February 17, 2025 • 19 mins
Prospera is a city-state operated by a private company on the Honduran island of Roatan. It offers businesses single-digit tax rates and the ability to choose their own regulations. Its proponents have touted it as a poverty relief initiative for the country and as the most ambitious experiment in self-governance ever undertaken.
But that dream is now facing an existential crisis. A little more than a decade after Honduras changed its constitution to allow for places like Prospera, a new political party is in charge — and they’re looking to shut the whole thing down.
On today’s Big Take podcast, Bloomberg Industry Group’s Umar Farooq and Bloomberg’s Michael McDonald join host Sarah Holder to break down the $11 billion battle over the fate of a special economic zone in the Caribbean.
Read more: A Libertarian Island Dream in Honduras Is Now an $11 Billion Nightmare
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news. A few dozen miles
off the coast of Honduras, on the Caribbean island of Roatan,
there's a square mile of sun drenched sand called Prospera.
It has all the trappings of a typical resort, a
golf course, sprawling pools, sandy beaches, But Bloomberg industry groups
(00:26):
Umar Faruk says there's something else about it that's recently
drawn the attention of many Silicon Valley billionaires, entrepreneurs and libertarians.
If you had to describe what prosper was like in
a sentence, how would you describe it?
Speaker 2 (00:40):
I would say it's a techno utopia project. It has
this ideology behind it, kind of like we know this
new way of making the world better, and we want
a place to be able to do it.
Speaker 1 (00:52):
Prospera is a city state operated by a private company.
Speaker 3 (00:57):
The thinking is that if you have these sort of
easier regulations and lower tax codes, more companies will come,
and more jobs will be created and development will spur faster.
Speaker 1 (01:07):
Mike McDonald covers Central America for Bloomberg. He told me
Prospera is making use of a special law in Honduras.
That allows it to be mostly autonomous. It can set
its own tax rate and regulations, so the corporate tax
rate single digits, and Prospera offers companies the ability to
(01:27):
pick their preferred regulatory framework from a list of thirty
six countries. If none of those work, they can also
submit their own regulations for Prospera to approve. As of
last year, about fifty companies had established a presence there.
Speaker 3 (01:43):
There's the Bitcoin Cafe, sort of a bitcoin school with
a coffee shop.
Speaker 2 (01:46):
There's an American nuclear reactor manufacturer backed by Sam Alkman.
Speaker 3 (01:52):
There's a company that does sort of these biometric implants
where you can sort of implant I guess it's computer
chips right umar into your arm or something like that.
Speaker 1 (02:02):
And the reason those kinds of companies thrive there is
it because they wouldn't be able to operate elsewhere, or
because it's just a more attractive business environment.
Speaker 3 (02:12):
I think it's precisely because it's harder to get permits
for this in the US and Europe. It's slow, it's expensive,
and so it's just it's faster and easier to do
it in prosper And I think that's what they're trying
to do.
Speaker 1 (02:23):
Prospera's proponents have described it as a poverty relief initiative
for Honduras, as the most ambitious experiment in self governance
ever undertaken, as something that could change the world. But
that dream is now facing an existential crisis. A coalition
of environmental and indigenous rights activists have protested against it,
(02:47):
members of nearby communities are pushing back, and now a
little more than a decade after Honduras changed its constitution
to allow for places like Prospera, a new party is
in charge and they're looking to shut the whole thing down.
Speaker 2 (03:02):
So there's this like real legal problem, and that's caused
some practical problems for Prospera. They can't move money around
like they used to, they can't access Honduran banks like
they used to, and it just turns off the global
investors that they need to get the project going. So
it is really in danger.
Speaker 1 (03:24):
Today on the show The Fate of Prospera, how the
battle over the future of a special economic zone on
an island in Honduras has captured the attention of some
of the most powerful people in the world and put
billions of dollars on the line. I'm Sarah Holder and
this is the big take from Bloomberg News.
Speaker 4 (03:48):
Bloomberg Industry groups.
Speaker 1 (03:50):
Umar Faruk and Bloomberg's Mike MacDonald recently traveled to visit Prospera.
To enter the city state, they first had to sign
in with the armed guards at the security booth at
Prospera's border.
Speaker 2 (04:01):
When you enter this area, you sign an agreement almost
an idea of like having a visa that says you're
agreeing to abide by the set of rules that Prospera
has in place.
Speaker 4 (04:13):
It's like going through customs or something.
Speaker 2 (04:15):
A little bit. Yeah, they don't like check your bags
and stuff, but I think down the line they have
the authority to set up a checkpoint like that if
they wanted to.
