Arch. Myriam B. Mahiques Curriculum Vitae

Monday, May 3, 2010

What is a “Charter City”?

Guantanamo Bay, Cuba. Image from

Charter City is a concept, an idea created by the economist Paul Romer. Though, it looks like a dream, it is quite possible. Romer is pointing out places in the world with vacant lands to create a city framework with other jurisdictions different than the country where the vacant lot is selected. Interesting idea….

The new “ city” (it could be a conceptual city, it doesn’t need to be as big as a typical city) would be run remotely, using the Hong Kong model and the citizens would be invited from all the poor areas of the world to come there and work (Tim Halbur). In Romer’s opinion, this would be a possibility for poor people to get away from slums, to begin a new life.

“ Charter cities let people move to a place with rules that provide security, economic opportunity, and improved quality of life. Charter cities also give leaders more options for improving governance and investors more opportunities to finance socially beneficial infrastructure projects.

All it takes to grow a charter city is an unoccupied piece of land and a charter. The human, material, and financial resources needed to build a new city will follow, attracted by the chance to work together under the good rules that the charter specifies. Action by one or more existing governments can provide the essentials. One government provides land and one or more governments grant the charter and stand ready to enforce it.” (Tim Halbur, for Planetizen)

Paul Romer provides three cases, as follows:

Case 1: Canada helps a Hong Kong blossom in Cuba

For decades, the Unites States and Cuba have been parties to a treaty that gives the United States administrative control over a portion of Cuban territory straddling Guantanamo Bay. In a new treaty signed by the United States, Cuba, and Canada, the United States could give up its treaty rights, and Canada could take over local administration for a defined period of time.

An administrator appointed by the Canadian prime minister would be responsible for setting up and enforcing the rules that apply in this special territory. The legal protection and institutional stability that the Canadians provide would attract foreign investors and foreign citizens to the city. As the city grows, the Cuban government would gradually allow freer movement of people and goods between the land it governs and the charter city. At the same time, supporting cities and suburbs would grow up on the Cuban side of the city’s boundaries. The charter city itself would eventually return to Cuban control.

In this case, a treaty creating a special administrative arrangement already exists and Hong Kong provides a model for how a city might be governed. An interesting variant would be one in which several countries (e.g. Canada, Spain, Norway, Mexico, and Brazil) stand in place of Canada alone.

Case 2: Australia and Indonesia create a new regional manufacturing hub

In a treaty that Australia could sign with Indonesia, Australia would set aside an uninhabited city-sized piece of its own territory. An official appointed by the Australian prime minister would apply Australian law and administer Australian institutions, with some modifications agreed to in consultation with the government of Indonesia. People from Indonesia, many of them lower-skilled workers, could come live as temporary or permanent residents in this zone, but would remain citizens of Indonesia. A portion of their labor income could be taxed and return to the government in Indonesia. Levels of free public services and welfare support would be comparable to those in Indonesia. As citizens of Indonesia, the Indonesian inhabitants of the city would have no claim on residency or citizenship in Australia proper. They would be subject to the same immigration controls whether entering Australia from this zone or from Indonesia.

Highly skilled workers from all over the world would be welcomed as well, but would be subject to the same immigration controls they would face from their home countries. Australian citizens and firms would be able to pass freely between Australia proper and the new charter city. As part of the treaty, the Indonesian government could agree to award the chance to move to the new city preferentially to residents from a small number of rural areas where people practice environmentally harmful forms of subsistence agriculture and forestry. The government could designate part of the land to be freed up in this way as a nature preserve, setting aside a much smaller portion of the now uninhabited land for a charter city of its own.

Case 3: India opens a competition for charter cities: The central government in India would pass legislation specifying the charter that would apply in any city developed in a new type of centrally administered special zone. It would let different states compete to create such a zone. To be eligible, states would assemble city-sized tracts of uninhabited land and pass legislation removing all local control of the special zone. The state government would then collect a portion of the fiscal surplus generated by the new city.

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