Could Private Cities be the Answer to the Global Migration Crisis?
Back to the future with a new mechanism for a new age
The World is breaking off into islands
I find myself listening to Stevie Wonder’s Rocket Love as my thoughts spill onto this document, key by key. This planet that we have inherited is in a bad, chaotic way: in the midst of a Great Storm, awash with war, pandemics and fragmentation. In less than a month from now the USA’s most consequential election since 1860 awaits us, promising to send us into the second half of the 2020’s with a bang.
Almost everywhere across North America, Europe and the Oceania Region, the doors to the rest of the world are closing, one by one: Australia, Canada, the USA, the UK, Ireland, Germany, Austria, Italy, Poland, Denmark, Sweden. The Post World War 2 zeitgeist is slowly dissipating before us, as the globe that it encompassed becomes unglued. The pressure cooker is close to full blast.
Governments across the developing world are beginning to fold in response - some have fallen apart, while others creep closer to the verge of dissolution with each passing day. Paradoxically, as more instability, infighting and war breaks out, heaping the demand for asylum into the precarious respite of the Rich World, its appetite for such a flow of people wanes precipitously.
In my most recent piece, I carefully laid out why mass migration into the West is a sub-optimal solution for all parties concerned. The sight of more boats arriving on our shores and more new faces settling into our increasingly unaffordable major cities and ill-equipped towns continues to polarize native populations and embolden the more extreme fringes of politics and society. The question now centres around where different nations’ future lie.
On the other hand, what is the long-term solution to this rising tide of movement: is it to throw up walls? Or perhaps, we can build new paths that channel it all in towards more positive and productive uses? From mid-2022 to mid-2023, The United Kingdom recorded an immigration-fueled growth in population of one percent. The highest rate in over half a century, exceeding those of countries like India, Indonesia and Brazil. We actually added people to our country at a rate that was three times faster than our annual GDP growth for a similar period, subsequently making us poorer on a per capita basis.
So I understand what’s at stake. With that said, nationalities and national boundaries aside, these are other human beings we’re talking about. Whom we find ourselves wont to deny entry to for reasons stemming from a mere incidence of birth. There has to be a better way, a third way in private cities.
Private cities: the past and the present
According to the World Bank, private cities (PCs) “designate significant urban areas whose development was associated with at least one large private actor.” PCs operate as de facto and (in some cases) de jure municipalities of sorts. They tend to be managed by private entities and are essentially in the business of governance.
No, you’re not reading an awkward introduction to a sci-fi piece. I’m not describing a concept out of Robocop or Judge Dredd, PCs are real. Examples of them abound across the developing world, including South Africa’s Waterfall City and Steyn City, Kenya’s Tatu City and India’s Gurugram. And they’re only growing in recognition and popularity, with companies like Próspera leading the helm on creating them.
They’re not necessarily anything new either, in many ways the colonialism of yesteryear initially started out as PCs or private territories. Shareholders and employees of the Virginia Company of London completed the landing of the Mayflower 400 years ago (a precursor to the formation of modern America), not English government leaders backed by military forces.
The Dutch East India Company or the VOC owned parts of what are now Malaysia and Indonesia. A number of African colonies, including those of South Africa, Nigeria and most famously, the Democratic Republic of Congo, were also run and ‘owned’ by private entities at one point in time or another. Something that I have previously written about. Indeed, this is the story of most former colonies.
Private actors tended to band together to raise the capital and manpower necessary to launch a hostile takeover of distant lands, with them subsequently requesting the protection and recognition of their newfound colonies from their governments, in a wiley demonstration of asking for forgiveness later rather than asking for permission first.
Fundamentally PCs go beyond the bricks and mortar associated with the term and promise a dynamic governance mechanism. By investing their own money and resources, PC operators and owners have ‘skin in the game’ in a way that is not the case with conventional, municipally-run and taxpayer-financed cities. With these operators boasting the expertise and specialization to dedicate sufficient and targeted bandwidth to raising the quality of the city that increasingly cash-strapped, archaically structured public cities might be unable to compete with.