Speaker 1 (04:24):
Umar says the source of Prospero's authority dates back to
twenty thirteen, when Honduras changed its constitution to allow for
special economic development and Employment zones known as zeeds, that
could function mostly autonomously within the country. Mike says that
at the time, Honduras was still recovering from the fallout
(04:44):
from a two thousand and nine coup, and Sete proponents
presented the zones as a way to bring international business
back to Honduras.
Speaker 3 (04:53):
The law was controversial when it was passed, and it
went through a couple different iterations, and one was struck
down by the Supreme Court. But I were really really
desperate for international capital.
Speaker 1 (05:02):
A few years later, a Venezuelan born wealth fund manager
named Eric Briman was searching for a potential home for
this radical new project called Prospera. He had teamed up
with Stephen Moore, who would go on to become a
senior economic advisor to President Trump during his first term,
and a Project twenty twenty five co author. Together, they
(05:23):
had pitched a version of the project to several US states,
but after lawmakers balked at the idea of allowing autonomous
zones in the US, Briman started looking south.
Speaker 2 (05:33):
And around twenty seventeen, Eric Briman decided to talk to
folks in the government in Honduras and found a permissive
environment to do this there.
Speaker 1 (05:44):
Briman formally applied to established Prospera in Honduras. That year,
he incorporated the entity that would control it in Delaware,
and through a network of about two dozen companies, he
set up in the US and the Cayman Islands. He
raised about one hundred and twenty million dollars to fund it.
From Hong Kong to Dubai to Shenzhen. There are examples
(06:06):
of places all over the worlds that have tailored their
laws to attract capital, but the way Honduras's Special Economic
Zones were set up allows far greater freedom.
Speaker 2 (06:17):
They have an additional level of autonomy that other special
Economic zones around the world don't have.
Speaker 1 (06:23):
Is the community about a grand mission or is it
really about making money?
Speaker 3 (06:30):
I think it's probably both. I mean, they are a
private corporation, they do want to make money, and at
the same time, you know, their mission is to sort
of provide a platform for these young startup companies that
sort of get bogged out in regulation in the developed world.
Speaker 1 (06:42):
And along the way, show that their style of governance can,
as they say, unleash human prosperity. By twenty twenty, Prospera
had shovels in the ground. By twenty twenty four, when
Mike and Umar went to visit, Prospera had a fourteen
story reds residential tower offering two bedroom condos with Caribbean
(07:03):
views for about two hundred and fifty thousand dollars. There
was also a two story coworking space and a wood
factory where programmable robots transform wooden blocks into construction materials.
And Prospera had also taken over pre existing facilities nearby.
Speaker 3 (07:20):
For example, the golf course and the resort next door
that had been built decades ago, and they just sort
of absorbed it and incorporated it.
Speaker 1 (07:26):
But Prosper's buzziest draw so far has been its burgeoning
biotech sector. Last year, Prospera hosted a biohacking conference with
the tagline make Death Optional, which drew hundreds of biohackers
and venture capitalists. Brian Johnson, the forty seven year old
software entrepreneur who's become widely known for his obsession with
(07:48):
his own longevity, has traveled to the island for gene
therapy that's not legal in the US. Still for a
planned techno utopia, there's not a lot there.
Speaker 2 (08:00):
There's no grocery stores I think there. They don't have
like a hospital, They don't have any of these things
that you would need to be self sufficient.
Speaker 1 (08:09):
Are there citizens of Prospero who lives there?
Speaker 4 (08:13):
And what is its population right now?
Speaker 2 (08:15):
How many people were actually living there, Mike it.
Speaker 3 (08:19):
You know, it's hard to say. It's a very transient population,
so getting an actual number of people who are permanently
living there is tough. I mean, there are people who
live there because there's a school there, and Eric Briman
does live there. I think he's relocated his family there.
Speaker 1 (08:34):
At a basic level, how does prosper handle services and
functions that governments typically offer, like sewage, potholes. How does
it run as a city.
Speaker 2 (08:46):
Well, that's kind of one open question, and the advantage
they have is that they're pretty small right now, but
on paper, they are responsible for a lot of these
municipal services, and they should be responsible down the line.
Speaker 1 (09:00):
One of those services is enforcing the law.
Speaker 2 (09:02):
So there's a set of like criminal Honduran laws that
are applicable in Prospero.
Speaker 1 (09:08):
Which means having a police force, a prison, a court system.
