How Do You Build a New Singapore? Inside Próspera’s Bet on Private Governance (Erick Brimen, Founder & CEO)

Speaker A: One of the things that when you read about Prospera is that this is a haven for Silicon Valley billionaires. How do we create a sincerely productive and progressive charter city? What do we need to get right from the beginning for this to work? Speaker B: The most important and impactful dynamic that we're seeing today is dynamism and customer-centric mentality. Some of the things that we're actually doing on the ground today, it wasn't mass planned 5 years ago. If there wasn't a profit motive and there wasn't a dynamic way to operate this where the private sector is the one actually operating on the ground, we wouldn't be what we are today.

Speaker A: Where do you sort of hope to be in 10 years' time? What's the optimistic but realistic view of things when you look at it from your seat today? Speaker B: Within 10 years, our projects here could have about 100,000 people involved on the ground between employees and residents. Beyond that, we want to see some of the largest companies as well as some of the most innovative players realizing that governance is an industry that can be innovated upon and that it is being done. And as imperfect as they may be, we're showing that it can happen.

Speaker C: How do you create the next Singapore from scratch? Speaker A: Erik Brimann is doing just that. His company Prospera has built a charter city in Roatán, Honduras. It's a private jurisdiction with its own legal system, regulatory framework, and governance structure. Speaker C: Brimann's vision extends far beyond Honduras, though. He wants to create the infrastructure that enables hundreds of prosperous charter cities around the world, freeing millions from the constraints of bad governance in the process. Speaker C: Brimann's vision extends far beyond Honduras, though. He wants to create the infrastructure that enables hundreds of prosperous charter cities around the world, freeing millions from the constraints of bad governance in the process.

Speaker A: Today, Erik and I discuss how his childhood in Venezuela shaped his obsession with institutional design, why special economic zones might be the key to human flourishing, and what it really takes to build a city and a new model of governance from the ground up. I'm Mario, and this is The Generalist. Speaker C: I'm really excited to have today's episode brought to you by GoFundMe Giving Funds. I want to tell you about a new product GoFundMe has launched called Giving Funds, a smarter, easier way to give, especially during tax season, which is basically already here.

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That's where Guru comes in. It's the AI source of truth that connects everything your company knows. So every insight, every answer, every recommendation is grounded in verified knowledge, not outdated information or hallucinations. When your teams and your AIs share one trusted foundation, everything moves faster with fewer redos, fewer blind spots, and more confidence in every decision. Because in the age of AI, truth isn't just power, it's protection. See what Guru is doing for thousands of companies like Spotify, DHL, and Stripe at com. That's com. Speaker A: Eric, uh, I'm, I'm so excited to, to chat with you today, and I think we're gonna get into some really unusual, uh, subject matter.

Folks that, you know, aren't familiar with what you do, I think will, will be excited to hear, uh, how you have spent your life building something quite remarkable. But maybe to set the stage, you can tell us a little bit about Prospera, uh, and, uh, you know, give us a, a sort of frame of reference for what you are doing and why it matters. Speaker B: Thanks for having me. Prospera is a platform for governance as a service so that we can catalyze public-private cities that create conditions for people anywhere in the world to reach their full potential.

You know, the world we live in today is one in which governance and governments are conflated. We think of governments as the only way through which we can have the critical services of governance in a modern society. And that's just simply not the case. That's just the way things have evolved. But if you would allow a distinction between governments as institutions and governance as a service that they provide, there's space for partnerships to emerge where the private sector can insert itself and working with governments actually provide better governance. At what scale?

Well, human civilization has thrived throughout the millennials at city scale, and that's why Prospera works with governments to create public-private partnerships to build city-scale projects that run on the Prospera governance platform. Speaker A: I think a term folks might be more familiar with would be something like a charter city. What are the ways that, you know, Prospera sort of fits that definition and, and you know, maybe there are places where you feel it's, it's not quite the right nomenclature. Speaker B: A charter city would be a particular city and they're characterized by having separate rules and laws and regulations that are generally enshrined through a charter.

