“I felt very hopeful for my region that we could get this off the ground, because the reality is that reforming these countries in Central America and other places is just so hard and the incentives are so misaligned, so completely misaligned. My perspective after trying to reform in country is that you have to find a way to reform outside of the system.”

Gabriel Delgado

A couple of weeks ago, whilst I was attending the New Cities and Network States weekend at Zuzalu in Montenegro, I got to sit down with one of the founders of Próspera, Gabriel Delgado. During our conversation he ran over the latest news from the project including buildings and infrastructure progress as well as future plans and an update on their ongoing complications with the Honduran government.

With regards to our Montenegro trip, for those of you that don’t know, Zuzalu is an experimental two month pop-up city and gathering in the country. It began on March 25th with 100-150 residents arriving, who have since been spending their weekdays coworking and weekends attending talks and mini-conferences on themes including synthetic biology, technology for privacy, public goods, longevity, and governance. The group will remain on the site until the end of May.

Myself, Titus Gebel and Peter Young were at Zuzalu flying the flag for the Free Cities Foundation and I have to say that it was quite an enlightening experience for me, in particular for understanding the different facets of this movement and how our particular ideas fit into the ecosystem as a whole.

Anyway, here’s the update from Gabriel. Don’t forget to subscribe and review us if you so choose and you can send feedback via our social media channels.

Enjoy the conversation.

Automatically Generated Summary

00:00 Introduction

Timothy Allen introduces the Free Cities Podcast and announces that this episode will feature an update on the Próspera project.

Próspera Update

  • 00:45 Gabriel Delgado, one of the founders of Próspera, provides an update on the project’s progress in terms of buildings and infrastructure.
  • 01:08 Zuzalu is an experimental two-month pop-up city where residents co-work during weekdays and attend talks and mini-conferences on weekends. The group will remain on-site until the end of May.
  • 02:00 Timothy Allen shares his experience at Zuzalu and how it helped him understand different facets of the movement.
  • 02:22 Gabriel Delgado addresses negative media coverage about Próspera, stating that much of it is ideological rather than based on reality.
  • 03:06 Negative media coverage includes claims about biohacking, crypto libertarianism, and colonialism. Gabriel Delgado refutes these claims as not being representative of what he has experienced in real life.
  • 04:10 Gabriel Delgado welcomes legitimate criticism but expresses disappointment when criticized for things that are not based in reality.

Conclusion

The introduction sets up the episode as a brief update on the Próspera project. Gabriel Delgado provides insight into recent developments while addressing negative media coverage.

05:50 Introduction

Gabriel Delgado, co-founder of Próspera, talks about the progress of the special economic zone in Honduras and his experience with similar projects.

  • Próspera has around 1000 residents and 300 companies.
  • The people working on the buildings are enthusiastic about the project.
  • Reforming countries in Central America is difficult due to misaligned incentives.
  • Gabriel Delgado has been involved in these types of zones since 2009 and launched Próspera in 2017.

09:03 Previous Attempts at Special Economic Zones

Gabriel Delgado discusses previous attempts at creating special economic zones in Honduras.

  • In 2009, Gabriel Delgado formed a group to lobby for special autonomous regions inside Honduras.
  • The incoming government was enthusiastic about the idea but could not move forward with it.
  • Gabriel Delgado then decided to focus on getting Próspera off the ground before expanding to other countries in the region.

11:00 Creating Próspera

In this section, the speaker talks about how he got involved in creating Próspera and the failures that led up to it.

Disappointments in Guatemala and Honduras

  • The speaker had two huge disappointments in Guatemala and Honduras.
  • In Honduras, they had land scoped out, a master plan, money for options, an MOU signed, and concepts of the governor’s platform designed.
  • After that failure, the speaker almost didn’t want to have anything else to do with it.

Starting a New Initiative

  • The speaker got pulled back into creating Próspera because he thinks it’s a powerful way to reform.
  • Our region is well-positioned to do well in the world if we can get around some of the unproductive incentive structures that exist.
  • The speaker joined forces with Erick Brimen and they decided to work together on creating Próspera in Honduras.