Speaker 2 (09:13):
And so far they've just got kind of stop gap
things in place. For example, their court system is just
an arbitration service that runs over the Internet and it's
composed of three retired judges who live in Arizona.
Speaker 1 (09:26):
And for other municipal services, Prospero depends on its neighbor.
Speaker 3 (09:30):
When I interviewed the mayor of Roatan, which is the
island where prosper is located, you know, his argument is like, look,
they use Rotan's roads, they use Rotan's garbage dump, they
fly in and out of Rotan's airport. So these are
sort of municipal services that the municipality provides for everybody
it lives on Rotan, and you know the people on
prosper when they come out of prosper they use those services.
(09:52):
And his argument is that, you know, since they're paying
taxes only to themselves and not the municipality, in his view,
it's not fair that they get to use these services.
Speaker 1 (10:00):
The mayor of Roatan is only one of the project's critics.
From the community next door to the President of Honduras,
a vocal resistance to Prospera is growing after the break
the campaign to bring an end to the city state,
and how Prospera's founders are fighting back. Ever since Prospera
(10:26):
broke ground in Honduras, the city state has positioned itself
as a business oasis, a libertarian dream, but for some
of its neighbors around the island, Prospera represents something more sinister.
Speaker 3 (10:38):
It is unfair to us because.
Speaker 1 (10:40):
We didn't want looking for this.
Speaker 2 (10:41):
This came looking to us.
Speaker 1 (10:44):
That's Vanessa Cardenas she spoke to Umar and Mike at
her home in Crawfish Rock, a fishing village located just
outside Prospera's borders. She's the town's council president. Many of
its roughly six hundred residents are part of Honduras's Afro
Indigenous Scottifuna population, and Bloomberg's Umar Faruk says Vanessa wasn't
(11:05):
the only one caught off guard by the rise of
the city state.
Speaker 2 (11:08):
At first, they thought that this was another kind of
tourist resort that was opening up next to them. But
then they figured out that this is something part of
a bigger ideological project, and they went around, like you know,
they literally went on the internet to try to figure
it out.
Speaker 1 (11:22):
They found a podcast where Prospera's backers talked about their
libertarian vision and about their plans to expand Prospera around
the world.
Speaker 4 (11:31):
It freaked them out.
Speaker 2 (11:32):
They were really alarmed. They were like, what the hell
is this in our backyard.
Speaker 1 (11:35):
Since then, Briman and his employees have visited the community
and tried to win them over with mixed effects. Residents
are concerned that Prospero will strain their resources and that
it's loosely regulated industries could hurt the environment.
Speaker 3 (11:50):
What are they that from that Sokoor prior whatever they're
doing up there with the terracty, whatever, where are they
putting the waste? Would that affect us in.
Speaker 1 (12:01):
The lower town?
Speaker 3 (12:01):
You know.
Speaker 1 (12:02):
They're also worried that the law that created the special
economic zones could allow Prospera to expand and eventually displace them.
Speaker 3 (12:11):
They have legitimate concerns about you know, does this legal
framework allow Prospera to kick them off their land? And
prosper always insists no, it doesn't, but you know, when
I spoke with the mayor of Roatan, he said, yes,
like the legal framework absolutely does allow them to forcibly
expropriate them.
Speaker 1 (12:26):
Other residents of Crawfish Rock and Roatan are more willing
to embrace Prospera and accept its promise of economic development.
Speaker 2 (12:34):
There are some folks that see optimism in that, that
want to get good jobs, that want to get good
roads built in their neighborhood, that want to you know,
clean up the area, and so there's some people that
are saying, hey, the government of Honduras has not helped
us out, so why don't we let this company and
help us out.
Speaker 1 (12:54):
As the local community's closest to Prospera debate its pros
and cons, Bloombergs Might MacDonald says Honduras's federal government has
come out in force against it. In part, that's because
the leftists are now in power and Prospera was an
idea championed by their conservative predecessors.
Speaker 3 (13:13):
They see it as a violation of sovereignty that their
predecessors had sort of granted large swaths of land to
these private investors, and they basically want that land back.
Speaker 1 (13:21):
The former Honduran president, who welcomed Prospera is now in
prison in the US with a drug trafficking conviction, and
that's given the current president even more ammo against Prospera.
She's called the project the creation of a narco regime. Meanwhile,
Honduras's highest court has ruled that the law behind special
economic zones is unconstitutional. It's the kind of perfect storm
(13:45):
of opposition that could kill a project like this, but
Prospera has come back swinging its founder Eric Brimman has
filed an eleven billion dollar arbitration claim against Honduras. Eleven
billion dollars is equal to about a third of the
country's GDP.
