Model city to use laws of Texas

Some supporters of a plan to build private cities in Honduras have described it as creating "a little Canada" in the country.
It turns out the backers of the first city to win government approval want to create a "little Texas" on the country's Caribbean coast.
I've written about the model city plan here and here. The notion is that the private cities would be a chance to start from scratch, with the rules made by technocrats and the investors. Instead of fixing Honduras' problems, you create new states within the country with different laws, policing, education and health systems and tax structures. Crime and corruption would be banished. The constitution would apply, but basically the owners would have something close to their own country to run.
That raises obvious concerns. The interests of the owners and investors might best be served in ways that are bad for Hondurans living in the new cities.
But the idea is appealing in a country facing widespread poverty and weak institutions of all kinds. 
The first developer - owner? - is off to bad start. 
MKG Group hasn't offered many details in Honduran news reports or on its website.
But CEO Michael Strong was more forthcoming with, which presented this report.
 �Once we provide a sound legal system within which to do business, the whole job creation machine � the miracle of capitalism � will get going,� he said.
And the new legal system, separate from laws on the rest of Honduras, would be based on Texas state law, because it has few regulations.
�It will be Texas law with more freedom of contract," Strong told Fox News. "Texas scores well on state economic freedom rankings,� he explained.
Our goal is to be the most economically free entity on Earth,� he said.
Music to libertarians' ears. But does that mean no minimum wage, no employment standards, no health and safety rules?
Strong also said the new city would have no income, sales or capital gains taxes. (Honduras' existing factory zones offer foreign business investors 10 years of no taxes, although income taxes still apply.)
Which raises questions about who will pay for the vision of better health care, education and policing. 
The biggest problem might be where MKG has chosen to share its plans for the new city.
The private city plan is controversial and facing political and legal challenges in Honduras.
Yet the report is in English and available on the Internet. Few Hondurans speak English, and about 85 per cent don't have Internet access.
The concerns about private cities are, in part, that the owners won't care about the interests of Hondurans, or will at least put the interests of foreign investors first.
MKG's decision to share details with Fox News and an English-speaking audience, before informing Hondurans, will add to those concerns.

Dumb attack ads, and the real tax-cut winners

I'm baffled by the B.C. Liberals' focus on attacking the leaders of the other parties. So far, the efforts have looked amateurish and cynical, and have failed utterly to change public opinion.
Surely the critical issue for the party is finding ways to make people see Christy Clark more positively, not trying to slag the other guys.
The last Angus Reid poll found 28 per cent of British Columbians approve of Clark's work as premier; 53 per cent approve of the job Dix is doing as opposition leader. It's hard to see how any collection of low-budget attack ads are going to drag Dix down to less than 28 per cent.
There's certainly potential in pushing the NDP to commit to positions in advance of the election. (Though Dix will then remind people about the Liberals' promises not to bring in the HST, and ask what their positions are worth.)
But the attack ads seem pointless.
And they risk raising unintended issues.
The latest web attack, for example, says "When the NDP left government, a family of four earning $60,000 a year paid $1,970 more in provincial income tax than they do today," citing budget tables.
That's true enough. But the budget tables also calculate total provincial taxes - MSP, sales taxes, carbon tax.Those other taxes and fees went up $1,463 under the Liberals.
The family still pays less to the province - but $507 less, not $1,970. It's a dubious approach for a party trying to claim Dix is the one who can't be trusted.
And the ad opens the door to other tax questions.
The tax changes since 2001 under the Liberals have meant low income people pay much less to the province - 50 per cent less for a single person earning $25,000, 40 per cent less for a family of four earning $30,000.
But the next biggest beneficiary, given the budget examples, is a single person earning $80,000. He, or she, pays 28 per cent less than he did in 2001.
And a family of four earning $90,000 has received a bigger overall provincial tax cut - in dollars, and as a percentage - than a family earning $60,000.
Worse, the smallest reduction has been for a senior couple earning $30,000 in pension incomes. They're  paying three per cent less - $1.50 a week in tax relief.
Then, of course, there is the bigger assumption in the ads that tax cuts, in and of themselves, are automatically a good thing.
That family of four earning $60,000 is paying about $10 less a week to the province than it did in 2001. Maybe many of those families would consider it good value to pay the $10 if health care or education was improved for them and the people they care about.