Hypothesis for Creating Prospera

  • The hypothesis is that you can’t reform from within the system where it’s very difficult or it’s sort of a long defeat.
  • By becoming successful and prosperous zero-to-one, we showcase that we can drive prosperity and people rather than choosing to leave their country to find opportunity elsewhere just migrate within their own country.
  • We changed that paradigm so other countries look at this and say they want to replicate this within their own country.

14:31 Latest News on Próspera

In this section, the speaker talks about what’s new with Próspera since November 2020.

Beta Building

  • When last visited in November 2020, beta building was finished full of businesses with no room for anything else.

Residential Tower

  • The residential tower will be delivered in August 2021.
  • It will have 82 residences aimed squarely at young professionals and young families.
  • It’s a mixed-use building with office space, retail space, and living space.
  • The building is well thought out and beautiful.

16:00 Overview of the Building and Furnishings

The building has a motor lobby on the first floor, with retail space on the fourth floor. The residential area starts on level 5 and goes up to level 14. There is an infinity pool on the 12th level, and a common area terrace on the 14th level. The circular factory is a specialized workshop that uses robots to cut wood into pieces for buildings.

Building Furnishings

  • Delivered with fixtures and basic furnishings.
  • White line refers to fridge and other appliances.
  • Stove top included in package.
  • Package includes furniture options.

Retail Space

  • Located on the fourth floor.
  • Includes restaurants or office space.

Residential Area

  • Starts from level 5 to level 14.
  • Infinity pool located on the 12th level.
  • Common area terrace located on the 14th level.

Circular Factory

  • Specialized workshop that uses robots to cut wood into pieces for buildings.
  • Raw materials are mainly wood from certified forests in Honduras.
  • Wood is cross-laminated timber that is structurally sound.
  • Seeks to improve delivery time for buildings both large and small.

17:57 Circular Factory’s Purpose

The circular factory seeks to improve delivery time for buildings by using its regulatory platform. It will initially deliver inside Próspera as a test case before expanding outside of it.

Purpose of Circular Factory

  • Uses regulatory platform created by Próspera to accelerate rate of delivery into market.
  • Seeks partners, tenants, co-builders, etc., who can use its platform to build stuff efficiently.

Delivery Time Improvement

  • Aims at improving delivery time for buildings both large and small
  • First building deliveries will be for Próspera
  • Will deliver pieces for Duna and Beyabu

Expansion

  • Circular Factory is an independent company from Próspera.
  • Seeks to expand outside of Próspera.

21:12 Building a Circular Factory

In this section, the speaker discusses how the circular factory works.

How the Factory Works

  • The design is done online separately.
  • The pieces are built inside the circular factory.
  • Robots assemble the pieces together in place using cranes and people.

Delivery of the Building

  • The circular factory building will be delivered in the next month or so.
  • Robots need to be installed, calibrated, and tested before production can begin.
  • The first BeyaBu buildings should begin production sometime in Q4.

23:01 Duna Project and Drone Deliveries

In this section, the speaker talks about Duna project and drone deliveries to the roof of Duna.

Duna Project

  • The current plan is to do drone deliveries to the roof of Duna from different parts of the island.
  • A company called Aerialoop already exists inside Próspera that delivers medicines and other things via drones in Ecuador.
  • They are partnering with Próspera to showcase their model through regulatory environments.

Drone Deliveries

  • Drone deliveries help cut down on delivery times for urgent things like medical devices or even pizzas.
  • Politicians are careful when it comes to regulatory permitting because they don’t want to take any risks.

24:53 Aerialoop’s Model

In this section, the speaker talks more about Aerialoop’s model for delivering goods via drones.

Aerialoop’s Model

  • Aerialoop delivers medicines and all kinds of things in Ecuador.
  • They are opening up in one of Colombia’s cities as well.
  • Próspera helped them showcase their model through regulatory environments.

25:49 Drone Pizza Delivery and Pristine Heights

In this section, the speaker talks about drone pizza delivery and a new project called Pristine Heights.