Speaker 3 (14:03):
Their argument is basically that there is language in the
law that approved these zones like Prospera, that basically guarantees
that they can make money in the future, and they're
basically claiming profits that they would lose in the future
if they lose Prospera today.
Speaker 1 (14:20):
On top of filing the massive claim, which is a
waiting of ruling from an international arbitration tribunal, Brimen is
also going hard on lobbying Washington. Lobbying.
Speaker 2 (14:31):
They got folks in Congress, they got folks in different administrations,
the ambassador in Tagusagalpa, they got folks in the State
Department to put pressure on Honduras to let this investment
go forward.
Speaker 1 (14:45):
To get these powerful US players on board. Prosperous boosters
are using some tried and true arguments.
Speaker 2 (14:52):
One of them was that our project is pushing back
against the rise of socialism in Latin America, and we're
pushing back against the influence of China and Latin America,
and we will eventually like uplift these countries out of
poverty and stop migration to the US, and all of
these are themes that resonate really well with folks in
(15:14):
Congress and in some cases folks that are Democrats and Republicans.
So they've used these ideological kind of intersections about what
their project is to get support from sympathetic voices in Washington.
Speaker 4 (15:28):
Has Trump's selection helped prosper.
Speaker 2 (15:32):
They certainly think so, because in November, shortly after the election,
Eric Briman put out a video from Washington.
Speaker 4 (15:41):
And Washington the Faniandla in teresis.
Speaker 2 (15:43):
He had lobbied folks in Congress, and he put out,
you know, a little video in front of the Capitol
building saying that we had a very successful visit and
saying that they're very confident that the new administration is
going to be very supportive of what their claims are.
De la Misa, Aura Inedo early I come to say
(16:05):
in lotremin So they clearly do think that they have
some more backing.
Speaker 1 (16:09):
The exces Montea I went, but Prospera does have US opponents.
In twenty twenty three, Massachusetts Senator Elizabeth Warren and more
than thirty other Democratic senators called on the US Trade
Representative and Secretary of State to intervene on behalf of
the hunter in government.
Speaker 2 (16:30):
They think it's very exploitative, that it's part of this
long history of corporations extracting wealth from countries.
Speaker 1 (16:37):
But those voices are now in the minority. How much
influence can Washington and American lawmakers really wheeled here? Can
they make or break the prosper experiment.
Speaker 2 (16:49):
Yeah, they definitely can. Some of the proposals by supporters
of Prospera have included putting a visa ban on Hunduran officials,
putting sanctions on Hundur and officials, stopping all foreign and
development money aid that movie might be going from the
US to Honduras, basically pulling out all the stops in
a way that they would do against a country that
(17:11):
was really a world state.
Speaker 3 (17:12):
I mean, the US is Honduras is top trading partner
and it's a major recipient of aid from the United States.
You know, the US has a military base in Honduras.
It's the only country in Central America that has a
US military base there. Most of Honduras's exports go to
the United States. You know, they export a lot of coffee, bananas,
some textiles. There's companies like Nike, for example, that make
(17:33):
some of their shirts in Honduras. So I mean it
behooves Hunduras to maintain good relations with the United States.
Speaker 1 (17:39):
Prospera is just the latest example of powerful business leaders
trying to build their own utopian cities. The Silicon Valley
venture capitalist Mark and Dreesen is backing a self sufficient,
sustainable new city in the Bay Area. Billionaire Peter Tiel
wants to build floating libertarian communities in international waters. These
(18:00):
kinds of efforts don't typically get a warm reception and
they often stall. So I asked Umar what prosperous story
says about the trajectory of these movements.
Speaker 2 (18:11):
I mean, it says that in some parts of the
world they are having pushback from different governments. But I
don't know if the idea is going to go away
anytime soon. Prospera itself is launching, or they have launched
something called Prospera Africa. They've got investors. They're shopping in
around to different governments in Africa because they need some
(18:31):
kind of constitutional framework like they had in Honduras to
set up a project there. So I think the idea
is continuing because it is attractive to a lot of
countries who are trying to get foreign investment. But it'll
be probably a game of looking for populations and locals
that might let it happen.
Speaker 1 (18:56):
This is The Big Take from Bloomberg News. I'm Sarah Holder.
