Charter City Dreams

Can a once fringe idea revolutionise life for billions in the 21st-century?

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I’ve written often, in this newsletter, about what is next for cities.

Recent debate on that subject has tended to focus on the industrialised world. Take a global view, and the picture is more straightforward: cities are the future.

The UN estimates that an additional 2.5 billion people, making 66% of the world’s population, will live in urban areas by 2030. Most of that increase will take place in the developing world; all ten of the cities projected to become megacities by 2030 – think Lahore, Bangkok, and Bogotá among others – are in the Global South.

One dimension of this future? In the wake of the pandemic, a once fringe idea is having a long moment.

Proponents say charter cities are the vehicles via which we can harness the great wave of urbanisation that lies ahead. Get it right, they claim, and we can enact a huge step forward for humanity in the coming decades.

So this week, in NWSH #62, a closer look at the charter cities movement, its history, and what is coming next.


The idea that cities can be uniquely powerful engines of human advancement is nothing new. But now, a number of eye-catching projects and a post-pandemic thirst for fresh ideas have fuelled a new moment for the movement around charter cities.

🏙️ City of Dreams
At its simplest, a charter city is a city instituted around its own, bespoke framework of governance and law, as laid out in its founding document or charter. What’s so great about that? Proponents, including the Charter Cities Institute, point to the success of 20th-century city-states such as Hong Kong, Dubai, and Shenzhen. Each in its own way, they argue, was liberated from old law and customs and established as a quasi-independent entity; each used that freedom to take vast steps forward – and achieve prosperity – in just two or three generations. Back in 1980, when it was instituted as a Special Economic Zone, Shenzhen was a border town of 30,000 with a GDP of around $100 per capita. Now it’s a megacity of 12 million, and per capita GDP is over $30,000. That’s a story of white-hot human advancement. The Charter Cities Institute says we can we replicate that story hundreds of times over, all across the developing world.

🏃 An Idea Meets its Moment
The US economist Paul Romer first outlined that vision in a now-canonical TED talk back in 2009. Let’s throw out old rules, said Romer, and optimise a new wave of cities in the Global South for investment, skills, and economic development. Romer spent the subsequent decade searching for a nation willing to give his idea a try. Those efforts were troubled; a project in Madagascar crumbled after citizens rioted when it emerged that the land earmarked for development was to be owned by Daewoo, a South Korea auto corporation. So why are charter cities having a new moment in 2021? After a faltering start, Romer’s other project – a charter city in Honduras called Próspera – was launched last year. Meanwhile, new ideas and charismatic new proponents have revitalised the space: more on all this below. Finally, all this comes as the pandemic has vaporised what was left of the neoliberal consensus, and sent many on a quest for the Big Ideas that can help us rebuild in the 2020s.

⚖️ In the Balance
No surprise: charter cities – at least, the variant outlined by Romer – are controversial. Critics point out that the roots of Romer’s vision lie in 20th-century projects in colonialism, such as Hong Kong. These proposed charter cities, they say, are really hyper-capitalist, neo-colonial outposts that would subject the world’s poorest people to rule by ‘enlightened’ foreign governments and global corporations. The failed project in Madagascar – a Daewoo city! – did nothing to assuage those concerns. So the big question for charter cities in 2021: are they more than just a neo-colonial fantasy? Can they really supercharge economic growth, and do it fairly and sustainably, in the developing world? Or is this, in the end, about old-fashioned, 20th-century-style capitalism: exploitative, environmentally damaging, and rigged so that the Global North always wins?


Paul Romer’s vision is about to undergo its first real test. But via charismatic founders and new technological possibilities, the charter cities movement is evolving fast. When it comes to its longterm fate, the next few years could prove decisive.

🇭🇳 A Test Case: Próspera
At the more conventional end of the coming wave of charter cities is Próspera, the experiment initiated by Paul Romer and the Honduran government in 2013. Located off-shore on the small tropical island of Roatán, the city will operate under its own constitution, and a legal framework – including low tax rates – designed to attract entrepreneurs. The first cohort of Prósperans will be ecitizens: remote workers who pay a fee to take take advantage of the legal and tax benefits; Próspera opened to applications from ecitizens in May 2020. But there are plans, once infrastructure is built, for a bustling physical city. Those behind it say it can become ‘the Hong Kong of the Caribbean’. But Roatán’s small indigenous fishing population say they weren’t consulted about the project, and fear being pushed off their island. It’s the first real-world test of Romer’s vision for economically liberalised, trade-centric cities as engines of growth in the developing world: the fate of Próspera will help shape the future of charter cities more broadly.

💥 Cities as Startups
So what lies beyond Romer’s vision? Two powerful answers are emerging. Themed charter cities, and charismatic founders who can attract investment, attention, and talent via their global audience. Often, two go together. The Senegalese-American rapper Akon says he is ready to start construction on a $6 billion ‘real life Wakanda’ on land donated by the Senegalese government. The city will run on a cryptocurrency, called Akoin, launched by Akon in 2018; a powerful play given 350 million people in sub-Saharan African are unbanked. Akon hopes this his decentralised ‘sustainable smart city’ – there are plans for resorts, a stadium, and a business district – can act as a model for development across the continent. Meanwhile, the charter cities movement is coming to the Global North, too. In March Elon Musk announced new plans for the small town in Texas, Boca Chica, that currently hosts a minor SpaceX facility:

Musk says he wants to grow Starbase into a proper city. Local authorities were quick to make clear that there is, as yet, no formal agreement on these plans.

☁️ Cities in the Cloud
The next evolution of the charter cities trend? It’s intersecting with a new wave of thinking on how the internet, and the decentralisation made possible by blockchains, explodes old structures of power. The influential Silicon Valley VC Balaji Srinivasan says we’re moving out of a world in which the nation state – a state organised around shared location – is the primary unit of power, and towards one in which the networked state – organised around a shared belief – takes its place. A new wave of cities, he says, will begin life as ‘networked cities on the cloud’, in which likeminded people come together to transact on a blockchain.

One early attempt to realise this vision? Launched in 2020, Plumia bills itself ‘the first country on the internet’. It’s aimed principally at the rising number of digital nomad knowledge workers – estimated to rise to 1 billion by 2035 – and wants to provide them with ‘infrastructure for living anywhere’, starting with global health insurance. The cloud cities dream, though, extends much further: towards blockchain-fuelled cities built around a shared set of values, skills, or even a shared religion. As the power of the nation state wanes in a connected world, is the next great primary unit of power – the cloud city united around loyalty to a shared value – about to emerge?


The New World Metropolis

Thanks for reading this week.

I refer to New World Same Humans as a community. Perhaps what we’re really building here is the beginnings of a new city in the cloud.

The New World metropolis would lay its foundations on a single idea: that we must come together in the 21st-century to build a future that serves, not subjugates, humans.

While I draw up the plans, there’s one thing you can do to help: share!

Now that you’ve made it to the end of this week’s instalment, please consider forwarding the email to someone who’d also enjoy it. Or share it across one of your social networks, with a note on why you found it valuable. Remember: the larger and more diverse the NWSH community becomes, the better for all of us!

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I’ll be back on Wednesday with another New Week Same Humans. Until then, be well,

David.


David Mattin is the founder of the Strategy and Futures Research Unit. He sits on the World Economic Forum’s Global Future Council on Consumption.