Hey Honduras, you're making an airport mistake

I don't take public positions on what should or shouldn't happen in Honduras, mostly because I don't know anywhere near enough. (Though I've been surprised at the willingness of bloggers thousands of kilometres away in Canada to make firm and unsupported assertions about the country.)
But the plan to relocate the Tegucigalpa airport is an exception, in part because there's directly relevant Canadian experiences.
Tegucigalpa - Tegus - is the capital, a city of 1.3 million people. It's tightly nestled in a valley, and surrounded by mountains.
Which is not a good thing for airport construction. The existing airport, Toncontin, regularly makes the world's 10 scariest airport lists. A History Channel show, Extreme Airports, ranked it second. (Tenzing-Hillary Airport in Lukla, Nepal, topped the list.)
The Tegus approach requires pilots to skim the hills, make a sharp u-turn, plunge steeply and then hit the brakes hard once they're on the ground. Pilots receive special training if they're assigned to the route.
When we flew into the county in January, we were sitting next to a young Honduran flying back from the U.S. We took it as a bad sign when he began fervently praying as we started our approach.
But, on the positive side, the airport is just six kms from the city centre. And, while landings and takeoffs can be challenging, there hasn't been an 'incident,' as airlines like to say, since the runway was lengthened in 2009. (After a 2008 crash that killed five people.)
The government has decided it would be better to move the airport, which might not be a bad idea. But it has also decided to build a new $125 million airport at a military airfield at Comayagua, 80 kilometres from Tegucigalpa. (The airfield is used by the Honduran airforce and U.S. units.)
It's not an easy 80 kms to travel. The highway climbs through steep mountains and the entrance to the city is chronically congested. The trip is certainly over an hour. Anyone catching a flight out of Tegucigalpa would have to allow much more time in case of traffic problems.
This should all sound familiar to Canadians. In the mid-1970s, governments spent about $500 million building Mirabel Airport about 40 kms from Montreal. It was a complete flop, despite good highways, because travellers and airlines wanted to keep using the existing airport at Dorval, about 15 kilometres from the city. There is little or no use by airlines, and the runways have been leased for car racing.
ALG Europraxis, consultants hired by the Honduran Commission for the Promotion of Public-Private Investment, have offered warnings about the plan. Anything over 40 kms is considered a remote airport, the firm warns.
So I'm breaking my rule about the airport plan. Don't do it, Honduras.

Honduras' mysterious private-city plan

So who�s behind the mystery Canadian company ready to put up big money to build a private city in Honduras?
The concept�s appeal is clear. The �charter cities� being promoted by the Honduran government are as close as you could come to setting up your own country, with your own rules.
The cities would mostly have their own laws and taxes and police forces. They might, for example, contract with Canada to provide policing. They would set up their own schools and health systems. 
There would be an appointed governor and, at some point, an elected council to approve the laws recommended by the governor and city investors. But, during the startup particularly, the investors will decide on policing and schools and taxes and most everything else, limited only by basic constitutional rules. (The private city law is here.)
I wrote about Honduras� interest in the idea a few months ago. The plan has now, apparently, moved into the action phase. The government has announced three sites, and signed a letter of intent with an unknown U.S. company - MGK Group - to start development on a city, most likely on the Caribbean coast.
But MGK, while saying it�s a consortium, hasn�t said much about who is in the group. It�s putting up $15 million to start on infrastructure, and hopes businesses will quickly move into the city. That�s not enough money to do much.
Press reports also say a major Canadian investor will soon be revealed.
The whole idea has been pitched by libertarian and technocratic theorists who see it as a way for countries like Honduras to start fresh. Cities would work better, they argue, if smart people made the rules starting from scratch. For a country like Honduras, where most institutions work badly or not at all, it�s an appealing pitch.
Once safe, secure cities with working systems were established, proponents say, businesses and Hondurans would move to them, the economy would improve and everyone would be better off.
As I noted in a previous post, it�s the kind of idea I would have dismissed out of hand before I lived here. I�m not so sure anymore.
But now that the first proposal, sketchy as it is, is out there, the problems and becoming more evident and the debate more intense.
One obvious problem is that countries that need model cities are much less likely to be able to manage and control the process.
The government�s legislation calls for an independent Transparency Commission to oversee the development process, particularly until the cities are large enough to have elections. 
The commission would appoint the governors - though the country�s president gets to name the first one. It would approve or disapprove the governor�s decisions, oversee the appointment of judges and generally make sure things didn�t spin out of control.
The government signed a memorandum of understanding last year that established the first Transparency Commission, an attempt to reduce concerns about oversight. It was to be headed by economist Paul Romer, an advocate of the cities, well-respected as a good, independent choice.
But Romer and the group have, politely, backed away. Their positions were never made official, and they weren�t consulted on the agreement with MKG or any aspect of the plans for the first city.
A key safeguard has already broken down.
The private-city law is also already facing constitutional challenges, mainly arguing it undermines Honduran sovereignty. It�s become a political issue as the country moves through it�s 16-month-long election campaign. 
And there are almost certain to be disputes over ownership of whatever land is chosen for the city. MKG says it won�t rely on land grants from the government, so presumably will buy land or work with existing owners. But land title is murky in Honduras, and clashes are frequent, and often violent.
The vision was for shiny new cities in Honduras - a �little Canada� in the middle of the country, a proponent suggested in a Globe and Mail column, a place where people would live and work happily and the economy would thrive.
The reality, at the moment, looks a lot more like another factory zone, offering low or no taxes and few rules.
If the project moves forward at all.