This episode is produced by David Fox. It was edited
by Tracy Samuelson, Danielle Balby, and Naomi Shaven, who is
also our senior producer. It was fact checked by Adriana
Tapia and mixed and sound designed by Alex Suguiera. Our
senior editor is Elizabeth Ponso. Our executive producer is Nicole
(19:18):
Beamster Boorg Sage Bauman is Bloomberg's head of Podcasts. If
you liked this episode, make sure to subscribe and review
The Big Take wherever you listen to podcasts. It helps
people find the show. Thanks for listening. We'll be back tomorrow.
Bloomberg Audio Studios, podcasts, radio news. A few dozen miles
off the coast of Honduras, on the Caribbean island of Roatan,
there's a square mile of sun drenched sand called Prospera.
It has all the trappings of a typical resort, a
golf course, sprawling pools, sandy beaches, But Bloomberg industry groups
(00:26):
Umar Faruk says there's something else about it that's recently
drawn the attention of many Silicon Valley billionaires, entrepreneurs and libertarians.
If you had to describe what prosper was like in
a sentence, how would you describe it?
Speaker 2 (00:40):
I would say it's a techno utopia project. It has
this ideology behind it, kind of like we know this
new way of making the world better, and we want
a place to be able to do it.
Speaker 1 (00:52):
Prospera is a city state operated by a private company.
Speaker 3 (00:57):
The thinking is that if you have these sort of
easier regulations and lower tax codes, more companies will come,
and more jobs will be created and development will spur faster.
Speaker 1 (01:07):
Mike McDonald covers Central America for Bloomberg. He told me
Prospera is making use of a special law in Honduras.
That allows it to be mostly autonomous. It can set
its own tax rate and regulations, so the corporate tax
rate single digits, and Prospera offers companies the ability to
(01:27):
pick their preferred regulatory framework from a list of thirty
six countries. If none of those work, they can also
submit their own regulations for Prospera to approve. As of
last year, about fifty companies had established a presence there.
Speaker 3 (01:43):
There's the Bitcoin Cafe, sort of a bitcoin school with
a coffee shop.
Speaker 2 (01:46):
There's an American nuclear reactor manufacturer backed by Sam Alkman.
Speaker 3 (01:52):
There's a company that does sort of these biometric implants
where you can sort of implant I guess it's computer
chips right umar into your arm or something like that.
Speaker 1 (02:02):
And the reason those kinds of companies thrive there is
it because they wouldn't be able to operate elsewhere, or
because it's just a more attractive business environment.
Speaker 3 (02:12):
I think it's precisely because it's harder to get permits
for this in the US and Europe. It's slow, it's expensive,
and so it's just it's faster and easier to do
it in prosper And I think that's what they're trying
to do.
Speaker 1 (02:23):
Prospera's proponents have described it as a poverty relief initiative
for Honduras, as the most ambitious experiment in self governance
ever undertaken, as something that could change the world. But
that dream is now facing an existential crisis. A coalition
of environmental and indigenous rights activists have protested against it,
(02:47):
members of nearby communities are pushing back, and now a
little more than a decade after Honduras changed its constitution
to allow for places like Prospera, a new party is
in charge and they're looking to shut the whole thing down.
Speaker 2 (03:02):
So there's this like real legal problem, and that's caused
some practical problems for Prospera. They can't move money around
like they used to, they can't access Honduran banks like
they used to, and it just turns off the global
investors that they need to get the project going. So
it is really in danger.
Speaker 1 (03:24):
Today on the show The Fate of Prospera, how the
battle over the future of a special economic zone on
an island in Honduras has captured the attention of some
of the most powerful people in the world and put
billions of dollars on the line. I'm Sarah Holder and
this is the big take from Bloomberg News.
Speaker 4 (03:48):
Bloomberg Industry groups.
Speaker 1 (03:50):
Umar Faruk and Bloomberg's Mike MacDonald recently traveled to visit Prospera.
To enter the city state, they first had to sign
in with the armed guards at the security booth at
Prospera's border.
Speaker 2 (04:01):
When you enter this area, you sign an agreement almost
an idea of like having a visa that says you're
agreeing to abide by the set of rules that Prospera
has in place.
Speaker 4 (04:13):
It's like going through customs or something.
Speaker 2 (04:15):
A little bit. Yeah, they don't like check your bags
and stuff, but I think down the line they have
the authority to set up a checkpoint like that if
they wanted to.
Speaker 1 (04:24):
Umar says the source of Prospero's authority dates back to
twenty thirteen, when Honduras changed its constitution to allow for
special economic development and Employment zones known as zeeds, that
could function mostly autonomously within the country. Mike says that
at the time, Honduras was still recovering from the fallout
(04:44):
from a two thousand and nine coup, and Sete proponents
presented the zones as a way to bring international business
back to Honduras.