So a charter city could be the, you know, the end product, if you will. Prospera is a platform to catalyze multiple charter cities. And for charter cities to have a governance system that they can run on. So there can be charter cities that don't run on Prospera, for example, and Prospera can power cities that we're not directly building. We're like the SAP for city management, if you will. Yes. Speaker A: I think a term folks might be more familiar with would be something like a charter city. What are the ways that, you know, Prospera sort of fits that definition and, and you know, maybe there are places where you feel it's, it's not quite the right nomenclature.

Speaker B: A charter city would be a particular city and they're characterized by having separate rules and laws and regulations that are generally enshrined through a charter. So a charter city could be the, you know, the end product, if you will. Prospera is a platform to catalyze multiple charter cities. And for charter cities to have a governance system that they can run on. So there can be charter cities that don't run on Prospera, for example, and Prospera can power cities that we're not directly building. We're like the SAP for city management, if you will.

Yes. Speaker A: And this is more than theoretical. You have created one of these charter cities in Honduras. In a place called Roatan. You know, when we talk about the city versus the platform, how do you think about, you know, differentiating or distinguishing between those two? Speaker B: Sure. Well, there's the city of Prospera and the first one, you know, adequately called Prospera. Future ones may not. And then there's the platform, which is the software that software and services put together to provide governance, which extends beyond a a single city and can be provided for additional cities that join the platform.

So over time, what you would expect emerges is something like a modern version of a Hanseatic League, where you have multiple cities throughout the world. They each have their own, you know, location, some things that are particular to them. But if they're part of the Prosper platform, then they're all sharing a modern version of common law with very efficient dispute resolution, very innovation and entrepreneur-friendly regulatory frameworks, and then you know what to expect if you're in a prosperous city. Speaker A: Amazing. Well, I think, you know, we've, we've sort of laid the table there for folks to understand the, the, the scope of this conversation.

And, you know, we'll talk more about the platform and, and the city itself, but I don't think there are many people in the world who wake up one day and say, I, my ambition is to make a modern version of the Hanseatic League. So perhaps we can go backwards a little bit. Tell us about your upbringing and, and you know, how that maybe informed the ambition you have with Prospera. Speaker B: I was born and raised in the country of Venezuela until I was sent off to military academy in the US and subsequently college in Boston.

I went to Babson College and studied entrepreneurship and economic development, then went on to do investment banking, management consulting, and then entrepreneurial endeavors. But I think what was transformative in my upbringing was having been born and raised in Venezuela, a country that unfortunately had and now is worse, too much poverty. Speaker A: Right. Speaker B: And it's tragic. Wherever you see poverty, it's tragic. But in a place that is so rich with natural resources, you would think that poverty should be a thing of the past. And that's not the case.

And growing up in that environment, I couldn't help it but to ask myself why that was the case, you know, and if there was something that could be done about it. And I started down the path, a more traditional altruistic path of wanting to do charity work. And that evolved into more of a government-centric path of saying, well, maybe I ought to run for president and make a difference in my country. And, but then I studied entrepreneurship and The Wealth of Nations and, and really understanding what makes prosperity possible. And I realized through a mixture of disciplines, including economic development, that the prior two, the prior three, like nothing really matters.

Doesn't matter how much charity you do. Doesn't matter how good a president is if the institutions are not sound. And there's no good governance, nothing else matters. Everything, you know, education, healthcare, all of it goes to waste and it doesn't take root. So having understood that what made the difference was good governance, the next layer up was how do you deliver good governance? And once you study and understand the modern systems of governments, whether it's democracy or variations thereof, you quickly realize that once a government takes hold, it's extremely hard to make profound changes that applies across the board because, well, you know, the, the good thing about democracy is that everybody in theory has a say.

