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Honduras Ratchets Up Battle with Crypto-Libertarian Investors

47 points by bertman 3y ago

throwaway98797 3y ago
anyone else find this style of writing hard to follow?
- larrysalibra 3y ago
  Yes. Adding "narco-" in front of any previous leader or official the author apparently doesn't like doesn't do much to help with clarity. Hard to tell what's going on from this article in that the author seems so biased against Prospera. Sounds like they made an agreement with one government that for various reasons lost power and that the new government wants to cancel the deal.
  - ks2048 3y ago
    You can argue how often "narco-" should be used, but it's more than just someone "the author apparently doesn't like". The ex-president and his brother are literally convicted drug traffickers.
- crotchfire 3y ago
  i think the readability would be improved if the author tossed in the prefix "crypto-" a few dozen more times.
- yieldcrv 3y ago
  The actual statements from the parties involved - The Prospera ZEDE and the executive branch - are at the bottom and far more coherent and cordial than the rest of the article suggests. The rest of the article is hyperbolic trash. “Immense bipartisan pressure from the US to maintain the Honduras charter cities” = “2 US senators writing a … letter”
- blackhawkC17 3y ago
  It's typical for some journalists. They just mash words together to make something look suspicious, but they don't really have a point to make.
picadores 3y ago
Libertarian ideology colonialism attacking a souvreign nation state. Thing you do not see every day.
- classified 3y ago
  As I understand it, the previous govt invited the conquistadores and let them buy free reign.
  - picadores 3y ago
    And the souvreign changed his opinion on that. Corruption is not a trapdoor function, you can get rid of that.
    - inglor_cz 3y ago
      You will also get rid of any trust from foreigners and, thus, any future foreign investment. Sometimes keeping your word is more important that attainment of ideological purity. China can survive such a loss of trust, because it is a Behemoth of a nation and can live somehow regardless. Honduras much less so. (I am saying this as a citizen of a small country who doesn't like all our commitments either, but the alternative of just going back on our word would be fairly detrimental to us long term.)
      - picadores 3y ago
        Was there really ever any trust, except for the - we can get away with bribing people and steal stuff as fast as we can carry and can get away with it? A dishonest merchant will only meet dishonest people.
voldacar 3y ago
This was a shockingly biased and information-sparse article. Really disappointing
- chabes 3y ago
  Team-based politics cause bad feels when you see your team being criticized
  - EraYaN 3y ago
    I mean if your team are the drug lords of the previous government, then whelp. Maybe you picked the wrong team.
    - chabes 3y ago
      Both teams are the wrong team. That’s precisely the point
  - voldacar 3y ago
    I'm not on a team. I have never been to Honduras and have no strong feelings about either side. The whole article is just a journalist describing a conflict between two groups of humans, while constantly using morally and emotionally negative language against one group and never sharing their perspective, while doing the opposite for the other group. This journalist doesn't even accurately describe the origin of the conflict, which the top comment here does. It's a fun mental exercise to read the article and count sheer number of Russell conjugations. This is not the kind of document you write to inform your reader about the state of the world.
pie_flavor 3y ago
The version of the story without all the fnords: Honduras solicited investment in the form of charter cities, where corporations could buy pockets of land and run them however they wanted. Then a more socialist government came into power, reversed the law allowing them to exist, and refused to give them their money back. The biggest, Próspera, is suing to get their money back. Worth noting, this is a standard risk in Latam and the government that introduced them made it a constitutional amendment with a ten-year reversal process, since they wouldn't get any investors otherwise. The primary complicating factor here in Próspera's lawsuit is that they have not actually lost their investment yet; nine years to go. But Honduras's response is to withdraw from the court system and legal framework that Próspera's suing them in, the ICSID. If they actually go through with this, that's going to be the end of most foreign investment in Honduras at all, charter city or otherwise. The ICSID is there to ensure that your investment stake won't be confiscated by the government when political winds change; Honduras is withdrawing because it wants to do exactly that, and no investor will risk that happening to them. Also despite the article saying 'crypto' a dozen times their only relation to crypto is accepting it as legal tender, same as neighboring El Salvador. Instead of 'DAOs avoiding the FTC' one should think 'biotech avoiding the FDA'.