Speaker 3 (04:53):
The law was controversial when it was passed, and it
went through a couple different iterations, and one was struck
down by the Supreme Court. But I were really really
desperate for international capital.
Speaker 1 (05:02):
A few years later, a Venezuelan born wealth fund manager
named Eric Briman was searching for a potential home for
this radical new project called Prospera. He had teamed up
with Stephen Moore, who would go on to become a
senior economic advisor to President Trump during his first term,
and a Project twenty twenty five co author. Together, they
(05:23):
had pitched a version of the project to several US states,
but after lawmakers balked at the idea of allowing autonomous
zones in the US, Briman started looking south.
Speaker 2 (05:33):
And around twenty seventeen, Eric Briman decided to talk to
folks in the government in Honduras and found a permissive
environment to do this there.
Speaker 1 (05:44):
Briman formally applied to established Prospera in Honduras. That year,
he incorporated the entity that would control it in Delaware,
and through a network of about two dozen companies, he
set up in the US and the Cayman Islands. He
raised about one hundred and twenty million dollars to fund it.
From Hong Kong to Dubai to Shenzhen. There are examples
(06:06):
of places all over the worlds that have tailored their
laws to attract capital, but the way Honduras's Special Economic
Zones were set up allows far greater freedom.
Speaker 2 (06:17):
They have an additional level of autonomy that other special
Economic zones around the world don't have.
Speaker 1 (06:23):
Is the community about a grand mission or is it
really about making money?
Speaker 3 (06:30):
I think it's probably both. I mean, they are a
private corporation, they do want to make money, and at
the same time, you know, their mission is to sort
of provide a platform for these young startup companies that
sort of get bogged out in regulation in the developed world.
Speaker 1 (06:42):
And along the way, show that their style of governance can,
as they say, unleash human prosperity. By twenty twenty, Prospera
had shovels in the ground. By twenty twenty four, when
Mike and Umar went to visit, Prospera had a fourteen
story reds residential tower offering two bedroom condos with Caribbean
(07:03):
views for about two hundred and fifty thousand dollars. There
was also a two story coworking space and a wood
factory where programmable robots transform wooden blocks into construction materials.
And Prospera had also taken over pre existing facilities nearby.
Speaker 3 (07:20):
For example, the golf course and the resort next door
that had been built decades ago, and they just sort
of absorbed it and incorporated it.
Speaker 1 (07:26):
But Prosper's buzziest draw so far has been its burgeoning
biotech sector. Last year, Prospera hosted a biohacking conference with
the tagline make Death Optional, which drew hundreds of biohackers
and venture capitalists. Brian Johnson, the forty seven year old
software entrepreneur who's become widely known for his obsession with
(07:48):
his own longevity, has traveled to the island for gene
therapy that's not legal in the US. Still for a
planned techno utopia, there's not a lot there.
Speaker 2 (08:00):
There's no grocery stores I think there. They don't have
like a hospital, They don't have any of these things
that you would need to be self sufficient.
Speaker 1 (08:09):
Are there citizens of Prospero who lives there?
Speaker 4 (08:13):
And what is its population right now?
Speaker 2 (08:15):
How many people were actually living there, Mike it.
Speaker 3 (08:19):
You know, it's hard to say. It's a very transient population,
so getting an actual number of people who are permanently
living there is tough. I mean, there are people who
live there because there's a school there, and Eric Briman
does live there. I think he's relocated his family there.
Speaker 1 (08:34):
At a basic level, how does prosper handle services and
functions that governments typically offer, like sewage, potholes. How does
it run as a city.
Speaker 2 (08:46):
Well, that's kind of one open question, and the advantage
they have is that they're pretty small right now, but
on paper, they are responsible for a lot of these
municipal services, and they should be responsible down the line.
Speaker 1 (09:00):
One of those services is enforcing the law.
Speaker 2 (09:02):
So there's a set of like criminal Honduran laws that
are applicable in Prospero.
Speaker 1 (09:08):
Which means having a police force, a prison, a court system.
Speaker 2 (09:13):
And so far they've just got kind of stop gap
things in place. For example, their court system is just
an arbitration service that runs over the Internet and it's
composed of three retired judges who live in Arizona.
Speaker 1 (09:26):
And for other municipal services, Prospero depends on its neighbor.
Speaker 3 (09:30):
When I interviewed the mayor of Roatan, which is the
island where prosper is located, you know, his argument is like, look,
they use Rotan's roads, they use Rotan's garbage dump, they
fly in and out of Rotan's airport. So these are
sort of municipal services that the municipality provides for everybody
it lives on Rotan, and you know the people on
prosper when they come out of prosper they use those services.