Drone Pizza Delivery

  • 25:49 The resort is planning to use drones for pizza delivery.
  • 26:04 The speaker mentions that the site was still primitive when he visited in November.
  • 26:26 They have gardens where they grow plants for consumption in the hotel’s restaurants.
  • 27:09 Progress is happening quickly, but it may not be noticeable to those who live there.

Pristine Heights

  • 28:07 The speaker introduces a new project called Pristine Heights, which will consist of high-end apartments designed by a leading Caribbean architect.
  • 28:25 Groundbreaking is planned for September.
  • 28:42 This project will be located on the other side of Pristine Bay Resort and will cater to wealthier individuals.
  • 29:21 The original land was all greenfield, so infrastructure had to be overlaid before big projects could begin.

30:13 Bitcoin Center and Government Relations

In this section, the speaker talks about the Bitcoin Center and government relations.

Bitcoin Center

  • 30:13 The former Montessori school has been converted into a Bitcoin Center.

Government Relations

  • No bullet points with timestamps available.

30:52 Bitcoin Center in Honduras

In this section, the speaker talks about how they acquired the Bitcoin Center in Honduras and its beautiful views.

Acquiring the Bitcoin Center

  • The event was attended by people all over the world.
  • They eventually acquired it and that’s where the Bitcoin Center is now.
  • The place has lovely views.

31:11 Relationship with the Government

In this section, the speaker discusses their complicated relationship with the current government of Honduras.

Complicated Relationship

  • The ZEDEs project was highly politicized by both previous and current governments.
  • The rhetoric around ZEDEs is very high.
  • They have been unable to convince them to take a hard look at what they’re doing.
  • The claims against them are just plain false.

31:36 Inability to Convince Government

In this section, the speaker talks about their inability to convince the government to come and take a hard look at what they’re doing.

Claims Against Them Are False

  • All claims of loss of sovereignty and corruption are false.
  • Best way to figure out if that’s true is to come and visit and actually look at facts on ground.
  • They’ve not been able to convince them yet.

33:05 Central America Free Trade Agreement

In this section, the speaker discusses how their company is founded in Delaware Corporation under Treaty of the Central American Free Trade Agreement which gives them rights as investors.

Rights as Investors

  • Their company is founded in Delaware Corporation under the Treaty of the Central American Free Trade Agreement.
  • This gives them rights as investors.
  • Presented a case through arbitration last year which was a serious case.

34:07 Crux of Government’s Argument

In this section, the speaker talks about the crux of the government’s argument against them.

Government’s Argument

  • The previous government was illegitimate so everything they did was illegitimate.
  • It’s a strange argument because if you say that the ZEDEs were legitimate then it follows that all acts in 12 years are illegitimate.
  • They view it as sort of a personal attack.

35:39 Case Against Government

In this section, the speaker discusses their case against the government and why they believe they have a good moral and legal case.

Good Moral and Legal Case

  • They have a good moral case because morally they’re in the right.
  • Legally, they have a very good case.
  • They hope that their case is a motivator for conversations to resolve this issue.

36:25 Legal Issues and the Central American Free Trade Agreement

In this section, the speaker discusses legal issues related to the Central American Free Trade Agreement (CAFTA) and how it affects their case against Honduras.

CAFTA and Legal Win

  • 36:25 Without incurring violence, Honduras does not have the ability to legally win the case.
  • 36:47 The US is already involved in the treaty with Honduras.
  • 37:06 Honduras has five lawsuits filed against it in arbitration.
  • 37:27 If given an award against Honduras, they would have to pay a lot of money.

Best Case Scenario

  • 39:37 The best-case scenario is for the government to meet with them and figure out what they want.
  • 39:59 They could map out what they could do to make sure that they can continue operating with their acquired rights.

Time Scale

  • 40:23 There is no time scale on when this will happen.
  • 40:41 The rhetoric on their side continues to be very anti-project.

41:42 Sovereignty Agreement and Political Scenarios

In this section, the speaker discusses the sovereignty agreement and its political implications. They also explore different scenarios that could unfold in the future.