And that means that everybody has a stake in the system as is. And if you want to change it, you have to convince everybody, which means that you end up with a very low degree of differentiation. Because it has to be sufficiently acceptable to many different stakeholders. So transformative change is really hard, if not impossible, with democracy, save revolution or a significant breakdown in the system. But alas, studying entrepreneurship, you at some point realize that disruption is not such a bad thing, and that when you have very savvy institutions, that you can internalize disruption in such a way that it doesn't upend the mothership.

And this in the business world is called intrapreneurship, right? So we came up ultimately with a balance between being able to do transformative change within existing institutional frameworks of governments by adopting what many people call, say, charter cities. And that's fine, but it was theoretical until it was implemented. And I think we're the first one in the world in modern era to actually implement oriented by developing an enhanced form of special economic zones, which are created often throughout the world. But if they get embedded with the enhancement that we can advise governments to include, then they can go way beyond our traditional special economic zone and actually grow up to be a charter city of the type of Dubai or Hong Kong or Singapore.

Speaker A: When I look at your, your background, you know, on paper, you might not see the level of openness and creativity and ambition that I think your project has demonstrated. You know, you see someone who maybe went through the finance route, went to banking, but clearly there was this sort of intellectual journey you were going on where you were thinking about these different structures. As you look back on it, were there, you know, maybe one or two or three turning points where you were introduced to seasteading? You know, I could have imagined being a popular thought experiment at the time that you were sort of going through this journey, or was, you know, a first entrepreneurial endeavor that really made you realize, like, I'm actually not built to be someone who is, you know, at Brown Brothers for the course of my career.

How did you— yeah, what was that transition like? Speaker B: There have been experiments throughout history, so what we're doing is not entirely new, right? I mean, there's been experiments throughout history that have attempted and always do try to push the boundary of how to better organize society. And in modern era, uh, seasteading has been a pioneering attempt to achieve that. And I spent quite a bit of time with the Seasteading Institute, uh, people, and, uh, and I agree fully with a lot of the objectives. You know, they're trying to create space for governance to be innovated upon.

And, uh, the idea there is if you go out to the open seas, you don't have a national government to contend with. So you have a, clean slate, so to speak. I looked at it and, you know, I think at some point that might very well be possible, you know, Waterworld style. But ultimately, if you bring it down to the essence, that is a, that's a technical solution to a political problem. You're trying to figure out how to technically create livable platforms on open seas. That's a big technical challenge so that you don't have to deal with governments which is a political challenge.

And that seemed broken to me. You know, the technical viability of it was just not there. And in any case, even if you solved it, I imagined the political problem is not just going to go away. You know, there's always a government that wants to claim jurisdiction. And sure enough, that's what's been proven so far. So that clicked, you know, you have to— the problem is political. You have to find a political problem— a solution, sorry, to the problem. And that's where, from a strategic perspective, this idea of creating special economic zones in partnership with governments, where the balance of incentives were sufficiently aligned for the project to emerge and then endure, seemed like the best approach.

And look, it's not guaranteed to work, and we're certainly in the midst of it ourselves with ups and downs, and we're seeing the boundaries and limitations of this approach. So there's no silver bullet, but I think to solve a political problem, you have to have a political solution. And that's what we're engaged upon. I would say that was one big turning point in the realm of what you mentioned. Obviously, in my life, personally speaking, being in Venezuela, I had many episodes in which I was touched profoundly, and then it was no longer just a theoretical thing.

Of poverty, but it just became a bit of a life mission for me. And then at Babson studying entrepreneurship, I had a professor, a great professor, Larry Moss was his name. And he was an anarcho-capitalist. And I was, I had him as anarcho-capitalist on the one hand, and I had another professor who was pro-Chávez. You know, like he was telling me as a Venezuelan that Chávez and the socialist revolution was what was needed in order to solve the problem. So I had these like extreme opposite intellectual mentors and I was developing a thesis around that.