(09:52):
And his argument is that, you know, since they're paying
taxes only to themselves and not the municipality, in his view,
it's not fair that they get to use these services.
Speaker 1 (10:00):
The mayor of Roatan is only one of the project's critics.
From the community next door to the President of Honduras,
a vocal resistance to Prospera is growing after the break
the campaign to bring an end to the city state,
and how Prospera's founders are fighting back. Ever since Prospera
(10:26):
broke ground in Honduras, the city state has positioned itself
as a business oasis, a libertarian dream, but for some
of its neighbors around the island, Prospera represents something more sinister.
Speaker 3 (10:38):
It is unfair to us because.
Speaker 1 (10:40):
We didn't want looking for this.
Speaker 2 (10:41):
This came looking to us.
Speaker 1 (10:44):
That's Vanessa Cardenas she spoke to Umar and Mike at
her home in Crawfish Rock, a fishing village located just
outside Prospera's borders. She's the town's council president. Many of
its roughly six hundred residents are part of Honduras's Afro
Indigenous Scottifuna population, and Bloomberg's Umar Faruk says Vanessa wasn't
(11:05):
the only one caught off guard by the rise of
the city state.
Speaker 2 (11:08):
At first, they thought that this was another kind of
tourist resort that was opening up next to them. But
then they figured out that this is something part of
a bigger ideological project, and they went around, like you know,
they literally went on the internet to try to figure
it out.
Speaker 1 (11:22):
They found a podcast where Prospera's backers talked about their
libertarian vision and about their plans to expand Prospera around
the world.
Speaker 4 (11:31):
It freaked them out.
Speaker 2 (11:32):
They were really alarmed. They were like, what the hell
is this in our backyard.
Speaker 1 (11:35):
Since then, Briman and his employees have visited the community
and tried to win them over with mixed effects. Residents
are concerned that Prospero will strain their resources and that
it's loosely regulated industries could hurt the environment.
Speaker 3 (11:50):
What are they that from that Sokoor prior whatever they're
doing up there with the terracty, whatever, where are they
putting the waste? Would that affect us in.
Speaker 1 (12:01):
The lower town?
Speaker 3 (12:01):
You know.
Speaker 1 (12:02):
They're also worried that the law that created the special
economic zones could allow Prospera to expand and eventually displace them.
Speaker 3 (12:11):
They have legitimate concerns about you know, does this legal
framework allow Prospera to kick them off their land? And
prosper always insists no, it doesn't, but you know, when
I spoke with the mayor of Roatan, he said, yes,
like the legal framework absolutely does allow them to forcibly
expropriate them.
Speaker 1 (12:26):
Other residents of Crawfish Rock and Roatan are more willing
to embrace Prospera and accept its promise of economic development.
Speaker 2 (12:34):
There are some folks that see optimism in that, that
want to get good jobs, that want to get good
roads built in their neighborhood, that want to you know,
clean up the area, and so there's some people that
are saying, hey, the government of Honduras has not helped
us out, so why don't we let this company and
help us out.
Speaker 1 (12:54):
As the local community's closest to Prospera debate its pros
and cons, Bloombergs Might MacDonald says Honduras's federal government has
come out in force against it. In part, that's because
the leftists are now in power and Prospera was an
idea championed by their conservative predecessors.
Speaker 3 (13:13):
They see it as a violation of sovereignty that their
predecessors had sort of granted large swaths of land to
these private investors, and they basically want that land back.
Speaker 1 (13:21):
The former Honduran president, who welcomed Prospera is now in
prison in the US with a drug trafficking conviction, and
that's given the current president even more ammo against Prospera.
She's called the project the creation of a narco regime. Meanwhile,
Honduras's highest court has ruled that the law behind special
economic zones is unconstitutional. It's the kind of perfect storm
(13:45):
of opposition that could kill a project like this, but
Prospera has come back swinging its founder Eric Brimman has
filed an eleven billion dollar arbitration claim against Honduras. Eleven
billion dollars is equal to about a third of the
country's GDP.
Speaker 3 (14:03):
Their argument is basically that there is language in the
law that approved these zones like Prospera, that basically guarantees
that they can make money in the future, and they're
basically claiming profits that they would lose in the future
if they lose Prospera today.
Speaker 1 (14:20):
On top of filing the massive claim, which is a
waiting of ruling from an international arbitration tribunal, Brimen is
also going hard on lobbying Washington. Lobbying.
