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LATIN AMERICA ADVISOR

LATIN AMERICA ADVISOR

A daily publication Of the dialogue

February 10, 2023

Should Honduras Formally Repeal Economic Zones?

Honduras’ Congress, pictured above, is considering final ratification of the repeal of so-called Zones for Employment and Economic Development, or ZEDEs. // File Photo: Honduran Government.

Q

  • Honduras’ Congress is currently considering legislation that would ratify the repeal of so-called Zones for Employment and Economic Development, or ZEDEs. Lawmakers voted in April last year to repeal the special economic areas. Supporters have said the zones attract investment and generate employment, but opponents say they threaten Honduras’ sovereignty because of the high degree of autonomy in which they operate. How certain is the ratification of the ZEDEs’ repeal, and how strong are the arguments for keeping them in place? What would the complete repeal of the ZEDEs mean for employment and the local economies in which they operate? How do the ZEDEs and their potential repeal affect Honduras’ investment climate and economic relations with other countries, such as the United States?

A

Javier Efraín Bú Soto, Honduras’ ambassador to the United States: “In 2022, the National Congress of Honduras unanimously repealed the highly unpopular ZEDEs, even by members who initially voted in favor of their creation. Congress still needs to ratify the repeal. On paper, they look like a concept to attract foreign investment, but in practice they are a clear violation of our sovereignty. Since their irregular creation in 2013, when backed by an illegitimate handpicked court by then-President of Congress Juan Orlando Hernández, the ZEDEs have been undemocratic, unconstitutional and in violation of the integrity of our territory by creating ‘fiefdoms’ with their own legislation, courts and security forces—a concept prohibited by our constitution. Let me be clear: Honduras needs…”

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