‘Back Home’: Hondurans Fight Against Crypto Colonists | Honduras
Right in front of Wilford Webster’s hilltop home, waves crash over the turquoise waters that ring the reef offshore.
“Look at this,” he said, his arms framing the panorama. “Who wouldn’t want this?”
To the left is the Crovish Rock community, a few hundred mostly English-speaking black Caribbean people who live in raised clapboard houses on ancestral land.
To the right is a security booth with cameras, a gate and a guard. A little later, a model house and headquarters for a controversial emerging town sit amid a landscape that has been ravaged by a bulldozer and excavated deep to establish the next phase of construction.
Perched on a cliff where the road divides the countryside as much as the community, Webster’s House is at the center of the battle over land rights and sovereignty that has galvanized Honduras.
It’s also a symptom of a broader phenomenon across the region, where foreigners – often crypto-enthusiasts, liberals or both – have flocked in recent years, supporting controversial projects – such as the proposed “Bitcoin City” in El Salvador – threatening to displace locals and Draw comparisons with the colonists.
Webster has a message for those who have moved in next door: “Go home.”
When the new Honduran government repealed a pair of laws in late April that allowed the creation of semi-autonomous regions called Zede, it sent a similar message. But investors in Zede on Roatán, better known as Honduras Próspera, objected to the move.
“When investing in Honduras, Honduran Prospera, Inc. has relied on specific legal stability guarantees from Honduras that the rights and powers provided by Zede’s legal framework will remain in effect for Prospera for many decades,” the investors wrote in a statement published on May 4. May, adding that they expect Honduras to “respect its obligations under legal stability agreements and international treaties.”
The result is a confrontation where investors gamble millions, the government could risk a costly lawsuit and the fate of the affected communities hang in the balance.
The controversy goes back nearly a decade, when the Honduran government reformed the constitution and passed a law that paved the way for the creation of the Employment and Economic Development Zones (Zede). The idea was truncated from economist Paul Romer’s proposal for charter cities, which the Nobel laureate hypothesized could promote development in poorly managed areas.
Romer suggested that a foreign state act as guarantor for the administration of the chartered cities. But Honduran law instead allowed companies to build a private city.
The issue remained in the background until 2020, when word broke that the first charter town had been created at Crovech Rock – to the astonishment of the villagers. “We didn’t even know what Zede was,” said Louisa Connor, president of the local community association.
The investors first appeared at Croveish Rock about three years ago as a charitable foundation, opened a community center and talked about plans to build a nearby tourist center. Residents said they saw no reason to be suspicious.
“There is nothing out of the way for people to come in and start building around us or start projects,” Connor said.
Located 65 kilometers (40 miles) north of the mainland, Roatan is one of the top Caribbean tourist destinations and a haven for expats, known for its white sand beaches and world-class diving. Above and below the beach are foreign-owned vacation homes and resorts.
Prospera representatives said they notified the community of their intentions in June 2019, citing a document signed by a few dozen residents that contains the word Zede, but does not explain what it is. “They cheated on us a lot,” Connor said.
Further fueling the situation, Própsera posted on its website drawings of three phases of expansion that appeared to include Crawfish Rock Center within its jurisdiction, raising concerns that investors could invoke a legal provision allowing for the confiscation of land owned by a community that has lived for generations. Prospera’s representatives promised that they would not go this way, but their words provided little comfort.
As the controversy spread across the country, a movement was born that demanded protection of land rights and denounced the ceding of sovereign land to foreigners and corporations.
President Xiomara Castro, who was elected by a landslide in November, has made Zede a standout issue in her campaign. When Castro agreed to the cancellation in April, she called it the most important day of her presidency so far.
For the people of Crovish Rock, it certainly was. “Words can’t describe how happy we are,” Connor said.
But the joy did not last long. Just before the cancellation, Próspera announced a new round of investments totaling $60 million and the adoption of cryptocurrency bitcoin as legal tender. In the weeks and months that followed, the company continued to operate as if nothing had changed, pressing ahead with construction projects and sticking to its plan to build a liberating oasis of sorts.
Government officials said any Zede company currently in business has one year to fit into another type of legal framework. But investors cite a termination clause in Zede’s law that gives them a minimum of 10 years, as well as other international trade agreements that they claim give them further contracts.
Legal analysts consulted by The Guardian suggested that in order to avoid a lawsuit, the government could either strike a deal with investors, or challenge whether Zedes was created under the now-defunct law.
“I categorically think cancellation is a good thing, but it doesn’t end here,” said Gustavo Solorzano, legal advisor to Cohep, the country’s largest chamber of commerce. “Now the state has to review these concessions, and it would be better for the state to check if all the legal requirements have been met, and if not, proceed to revoke the concessions that were handed over.”
In the meantime, the crayfish population remains vigilant. “We have our eyes open,” Connor said. “We don’t trust anyone.”