Speaker 2 (14:31):
They got folks in Congress, they got folks in different administrations,
the ambassador in Tagusagalpa, they got folks in the State
Department to put pressure on Honduras to let this investment
go forward.
Speaker 1 (14:45):
To get these powerful US players on board. Prosperous boosters
are using some tried and true arguments.
Speaker 2 (14:52):
One of them was that our project is pushing back
against the rise of socialism in Latin America, and we're
pushing back against the influence of China and Latin America,
and we will eventually like uplift these countries out of
poverty and stop migration to the US, and all of
these are themes that resonate really well with folks in
(15:14):
Congress and in some cases folks that are Democrats and Republicans.
So they've used these ideological kind of intersections about what
their project is to get support from sympathetic voices in Washington.
Speaker 4 (15:28):
Has Trump's selection helped prosper.
Speaker 2 (15:32):
They certainly think so, because in November, shortly after the election,
Eric Briman put out a video from Washington.
Speaker 4 (15:41):
And Washington the Faniandla in teresis.
Speaker 2 (15:43):
He had lobbied folks in Congress, and he put out,
you know, a little video in front of the Capitol
building saying that we had a very successful visit and
saying that they're very confident that the new administration is
going to be very supportive of what their claims are.
De la Misa, Aura Inedo early I come to say
(16:05):
in lotremin So they clearly do think that they have
some more backing.
Speaker 1 (16:09):
The exces Montea I went, but Prospera does have US opponents.
In twenty twenty three, Massachusetts Senator Elizabeth Warren and more
than thirty other Democratic senators called on the US Trade
Representative and Secretary of State to intervene on behalf of
the hunter in government.
Speaker 2 (16:30):
They think it's very exploitative, that it's part of this
long history of corporations extracting wealth from countries.
Speaker 1 (16:37):
But those voices are now in the minority. How much
influence can Washington and American lawmakers really wheeled here? Can
they make or break the prosper experiment.
Speaker 2 (16:49):
Yeah, they definitely can. Some of the proposals by supporters
of Prospera have included putting a visa ban on Hunduran officials,
putting sanctions on Hundur and officials, stopping all foreign and
development money aid that movie might be going from the
US to Honduras, basically pulling out all the stops in
a way that they would do against a country that
(17:11):
was really a world state.
Speaker 3 (17:12):
I mean, the US is Honduras is top trading partner
and it's a major recipient of aid from the United States.
You know, the US has a military base in Honduras.
It's the only country in Central America that has a
US military base there. Most of Honduras's exports go to
the United States. You know, they export a lot of coffee, bananas,
some textiles. There's companies like Nike, for example, that make
(17:33):
some of their shirts in Honduras. So I mean it
behooves Hunduras to maintain good relations with the United States.
Speaker 1 (17:39):
Prospera is just the latest example of powerful business leaders
trying to build their own utopian cities. The Silicon Valley
venture capitalist Mark and Dreesen is backing a self sufficient,
sustainable new city in the Bay Area. Billionaire Peter Tiel
wants to build floating libertarian communities in international waters. These
(18:00):
kinds of efforts don't typically get a warm reception and
they often stall. So I asked Umar what prosperous story
says about the trajectory of these movements.
Speaker 2 (18:11):
I mean, it says that in some parts of the
world they are having pushback from different governments. But I
don't know if the idea is going to go away
anytime soon. Prospera itself is launching, or they have launched
something called Prospera Africa. They've got investors. They're shopping in
around to different governments in Africa because they need some
(18:31):
kind of constitutional framework like they had in Honduras to
set up a project there. So I think the idea
is continuing because it is attractive to a lot of
countries who are trying to get foreign investment. But it'll
be probably a game of looking for populations and locals
that might let it happen.
Speaker 1 (18:56):
This is The Big Take from Bloomberg News. I'm Sarah Holder.
This episode is produced by David Fox. It was edited
by Tracy Samuelson, Danielle Balby, and Naomi Shaven, who is
also our senior producer. It was fact checked by Adriana
Tapia and mixed and sound designed by Alex Suguiera. Our
senior editor is Elizabeth Ponso. Our executive producer is Nicole
(19:18):
Beamster Boorg Sage Bauman is Bloomberg's head of Podcasts. If
you liked this episode, make sure to subscribe and review
The Big Take wherever you listen to podcasts. It helps
people find the show. Thanks for listening. We'll be back tomorrow.
Hosts And Creators
Sarah Holder
Saleha Mohsin
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