- archerx 3y ago
  I wonder if all the huge manufacturing factories near San Pedro Sula/Cortez will pack up and move to either El Salvador or Guatemala in response to this?
- chabes 3y ago
  > Honduras solicited investment in the form of charter cities, where corporations could buy pockets of land and run them however they wanted. Then a more socialist government came into power, reversed the law allowing them to exist, and refused to give them their money back. No mention of democratically elected government being ousted by US-backed coup, or the fact that this single company is asking for a third of the country’s GDP. On crypto: you seem very confident about your position, yet if you talk to actual people on the ground, you’ll get a different story than you are proposing. Crypto advocates are bragging about this very subject. It started with El Salvador, but goes well beyond one country now. And for the record… I am not anti-crypto. I have been involved with bitcoin for 9 years.
yardie 3y ago
I read about these charter cities a few years ago [0]. All the theory around them seemed to have this libertarian zeal about it that kind of put the foreign investors ahead of the local, voting population. And basic government functions (voting, taxes, police) were simply ignored or not fully explained. BTW, for the Americans, there are lots of charter cities going up in Puerto Rico. And they are also unpopular because rich foreigners pay lower or no taxes compared to a PR citizen. [0] https://www.theatlantic.com/magazine/archive/2010/07/the-politically-incorrect-guide-to-ending-poverty/308134/?utm_source=copy-link&utm_medium=social&utm_campaign=share https://www.theatlantic.com/magazine/archive/2010/07/the-pol...
- cpursley 3y ago
  Not all of them, these have led to real non-tourism job growth in PR. And PR is US territory, the tax breaks are for citizens who move from the mainland - not foreigners. It’s actually a great setup for software companies who are required to hire some locals.
- Loughla 3y ago
  Is this the latest incarnation of disaster capitalism? In the 00's, companies were content to just capture the government and make it into what they wanted. Now it's an explicit agreement that they can do what they want? Those are real questions and not just snark, regardless of how snarky I actually feel about this entire thing.
- roenxi 3y ago
  I am cautious in supporting these particular cities, since democratic primacy is a critical right that empirically leads to better results. That dealt with, there is a frame here where democratic power is preserved. The idea is that voting is done with the feet. There are a lot of obvious ways that is worse than voting by vote, but it is a much more powerful action. In the long term that sort of charter city would need to transition to either a more standard model or something like the City of London - eventually becoming a tightly controlled geographic area where not a lot of people actually live. It worked well for the UK, I imagine it would work well elsewhere. If anything, corporate control runs the risk of being too effective and ending up as the command structure of some sort of colonial superpower.
namlem 3y ago
Hopefully Prospera wins and the socialist president loses. Honduras would benefit from more foreign investment. She's not doing her people any favors.
foobarxyzzy 3y ago
Crypto is [mostly] for crime, laundering, etc. When will the tech industry get past this?
- alphazard 3y ago
  Snapchat is mostly for porn? Signal is mostly for drug dealers? Tor is mostly for pedophiles? The early adopters of a technology are the users that need it the most, and have the highest opportunity cost from not using it. You can think of them as beta-testers for the "nothing to hide" folks. You are looking at the beginning of a technology and criticizing the beta-tester population.
  - pavlov 3y ago
    The beginning? It’s been fifteen years. Hundreds of billions have been invested. We’ve been through several massive hype cycles. If there is any potential for mainstream adoption of crypto, what exactly is holding it back at this point? It’s not new; it’s not obscure; and it’s certainly not underinvested. Of course the crypto promoters will never admit that because the only reason to invest in crypto is this narrative — “it’s something brand new, very few people understand it, you can get in on the ground floor and be part of a revolution, etc.”
    - medo-bear 3y ago
      It is easy to understand the use-value: sovereignty over personal digital assets; sovereignty over transfer of said assets
      - pavlov 3y ago
        Nobody seems to actually want that though. Most crypto owners just trade on centralized exchanges. In practice, that sovereignty jargon is just an ideological veneer over unregulated penny stocks with no product-market fit.
        3y ago