The cancelled fall sitting bad for business community

David Schreck draws useful attention to a significant effect of the cancellation of the fall sitting of the legislature.
The rules for the return of the PST next April have still not been set, more than a year after a referendum ordered the HST's  repeal.
A fall sitting would allow a full debate of the planned tax regime, and a chance for businesses affected to identify issues.
But instead, according to the Finance Ministry, a proposed version of the legislation won't be introduced until December, and it will be passed in the abbreviated spring session, less than two months before the tax regime changes.
That is neither prudent, nor competent. The tax regime is important, and should be debated. Businesses need more than two months to prepare. The government has had lots of time to get the legislation ready.
And it is notable that the government took 11 months from the time it announced the HST until consumers started paying, but says it needs 19 months to return to the PST.
There are other reasons for a fall sitting. The Liberal government forced legislation through without real debate in the spring, and has admitted the rush produced flawed laws that have to be changed. It would have been better to put those bills off to the fall.
The government always claimed the fall sittings would be used to introduce bills and allow public comments before they were passed in the next session - a good idea.
And Finance Minister Mike De Jong announced this week that more than $1 billion in budget changes would be required because the government's forecasts were wrong. Those spending cuts, or tax increases, should be debated in the legislature, not behind closed doors.
The legislature serves another function. MLAs - of all parties - have the chance to raise issues important to people in their ridings, and ask questions.
But those chances have been increasingly curtailed by the current government.
Between 1992 and 2000, the legislature sat an average of 77 days. Since 2002, that has fallen to 59 days. In the last three years, the legislature has averaged 47 sitting days.
That suggests a government without much of an agenda. And one unwilling to have its policies and actions subjected to debate.