So that was definitely a moment where I was sharpening my own intellectual thinking of how to solve the problem. Speaker A: Yeah, you know, you mentioned some of these formative moments in Venezuela. I think clearly that's such an important part of your inner landscape and the work you're doing. Yeah, if you had to sort of maybe pick one or two of those moments that maybe revealed something about this project in hindsight, what might come to mind there? Speaker B: There's two moments, one in particular that didn't give me insights into the solution, but grounded me in commitment to do something about the problem.

Okay. And that was, you know, I must have been somewhere between 9 to 11 years old. In Venezuela going to school. I grew up fairly privileged thanks to my parents. And, you know, every morning I would have breakfast and typical, right? Every other day or so I wouldn't get up on time or I would be running late or I would just be monkeying around playing soccer before eating. This must have been one of those days because I didn't finish breakfast on time and, you know, I had to get going and I had to jump in the car and I still had my food.

My mom, you know, packed it for me and I had to eat it before making it to to school and that was fine. I had an empanada, that's what they're called. We stopped at a light, you know, at a stoplight, probably halfway between home and school. And as I was there just minding my own business in a nice car, being driven by a chauffeur inside of air conditioning, right outside, I all of a sudden hear a knock, you know, like, and I look to my left and it's a kid. He must have been about my age, but you know, his His skin was a bit darker, obviously he was in rags and he was doing some sort of weird hand motion.

I don't know how long it took me to, to get it, probably 2 or 3 seconds, but it felt like a long time. And then I got it. He was like signaling that he just, he was hoping for food, right? He was, I think he was asking me for my food. Yeah. As soon as I got it, I just kind of rolled, you know, tried to roll down the window. The light must've turned. Because the car drove, you know, just before I was able to hand him the empanada, what I had left, it just, I drove off and, and, you know, that kid, that kid just stayed behind there and, you know, it always made me wonder and it certainly, it touched me as a kid.

It made me feel sad, you know, it's just like you realize that there are things that I took for granted that were definitely not available for all. But even as I think of that moment, I get a bit emotional because it, you know, I went off to school and I've had tremendous blessings in my life, but that kid, I don't know what happened to that kid. And I'll never know most likely, but there were too many kids like that kid around the world, even in the US, right? That lack of opportunity.

And when you bring it down, when you take everything else out, politics and what have you, There's no reason why we should have a world with that. I mean, there's abundance. The problem is that we have artificial barriers and most of them today, I mean, they're technical barriers and all that, but the one that presents the biggest opportunity for positive transformation is if we can solve this issue of governance, right? Governance that is as reactive and as dynamic as a free market economy is when trying to solve problems voluntarily. We don't have that in governance.

And if we want to make the world a better place, hell, perhaps if we want to survive as a species the next 50 years, we better solve this problem. Speaker A: Well, I can understand why that moment stayed with you, and I thank you for sharing it. You mentioned that this is, you know, on the one hand, you're maybe the only sort of, or one of the few people doing this in the modern era, but there have been these historical analogs and, you know, the three that I think are probably discussed most are Dubai, Singapore, and Hong Kong.

Correct me if there's, you know, another one we should be adding to that mix. But when you started to familiarize yourself with the stories of those economic zones, those cities, what were the pieces that you thought, you know, this is something that I need to try and hang onto and this is something that, you know, actually doesn't make sense for, you know, the current era. How, how did you sort of start to take lessons from, from history there? Speaker B: Yeah, tho— those three are emblematic and, and they have sufficient similarities and differences to create a great conversation exactly along the lines of what you're describing.

So I'll focus on those. Some differences to begin with, they were all created differently. Okay. So they're not very insightful for how to solve the process of creating charter cities. Because though they ended up being in effect charter cities, they were not created in a manner that is consistent across all three, nor in a manner that seems scalable and replicable. And that is precisely one of the things that Prosper has sought to solve for. And I'll talk about that. You know, in the case of Singapore, obviously became a sovereign country through a process of independence from Malaysia, relatively peaceful.