47 points by bertman 3y ago

throwaway98797 3y ago

anyone else find this style of writing hard to follow?

larrysalibra 3y ago
Yes. Adding "narco-" in front of any previous leader or official the author apparently doesn't like doesn't do much to help with clarity. Hard to tell what's going on from this article in that the author seems so biased against Prospera. Sounds like they made an agreement with one government that for various reasons lost power and that the new government wants to cancel the deal.
- ks2048 3y ago
  You can argue how often "narco-" should be used, but it's more than just someone "the author apparently doesn't like". The ex-president and his brother are literally convicted drug traffickers.
crotchfire 3y ago
i think the readability would be improved if the author tossed in the prefix "crypto-" a few dozen more times.
yieldcrv 3y ago
The actual statements from the parties involved - The Prospera ZEDE and the executive branch - are at the bottom and far more coherent and cordial than the rest of the article suggests. The rest of the article is hyperbolic trash. “Immense bipartisan pressure from the US to maintain the Honduras charter cities” = “2 US senators writing a … letter”
blackhawkC17 3y ago
It's typical for some journalists. They just mash words together to make something look suspicious, but they don't really have a point to make.

picadores 3y ago

Libertarian ideology colonialism attacking a souvreign nation state. Thing you do not see every day.

classified 3y ago
As I understand it, the previous govt invited the conquistadores and let them buy free reign.
- picadores 3y ago
  And the souvreign changed his opinion on that. Corruption is not a trapdoor function, you can get rid of that.
  - inglor_cz 3y ago
    You will also get rid of any trust from foreigners and, thus, any future foreign investment. Sometimes keeping your word is more important that attainment of ideological purity. China can survive such a loss of trust, because it is a Behemoth of a nation and can live somehow regardless. Honduras much less so. (I am saying this as a citizen of a small country who doesn't like all our commitments either, but the alternative of just going back on our word would be fairly detrimental to us long term.)
    - picadores 3y ago
      Was there really ever any trust, except for the - we can get away with bribing people and steal stuff as fast as we can carry and can get away with it? A dishonest merchant will only meet dishonest people.

voldacar 3y ago

This was a shockingly biased and information-sparse article. Really disappointing

chabes 3y ago
Team-based politics cause bad feels when you see your team being criticized
- EraYaN 3y ago
  I mean if your team are the drug lords of the previous government, then whelp. Maybe you picked the wrong team.
  - chabes 3y ago
    Both teams are the wrong team. That’s precisely the point
- voldacar 3y ago
  I'm not on a team. I have never been to Honduras and have no strong feelings about either side. The whole article is just a journalist describing a conflict between two groups of humans, while constantly using morally and emotionally negative language against one group and never sharing their perspective, while doing the opposite for the other group. This journalist doesn't even accurately describe the origin of the conflict, which the top comment here does. It's a fun mental exercise to read the article and count sheer number of Russell conjugations. This is not the kind of document you write to inform your reader about the state of the world.

pie_flavor 3y ago

The version of the story without all the fnords: Honduras solicited investment in the form of charter cities, where corporations could buy pockets of land and run them however they wanted. Then a more socialist government came into power, reversed the law allowing them to exist, and refused to give them their money back. The biggest, Próspera, is suing to get their money back. Worth noting, this is a standard risk in Latam and the government that introduced them made it a constitutional amendment with a ten-year reversal process, since they wouldn't get any investors otherwise. The primary complicating factor here in Próspera's lawsuit is that they have not actually lost their investment yet; nine years to go. But Honduras's response is to withdraw from the court system and legal framework that Próspera's suing them in, the ICSID. If they actually go through with this, that's going to be the end of most foreign investment in Honduras at all, charter city or otherwise. The ICSID is there to ensure that your investment stake won't be confiscated by the government when political winds change; Honduras is withdrawing because it wants to do exactly that, and no investor will risk that happening to them. Also despite the article saying 'crypto' a dozen times their only relation to crypto is accepting it as legal tender, same as neighboring El Salvador. Instead of 'DAOs avoiding the FTC' one should think 'biotech avoiding the FDA'.