Such a comparison rings especially true in the developing world, partially explaining why many of them happen to be springing up over there instead of the Industrialized World.
Why can’t we export the governance, legal and technological mechanisms of the most successful economies to the corners of the world most in need of it? Let’s jump into a short case study of a heavily publicized PC in Próspera Roatán.
Próspera Roatán: the model private city
Próspera Roatán is a new private city located on the island of Roatan, Honduras. It functions as a ZEDE (zone for employment and economic development), which is a step above the widely adopted SEZ (special economic zone) in that this development vehicle grants ZEDE operators with a degree of legal autonomy.
The founders and architects of the project include the likes of famed economist Paul Romer, businessman and former Mississippi House of Representative Joel Bomgar and major finance executive Erick Brimen. As a concept, it incorporates libertarian philosophies and elements that promote private sector-led development and city planning. Plans for Próspera Roatán have been in the works since the early 2010’s, with the private city finally getting off the ground on building and development in 2021.
According to Prospera’s website:
the ZEDE framework underpinning the city consists of:
(i) Constitutional Provisions and Acquired Rights
Constitutional protections pertaining to Articles 294, 303 and 329 of the Honduran Constitution grant the “legal, economic, administrative, and political autonomy of ZEDEs” So Próspera Roatán operates with a civil and regulatory code distinctive to that of the rest of the country.
For instance, businesses registered in Próspera Roatán have the options of operating in compliance with national Honduran regulations or those of 20 different OECD (Organisation for Economic Co-operation and Development) member countries1. The city also has its own tax code and sets its own legal minimum wage.
(ii) Legal Stability Agreements
The existence and character of the ZEDE cannot be altered for 50 years as a result of legal stability agreements upheld by the ZEDE Organic law. This is similar to elements of the special lease agreement granted to the British for control of Hong Kong in the mid-19th Century under the Second Convention of Peking.
(iii) International Investment Law Protection
As a US company, Honduras Prospera Inc. is also protected by multiple US and international investment treaties.
The data on Próspera Roatán and economic development
2Over 1,000 acres of land fall under the city, encompassing more than 34,000sqm of finished real estate that is home to 1,700 residents hailing from about 40 countries, who have created over 200 businesses that support 950 jobs largely staffed by locals. Prospera has also added $100 million in growth and economic activity to the island and country.
The city offers visa-free visits for up to 90 days for citizens from countries all around the world, and the local airport (A mere 20 minute drive from Próspera City) provides direct flights from a number of major global hubs.
21st Century Ellis Islands
Here’s a proposal: commission the creation of PCs in accordance with a ZEDE framework on select islands that serve as a third places for would-be migrants, refugees and asylum seekers. The locations would be managed by proven developers and city planners who aim to ease migration pressures through economic development.
War, poverty and the forces of oppressive regimes around the world are contributing to more people testing their prospects abroad. In Africa alone, four million people call refugee camps ‘home’. These safe havens are usually supported and managed by multilateral organizations such as the UNCHR. They act as temporary shelters for individuals and families fleeing from war or persecution, allowing them to rest their heads and regroup for entry into a new nation or a possible return to their home country.
However, lots end up staying in these camps for years, even decades on end as some experience difficulty with migrating elsewhere. Nearby countries might refuse to host them or they lack a safe and secure route to other places, among other issues. It’s not uncommon to meet children and adults who have spent their whole lives in these places.
The camps themselves usually operate with thin resources. Families are nestled in rudimentary tent enclosures, worn-out tin shacks not exceeding 110 sq ft in size, or slightly more spacious container houses and canopies. Often located nearby borders for obvious reasons, inhabitants are lumped into remote, rural areas where they lack regular access to electricity and clean sanitation.
Across Africa, camps tend to be based inland, within rough, arid geographies that make farming without modern technology and tools close to impossible. Leaving them dependent on the assistance of the lead organizers, charity and donations for survival.
The current model unintentionally warehouses refugees. By transforming camps with the PC framework, millions of people are granted the freedom to fully tap into their skills and networks to earn a living with a shot at a decent quality of life.
