Prosperity Zones & Private Cities Newsletter # 11
An interesting year is coming to an end. A lot of things have happened. Generally speaking, we have two trends moving in our direction.
The Trend is our Friend
First, the idea is gaining traction that an SEZ (special economic zone) with its own commercial law and independent courts is attractive to investors. This started in Dubai with the DIFC, then Abu Dhabi followed with the ADGM, and now we have a similar model in Kazakhstan, in Qatar, it’s coming soon in Georgia and of course in Honduras. Other related projects are in the pipeline.
The logical next step will be to integrate more areas beyond commercial law into these models. Why? Because commercial law is not a stand-alone law. It is embedded in the civil law/common law of the respective jurisdictions. Thus, it’s inevitable that the zone courts will have to deal with general questions of private law. In addition, especially if family and inheritance issues are involved, like with family-owned companies, this will have an effect on the whole field of family law and inheritance law.
Therefore, the DIFC has “upgraded” recently. Now their package includes family law and inheritance law, which is based on common law and goes to the DIFC courts. As it turns out, putting these issues under sharia-law is (no real surprise) not really suited to attracting high performers as residents. Actually, other parts of sharia law are also not really convincing either, for example when it comes to criminal law or the mandatory arrest of defaulters. So we can safely predict that sooner or later these legal areas will also be covered by a special regime and the respective courts in SEZs. Special zone projects, which insist on the application of sharia law instead, like recently announced for the NEOM project in Saudi Arabia, will not be competitive unless they offer massive advantages in other areas. In the long run, the same is true for all SEZs that are subject to regional laws differing substantially from international best practices.
The second trend is the continued increase in the number of people unsatisfied with the way they are governed. They discover that a change in government does not really improve their situation, even if they thought so before. More and more citizens have the impression that they have zero say in how the country is governed, that there are more freedom-restricting rules and regulations every year and that the people making decisions on their behalf are not necessarily the best qualified. In many places, the trust in the state’s ability to provide security, resolve disputes and even provide everyday administration, is shrinking quickly (assuming it was there in the first place). So people are becoming open to new ideas.
Now if you combine those two trends, they are clearly pointing in the direction of Free Private Cities and autonomous Prosperity Zones (or whatever you call them). In Hong Kong, a huge proportion of the residents are on the streets to keep their contractually guaranteed autonomy intact. Worldwide, there is a demand for more self-governance, there is a demand for smaller entities with specific rules and there’s an appetite to try out new solutions.
What’s happening on the Front?
As you know, we are currently investigating and negotiating with governments in Africa and Europe about the establishment of Free Private Cities or at least special zones with substantial autonomy. (Since some of you are asking: For any information on the Prosperity Zone project in Honduras, please contact neWay Capital directly.)
Given that we already have more than 3,000 active SEZs in the world and a lot of countries are trying to attract investment, people are clearly willing to listen. Ideas now being taken seriously include privately operated migrant cities as a solution to the migration crisis and as a method for developing countries to leapfrog innovation.
Meanwhile, my ideas have reached the mainstream. Recently, a high-ranking advisor to the German government quoted me when proposing to create “islands of good governance” as public-private-partnerships in supportive African countries. Furthermore, I was invited to a NATO conference to present Free Private Cities and Prosperity Zones as means to improve the security situation in the Mediterranean. Finally, I was able to present the model at the annual FEMOZA conference in Monaco, the world organization for free and special economic zones. This speech created demand for such a model in at least one more country.
On the FEMOZA conference during a panel discussion
The truth is that establishing a Free Private City or a Prosperity Zone requires passing laws and often even amending the constitution. This makes the process difficult and lengthy, but this is the way the game is played.
The second best option would be a “SEZ plus”, with own courts and own legislation, the latter extended as far as possible beyond commercial issues. Ideally, a private company is governing the zone and handling all administrative issues with own personnel.
The third best option and the easiest one would be a de-facto-private-city. There is a contractual agreement, comparable to a Homeowners Association, through which all members agree on a set of rules including an internal dispute resolution mechanism. The private city would also provide for security. However, all the laws of the respective state do still apply and its authorities would be competent in all areas.
We are planning to publish templates of necessary laws, legal amendments and a civic contract online in 2020. These will serve as public blueprints for creating a Free Private City/Prosperity Zone, including materials for the other options mentioned above. Thereby we are providing everybody with the basic tools to start their own projects and make the world a better place. All the while, we stand by ready to help, either with our own consultancy, TIPOLIS CONSULT, or through direct involvement in projects with Free Private Cities Inc.
The decision to create an ambassador program announced in our last newsletter is already getting traction. Initially, there were only nine ambassadors, all in Europe and the Americas. Now, there are 21 ambassadors in total, with at least one in each continent of the world.
I am very happy that we could convince such respectable people to support our idea and spread the message. I invite you to have a look at the ambassador section of our website to find out who is our ambassador closest to you. He or she will be the right person to speak to if you have a project idea in your part of the world. If you click on the markers, the name, photo and a short description of the respective ambassador will pop up. If you are interested in becoming an ambassador yourself, please contact us.
Architecture and Design
The call for architects in our last newsletter has been successful. We are already working on a standard-masterplan for future projects, together with a renowned architect. This will be a multi-phase scalable design, as explained in the Free Private Cities book.
We are now searching for interns who want to acquire professional experience and learn market-based urbanism in practice by assisting us on this project. If you are an architecture student or graduate, please contact us. (We’re also open for this being a thesis topic).
Lustica Bay in Montenegro, a new de-facto-private-city. The architecture seems to be inspired by Léon Krier and his New Urbanism, like our upcoming architectural design .
Spread the Idea
In the market of living together, Free Private Cities are currently the only non-totalitarian alternative to Western democracies. Once the idea is in people’s heads, it will stay and will be implemented sooner or later. That is why it is so important to spread the concept. Free Private Cities are also an opportunity for developing and emerging countries to catch up more quickly and can contribute to easing the migration crisis.
For the last weeks, we’ve been especially busy with optimizing our new website and doing the last design changes. Now that we’re done and have a presentable homepage, we can return to what we like doing the most: spreading the idea. If you’d like to help us on this new “marketing offensive”, please follow us on our social media channels (links on the footer) and help spread our content.
We also welcome community engagement. If you’d like to help subtitle our videos, translate our articles or even the book to your mother language, please contact us. (Specially if you speak Dutch or Polish, since we’re currently working on translating the book to these languages).
If you are part of a media platform and would like to publish an article, record a podcast or make a video about Free Private Cities, please contact us as well.
Thank you for your continued interest and support. For any questions, proposals, criticism, etc. you are welcome to write at [email protected].
Monaco, December 2019