archerx 3y ago
I wonder if all the huge manufacturing factories near San Pedro Sula/Cortez will pack up and move to either El Salvador or Guatemala in response to this?
chabes 3y ago
> Honduras solicited investment in the form of charter cities, where corporations could buy pockets of land and run them however they wanted. Then a more socialist government came into power, reversed the law allowing them to exist, and refused to give them their money back. No mention of democratically elected government being ousted by US-backed coup, or the fact that this single company is asking for a third of the country’s GDP. On crypto: you seem very confident about your position, yet if you talk to actual people on the ground, you’ll get a different story than you are proposing. Crypto advocates are bragging about this very subject. It started with El Salvador, but goes well beyond one country now. And for the record… I am not anti-crypto. I have been involved with bitcoin for 9 years.

yardie 3y ago

I read about these charter cities a few years ago [0]. All the theory around them seemed to have this libertarian zeal about it that kind of put the foreign investors ahead of the local, voting population. And basic government functions (voting, taxes, police) were simply ignored or not fully explained. BTW, for the Americans, there are lots of charter cities going up in Puerto Rico. And they are also unpopular because rich foreigners pay lower or no taxes compared to a PR citizen. [0] https://www.theatlantic.com/magazine/archive/2010/07/the-politically-incorrect-guide-to-ending-poverty/308134/?utm_source=copy-link&utm_medium=social&utm_campaign=share https://www.theatlantic.com/magazine/archive/2010/07/the-pol...

cpursley 3y ago
Not all of them, these have led to real non-tourism job growth in PR. And PR is US territory, the tax breaks are for citizens who move from the mainland - not foreigners. It’s actually a great setup for software companies who are required to hire some locals.
Loughla 3y ago
Is this the latest incarnation of disaster capitalism? In the 00's, companies were content to just capture the government and make it into what they wanted. Now it's an explicit agreement that they can do what they want? Those are real questions and not just snark, regardless of how snarky I actually feel about this entire thing.
roenxi 3y ago
I am cautious in supporting these particular cities, since democratic primacy is a critical right that empirically leads to better results. That dealt with, there is a frame here where democratic power is preserved. The idea is that voting is done with the feet. There are a lot of obvious ways that is worse than voting by vote, but it is a much more powerful action. In the long term that sort of charter city would need to transition to either a more standard model or something like the City of London - eventually becoming a tightly controlled geographic area where not a lot of people actually live. It worked well for the UK, I imagine it would work well elsewhere. If anything, corporate control runs the risk of being too effective and ending up as the command structure of some sort of colonial superpower.

namlem 3y ago

Hopefully Prospera wins and the socialist president loses. Honduras would benefit from more foreign investment. She's not doing her people any favors.

foobarxyzzy 3y ago

Crypto is [mostly] for crime, laundering, etc. When will the tech industry get past this?

alphazard 3y ago
Snapchat is mostly for porn? Signal is mostly for drug dealers? Tor is mostly for pedophiles? The early adopters of a technology are the users that need it the most, and have the highest opportunity cost from not using it. You can think of them as beta-testers for the "nothing to hide" folks. You are looking at the beginning of a technology and criticizing the beta-tester population.
- pavlov 3y ago
  The beginning? It’s been fifteen years. Hundreds of billions have been invested. We’ve been through several massive hype cycles. If there is any potential for mainstream adoption of crypto, what exactly is holding it back at this point? It’s not new; it’s not obscure; and it’s certainly not underinvested. Of course the crypto promoters will never admit that because the only reason to invest in crypto is this narrative — “it’s something brand new, very few people understand it, you can get in on the ground floor and be part of a revolution, etc.”
  - medo-bear 3y ago
    It is easy to understand the use-value: sovereignty over personal digital assets; sovereignty over transfer of said assets
    - pavlov 3y ago
      Nobody seems to actually want that though. Most crypto owners just trade on centralized exchanges. In practice, that sovereignty jargon is just an ideological veneer over unregulated penny stocks with no product-market fit.
      - 3y ago