desperate for a change both politically and economically, something charter cities can achieve.

There are those however who believe Romer’s approach is too complex and can create more problems than it solves. Michael Strong of MGK sees the involvement of the outside countries as too much. He believes that the charter city’s country should focus on developing a relationship with the private investors of the city and keep all affairs internal.

All in all, the use of charter cities offers a novice approach to create semi-autonomous patches of peace and economic success within countries that are slowly trying to reinvent themselves whether it’s out of political upheaval or recession. Even though there are some projects that have not had too much success such as the Georgian city of Lazika, the energy and thought put into building these cities, whether from scratch or renewing a fallen one, will not go wasted and unnoticed.

– Deena Dulgerian

Photo:The Economist