There was no, no need to fight it. And that was a very unique moment in time. And then Hong Kong obviously was a result of the colonial era with the British Empire and Opium Wars, and ultimately this settlement agreement of sorts where Hong Kong would remain under the management of a colonial power. Then to be handed over back to mainland China. You know, that was again, very specific to its time. But yeah, I think we're way past colonization and the idea that countries can, you know, govern other countries and things of that nature.

So that's probably not very replicable. And then Dubai— Dubai is very unique because it is a very well-executed form of federalism of sorts. Well, the type that we would want to have in the US. Or you have a nation state and then you have political subdivisions, you know, the equivalent of states of the US that are able to exercise a high degree of autonomy and do so. And in the case of the Dubai Emirates, they created not one city, I mean, it's in aggregate one city, but in reality it's well over 32 special economic zones within a general area.

And each of those has a fairly high degree of autonomy and they compete against each other. And competition is the best force at enabling progressive excellence. So I would say of all those 3 models, there's something to keep and learn from. In all 3, they run, especially in Dubai, when I talk about Dubai, I'm going to focus on the DIFC, the Dubai International Financial Center, because it's the closest to what we're doing and the most innovative. But in all three examples, they run on common law, right? Not on civil law.

And this is key because common law has evolved over thousands of years and it's the most natural form of law because it has evolved through judges and private parties, not just legislators. In all three cases, they effectively imported initially a trusted and experienced judiciary In all three, they set up special courts with internationally recognized judges so that when you set up shop, not only do you have better rules through common law, but you knew instantly that if there was a dispute, you had a trusted dispute resolution mechanism to rely upon.

And so that's been standard across all of them. And in all three cases, they succeeded massively without reliance on natural resources. It's not like People think Dubai had a bunch of oil. They didn't. Speaker A: Dubai was primarily a fishing economy prior to all this, right? Correct. Speaker B: Yeah. It's always been a trading post. In fact, all three of them have been trading posts, right? So all of them thrive based on market economies of trade. And so those are the similarities. So if you could replicate some of that, you know, it's going to work.

It's worked everywhere. The question is, how do you catalyze it? And that is where our business model is innovative. And picks and chooses from them 3 and then all sorts of other projects. And we've come up with an enhanced form of special economic zone that can be done in partnership with governments through relatively simple legislative procedures so that they can create this political subdivision. And then in partnership with said governments, we can advise on how to create this international best practice governance platform embedded. It's already created in our case. And then we're off to the races.

So I would say those are the best examples and differences between these three in particular and how we've innovated upon them. Speaker A: I think that's really helpful. And so, you know, to go back to sort of circa 2015, 2016, maybe even a little earlier as these ideas were percolating in your brain, you sort of see the fact that, okay, you don't necessarily need the natural resources for this to work. You do need efficient dispute resolution that people can trust and a system of common law, but there's no obvious way to sort of catalyze this into being.

How does that sort of kick off your search for the first charter city, which eventually in 2016 leads you to Roatan? Like, what was the sort of little journey to get there, let's say? Speaker B: As most entrepreneurial endeavors, once you think you have something, You start going out to the market and you test it and you try to sell it. And in our case, we did that. But our customers, our first customer is our governments, right? Like that's who we sell to initially. We want to partner with them to create conditions so that their people are lifted.

And back to technical versus political problems and solutions, a key tenet to our approach is that we're solving for the objectives of a particular government, which tends to be focused on their people, you know, that they have to lift their people up. Every country needs to focus on their people first and foremost. So that's, that's the gist. We went out and started speaking with governments all around the world from Eastern Europe, you know, former communist countries. Speaker A: Wow. Speaker B: To the Caribbean, including Haiti and Latin America, all the way down You know, Colombia down to Uruguay.

Initially we decided to focus in the US. This was back in 2015. Speaker A: As a matter of fact, I hadn't realized that. Huh. Speaker B: We partnered with the state of Arizona and the governor at the time, Doug Ducey, immediately understood the benefits of the concept as he was engaged in moving the state towards a a freer market economy as a way to compete. We created a commission. He asked me to be the co-chair of said commission with his, at the time, chief of staff. And we worked together for almost a year developing the legislative infrastructure that would be necessary to create essentially what we now call charter cities in the US.