Over the years, as the international refugee crisis has ballooned due to wars in the Democratic Republic of Congo and Sudan, along with climate change hastening desertification, more organizations and specialists are beginning to turn their attention to reform.
A few years ago, the Brookings Institution released a commentary piece titled ‘Build cities, not camps: A proposal for addressing refugee crises’ that explores implementing a ‘sustainable charter cities-in-exile model’ (SCCEs) that “promote refugees’ self-reliance and facilitate their integration.” It calls for coordination and engagement from governments, international development agencies, multinationals and the broader private sector to create fully functioning and semi-autonomous cities.
An organization called Refugee Cities is dedicated to carrying out Brookings’s vision. They advocate for what they term ‘sustainable development zones’ (SDZs). SDZs promote economic and political participation within a designated area, with them working with countries like Ethiopia and Libya to make this a reality.
To recap, the concept of the PC enables:
People the right to life, liberty and the pursuit of happiness;
The practice of pro-market values and principles within a noted jurisdiction as modelled and governed by lead private developers and operators;
The full embrace of property rights and labour participation, catalyzing production, services, trade and overall economic activity.
PCs also possess a certain level of agility simply not available to governments bound by international treaties and the politics of the day. With accommodating partners, PCs can take hold relatively quick, making a meaningful difference to people’s lives almost immediately. In a migration context, results could represent a complete 180 from the disastrous efforts attempted by recent governments.
Take the UK’s infamous and quashed Rwanda Bill. The recently unseated Conservative Government intended to send people landing in the UK to claim asylum off to Rwanda in lieu of their applications being reviewed. But politics and legal complications meant that after spending what is reportedly nearly $1 billion preparing the holding facilities and accompanying measures, only four asylum claimants were sent as part of the initiative. For the same amount of money, you could have had 10 Próspera Roatáns headed under the PC framework, based on the $90 million of investment which has so far been raised under the project.
Private cities as hubs for investment and migration from the Rich World into developing regions
PCs such as Próspera Roatán have gone on to draw money and settlements from Western and other industrialized countries. Its novel mechanism, light-touch regulations, low taxes and relatively cheap land and properties present lucrative and exciting opportunities for those willing to take the plunge. Different private cities - in cooperation with host governments - can design residence policies that attract entrepreneurs, tradespeople, engineers, educators, healthcare workers and other skilled professions from around the globe.
Such a move facilitates the dispersal and transfer of capital, technology, skills and network connections. An oft overlooked observation is that the migration of people from more economically advanced areas into poorer ones can pay vast dividends. Professionals bring with them their experience and know-how, along with tech and machinery that may not be widely available locally. Starting from the more simple and everyday in smartphones and computers, and sewing machines to the more pivotal relating to farming and building equipment, shelter appendages and more heavy duty industrial and mechanized tools. Addressing infrastructure shortages and unlocking big efficiency gains.
Migration into PCs - particularly within a refugee camp context - also provides additional sources of revenue for the city. Proceeds from land purchases, residency and business permits can be recycled into investing in and upgrading the PC for its residents. For example, Próspera Roatán charges foreign residents (non-Honduran nationals) for annual e-residency permits ($130), as well as resident permits ($1,300) among other charges.
Transforming migrants and refugees from political hot potatos into invaluable assets
As we stand at the crossroads of a fragmented world and a looming migrant crisis, the establishment of private cities offers a visionary yet practical solution. These cities embody the spirit of collaboration between the public and private sectors, creating environments where displaced individuals can rebuild their lives with dignity and purpose. By exporting effective governance, legal frameworks, and technological advancements to regions in need, we not only provide immediate relief but also sow the seeds of long-term prosperity.
Embracing private cities is more than a humanitarian gesture; it's a strategic investment in a more equitable and connected world. Let us seize this opportunity to redefine our response to migration—transforming challenges into catalysts for global progress.
I really liked how you used parallels from history to demonstrate that the private city concept isn't something novel. In truth, after reading your article, the discovery of most of the earth pretty much follows the same guidelines; which, if I had to boil it down to one thing, is the investment in people.
You know Magatte Wade? I know she'sinvolved with prospera and is trying to bring it to Senegal