Shelter allowances, and the government as slum landlord

The CBC report on terrible problems in public housing in Vancouver's core is worth reading here.
It's shameful for government to be a slum landlord, taking 57 per cent of people's income for dirty, dangerous accommodation. The CBC reporters went into the BC Housing buildings, run by non-profit Atira Property Management, and found cockroaches and feces and dirty needles, doors with no locks and other problems.
The situation appears to be worst in three downtown buildings BC Housing bought five years ago, promising to renovate them. The promises weren't fulfilled. They haven't been fixed up,and there's not enough money to manage or maintain them properly. (The government announced a federal-provincial reno plan in the spring.)
The report also notes a potential conflict. The buildings are among 13 managed by Atira. Its CEO is Janice Abbott, who is married to BC Housing CEO Shayne Ramsay. The management contract has never been tendered. (The relationship began after the contract was awarded.)
Housing Minister Rich Coleman says Ramsay plays no role in any decision about Atira. But he's less clear about who does - people who work for Ramsay, or with him?
It's a problematic situation on other levels. Any organization dependent on government funding is reluctant to sound the alarm when things are going terribly wrong, fearing reprisals. But Abbott and Atira are in an even more complex situation, given the personal relationships.
But I wouldn't blame Atira. No one would could run these buildings with inadequate funding. The tenants are, to put it mildly, difficult, many with addictions and mental illnesses, diagnosed or not. The buildings are substandard.
There's another major issue here. Atira's residents are on disability or income assistance. They sign the shelter portion of their allowances over as their rent.
But those allowances are obscenely inadequate. A single person gets $375 a month for housing. As this case demonstrates, landlords - even subsidized nonprofits - can not even provide a desperately grim slum room at that rate. (Families are as badly off. A disabled mom trying to raise two children gets $660 a month for housing. Those kids are going to grow up in a dangerous, crappy apartment in a rundown building.)
The shelter allowances haven't increased since 2007. The Liberal government actually cut them in 2002. Rates today are basically where they were in 1995, despite soaring housing costs over the last 17 years.
Speaking of obscene, it's useful to look at what MLAs think they need for a second home in the capital. (The legislature met for 48 days last year.) MLAs voted to give themselves up to $1,583 a month for housing in Victoria. They think a disabled British Columbian should be able to find housing for $375.
If government wants to fix the problem, a start would be shelter allowances that reflect reality. That in turn would allow landlords - whether nonprofit, like Atira, or private - to cover their costs and offer something above slum-level housing.

Dire warnings of lost jobs because of minimum wage increases proved wrong

When Christy Clark made the long overdue commitment to raise the province's minimum wage, the warnings of job losses came from the usual suspects.
The Canadian Federation of Independent Business predicted 32,760 to 199,560 lost jobs - a catastrophe. (That's based on CFIB's projection of jobs lost for each 10 per cent increase in the minimum wage.)
The Fraser Institute projected job losses of 26,097 to 57,194.
So what happened?
In April 2011, the month before the first of three phased minimum wage increases, 2,273,000 British Columbians were employed. Last month, StatsCan reported 2,323,000 people were working in the province.
You could argue that the jobs were still lost because of the minimum wage - that the number of people working would be even higher if the minimum wage was still frozen at $8, as it was since 2002.
But not very convincingly. B.C. job growth was 2.2 per cent, compared with a national average of 1.3 per cent. If the CFIB's mid-point projections were accurate, then employment in B.C. would have increased 5.5 per cent without the minimum wage hike - more than four times the Canadian average. That's not credible.
Minimum wage opponents could point to the loss of 29,000 part-time jobs in the period. But part-time work was down across Canada, and B.C. gained 79,000 full-time jobs.
The job numbers raise another question. The period covered is basically the same as Clark's time as premier, which has featured a jobs' focus. The increase in employment is better than the Canadian average, and growth in full-time employment is much better - up 4.5 per cent in B.C. compared with 1.9 per cent across Canada. (Part-time job performance was worse than the Canadian average.)
So why isn't Clark getting the credit? (A poll today confirmed her ranking as the second least popular premier in the country.)
Partly, perhaps, because the Liberal government's overall record is still worse than average.
There are still slightly fewer people working in B.C. than there were four years ago, when the recession was beginning to bite. Across Canada, employment has increased by 2.5 per cent in the same period.
The gap is even greater for full-time jobs. B.C. full-time employment is down two per cent; the Canadian average is up 1.9 per cent.
And partly because voters have come to recognize that governments have much less to do with job creation, and job losses, than politicians like to claim.

Cabinet shuffle, point one: Say you'll run again, and get extra pay

I make it 29 Liberal MLAs who have yet said they will not be running next year. The cabinet shuffle left only two without posts of some kind - Randy Hawes and Colin Hansen. You can now count them as retiring.
That means every one of the 27 Liberal MLAs who intend to run again got a position of some kind. (Which brings to mind this week's Time Colonist editorial on the MLAs' club.)
It's a pricey approach by Premier Christy Clark. She gets an extra $92,000 a year as premier, on top of MLAs' $102,000 base pay.
Sixteen full cabinet ministers will get an extra $51,000 a year each. Two junior ministers will get an extra $36,000 each. And nine parliamentary secretaries - sort of helpers to cabinet ministers in specific areas -  will get $15,000 each.
All in, the extra pay amounts to $1,115,000 on annual basis (though the election is next May, so they won't have the jobs for a full year).
The average extra salary for the 27 MLAs expected to run again is $41,300 - about $3,000 less then the average wage in the province.