Possible Scenarios

  • 42:01 The speaker outlines three possible scenarios for how things could unfold with the government. One scenario is reaching an agreement, which they put at a 10% chance of happening.
  • 42:29 Another scenario is waiting for a new government to come in and negotiate with them as current governments tend to lose power as their terms advance.
  • 42:49 A third scenario involves violence, which the speaker hopes will not happen.

Prosperous as a Distraction Device

  • 41:42 The sovereignty agreement is deemed irrelevant by the speaker, who believes it’s being used as a distraction device by politicians.
  • 44:14 Próspera is referred to as one of their big “pinatas” that politicians hit whenever something bad happens in the country.

43:09 Future Government Negotiations

In this section, the speaker talks about future negotiations with a new government and how they hope to continue pushing forward despite any challenges.

Negotiating with a New Government

  • 43:09 If there’s no agreement reached with the current government, they would wait for a new government to come in and negotiate with them.
  • 45:21 Whomever gets elected from that same party would have strong incentives to sit down and figure things out since an award may be getting ready to be served by then.

Changing Public Perception

  • 45:06 The negative narrative against them has been destroyed by the facts, such as no corrupt politicians or criminals of any type.
  • 45:54 Investment keeps coming in despite all the attacks, and there are thousands of jobs available.

45:06 Dealing with Political Threats

In this section, the speaker talks about how they deal with political threats and their plans to continue pushing forward.

Political Threats

  • 45:37 The threat of dodgy governments has been around for many years, but it’s not going to stop them from doing what they’re doing.
  • 45:54 Shutting down their operations would be a very extreme measure that could make them victims and wouldn’t work out politically for the government.

Trade Agreement Implications

  • 45:54 If the government shuts down their operations, the trade agreement would kick in majorly.

46:32 Próspera: A Zone of Intellectual Excitement

In this section, the speaker talks about the events that have taken place in Próspera and how they are attracting entrepreneurs to the island. He also mentions the traction that biomedical space is gaining in the zone.

Events in Prospera

  • 46:32 The island has been hosting great events that bring entrepreneurs to the island.
  • 46:56 Recently, a health summit was held on the island, and a DEFI Summit is coming up soon.
  • 47:16 A hackathon is happening on May 10th.

Biomedical Space

  • 47:38 The biomedical space is gaining traction in Próspera.
  • 48:01 There are well-established therapies such as longevity treatment and regenerative medicine therapies looking at the zone.
  • 48:19 Fly by Night operations do not come into play because of strict enforcement of laws.

48:38 Businesses in Prospera

In this section, the speaker talks about businesses currently operating in Próspera.

Types of Businesses

  • 48:38 There is a bank and several crypto companies exploring the space.
  • 49:03 Medical clinics, traditional construction companies, call centers, entertainment centers are present.
  • 49:20 Guidepost Montessori runs a network of Montessori schools around the world with one school already established on the island.

49:55 Building Blocks for Living and Working in Prospera

In this section, the speaker talks about building blocks necessary for people who come with families or thinking of families to live there and work there.

Building Blocks

  • 49:55 A fully online university is present.
  • 50:15 The Builders Network has been launched, which offers bounties for things that need to happen within the zone.
  • 50:34 More builders are needed to build alongside them.

51:33 Building a Mortgage Company

In this section, the speaker discusses the needs for building a mortgage company and how it aligns with their vision of having partners come and build alongside them.

Needs for Building a Mortgage Company

  • The company has identified certain needs that can be fulfilled by people who come and build them.
  • These needs can be small or large tasks.
  • The idea is taken from other sites that do this as well.
  • This project aligns with the company’s vision of having partners come and build alongside them.

52:16 Conclusion

In this section, the speaker concludes the conversation by expressing his excitement about the project and wishing good luck to the team.

Final Thoughts

  • The speaker expresses his excitement about the project and calls it “the sharp end of the wedge”.
  • He wishes good luck to the team.
  • He hopes to see them in less than a year.