Correction: Sorry, I forgot Liberal MLA John Slater (Boundary-Simalkameen) who is also left out of the money list and has not yet said he won't be running.

Media should ban the blight of email pap 'answers'

It's time for the media to push back at the epidemic of stupid, self-serving email responses to questions from politicians and government.
Once, not long ago, journalists called government for comment from officials or ministers They either got the chance to ask questions, or reported the government had no one available to comment.
Then the communications people came up with a better ploy - for them.
Email the questions, they said, and the minister or department will email answers.
And foolishly, many reporters and media outlets said yes.
Vancouver Sun columnist Peter O'Neil gave a great example of why that has been a really bad idea in his blog.
Last week, he reported the National Review Panel assessing the gateway pipeline is worried that Enbridge's various pledges to take extra measures to increase safety are all voluntary. The company, or future managers, could simply decide not to do them.
So the panel asked Transport Canada to look at ways of making the requirements binding. The most obvious solution would be to change the pipeline regulations.
O'Neil wanted to know if Transport Canada would do that. He tried to ask Transport Minister Denis Lebel.
Instead, he got this email response from "a spokeswoman:"

"I can tell you that our government is very supportive of the Joint Review Panel as it provides an independent and comprehensive evaluation conducted by scientists. Government officials are cooperating with the Joint Review Panel to ensure it has the information it needs. To that end TERMPOL (part of the panel review) recently responded in a clear and transparent fashion to an information request from the JRP. This kind of dialogue is essential to ensuring that this comprehensive evaluation is done scientifically, on an independent basis."

That kind of non-answer is the norm. And while O'Neil just reported Transport Canada had no comment on the issue, too often reporters actually use pieces of these emails, even when they say nothing.
And since the practice works so well in avoiding questions and managing information, it is spreading to companies and other organizations.
The solution is simple. The media should just say no when offered an email response and report the government or organization would not provide the minister or anyone to answer questions. If additional email answers are needed to provide technical information or detail, that's fine.
Politicians are brilliant at not answering questions - far better than most reporters are at asking them.
But they should at least get the chance to try to get answers.

Like the auto club, but with shotguns

I've spent a lot of time telling people that Honduras isn't really as dangerous as the news reports make it sound.
Yes, it has the highest murder rate in the world. But a lot of the killings involve disputes between gangs and people in the drug business. They're just as dead, of course, but if you aren't in those worlds, you aren't at risk. (In El Salvador, the two main gangs have reached a truce, and the murder rate has fallen by two-thirds.)
That's not to downplay the impact of crime in the major cities. The gangs are into extortion, and murder is part of the business model. And robbers are casual about killings.
Still, the crime reports are overblown, I've maintained. Copan Ruinas at 1 a.m. is safer than Victoria when the bar crowd hits the street on a Saturday.
But this week I was stopped by a half-page ad in La Prensa. It was for a BCAA-type service, I thought, based on the woman peering beneath the hood of her car, stopped at the roadside.
The company didn't offer roadside repairs.
Instead, it would dispatch two guys on motorcycles, with body armour and shotguns, to guard you. The pictures above tell the story. (Sorry about the poor quality.)
It's a good deal - $2.50 a month, and you can call them 10 times a year. It would certainly help in settling questions of responsibility after a fender bender. (Unless, of course, the other driver also had the service.)
But really, a country is in trouble when people feel it's worth paying for armed response when they run out of gas, rather than a service that would send a tow truck.
There are lots of signs that people have lost confidence in the state. In the big cities, razor wire and electrical fencing tops high walls around houses and armed guards open the doors for you at many restaurants. Go to buy a bag of chips at the corner stores, and you shop through a barred window.
There have been lots of efforts to fix things since we've been here. The government called in the Chilean police for advice on reducing corruption and improving efficiency. There's a new, controversial head of the national police force, who has re-assigned total departments. And there's a plan to investigate all police officers, with lie detector tests and financial audits, to identify problem officers. (Though that will take a long time, and so far 24 of the first 169 officers called for the tests just haven't showed up.)
It is safe in Copan. But when roadside armed response becomes a viable business, things are spinning out of control.

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