It was a fascinating journey. We developed the IP. We have that actually. It's, It's now back a priority for our, for us. But at the time, the, the way to get it done would have required federal, the federal government to participate. And, well, Obama was the president and that was going to be a bit challenging. So in the midst of all that, Honduras reached out and they said, look, we, you know, we love what you're trying to do in the US. Like, we fully get it. In fact, we have a law on the books that I think gets really close to what you're trying to do.

Why don't you come and check it out? And sure enough, we came down to Honduras. We met with the government. We saw the law that they had passed in 2013, the ZEDE law, and agreed it was a really good initial layer. It needed some work to be built upon. You know, it didn't actually create charter cities per se. But it enabled the creation of this very unique form of special economic zones. So long story short, we pivoted entirely from working in the US at the time to focusing entirely in Honduras.

It took us about 3 years of work to refine, you know, the legal framework, create the right regulatory layers. And in 2017, it got approved. 2020, we broke ground, started building the first building in Roatan. And why Roatan? From all the examples around the world that have worked very, very well, the closest one is the partnership, if you will, or the synergy between Hong Kong and Shenzhen in China. Okay, so Hong Kong, again, different way of being created, but once created, became a hub of intellectual and financial capital, and it made it flourish, but also became a platform from which places like Shenzhen benefited tremendously.

And obviously the rest is history. From Shenzhen, there were dozens and then dozens and dozens of additional special economic zones that would leverage Hong Kong as a pathway for capital and, and talent. And then that's what's helped elevate China into a world superpower. We, we wanted to replicate a similar dynamic. So in the context of Honduras and Central America, the island of Roatán was the closest thing to Hong Kong. In fact, it's, it's one square mile larger than the island of Hong Kong. And it has an international airport that you can fly in and out directly daily from Houston, from Miami.

And it's an English-speaking population with, as a matter of fact, a common law set of roots because they were part of, they were a British colony before. So essentially Roatán was a perfect place to start as a launching pad for additional projects on the mainland of Honduras. And that's how we ended up here. Speaker A: Fascinating. And so just to, to take one sort of beat back, you know, you had this sort of Arizona work that you did and then Honduras comes into the picture. When you were sort of thinking of Honduras versus some of the ex-US countries that you had talked to, Colombia, Eastern European countries.

Was the attraction of Honduras primarily that they had baked out the ZEDE sort of framework just much more completely and sort of was more synergistic with what you were thinking of? Was that sort of the main draw at that point? Speaker B: I would say that's what got us interested initially. And then as we studied the country more and the island in particular, we realized that it is, it's still remains a massive opportunity waiting to be unleashed. I mean, Honduras is nearly 10 million people strong, but it is one of the poorest countries in the hemisphere.

Yet it's strategically located, just as Singapore was strategically located, Dubai and Hong Kong. It's strategically located. Roatan and the Northern Corridor of Honduras, which is where the second hub is intended, can be a, a, a very, very successful trading post especially in modern era with, you know, a bit of a decoupling between the US and China taking place where nearshoring is a huge priority. It's just, it's a goldmine waiting to be unleashed, not with natural resources, but with human talent and geographic location to serve both the US and the rest of Latin America.

I mean, it's a phenomenally well-positioned and currently well-timed opportunity. Speaker A: We've talked a little bit about the ZEDE, which is an acronym, Z-E-D-E, for folks that aren't familiar with this. You know, to sort of bring folks into the conversation a little bit, can you give a sort of précis of what that stands for and, you know, what it really means to the extent that, you know, it influences what you were able to do? Speaker B: Sure. The translation is Zones for Economic Development and Employment. In Spanish, Zonas de Empleo y Desarrollo Económico.

And it's essentially a law for the creation of special economic zones. But what is unique about it is that instead of prescribing at the organic law level, the legal and regulatory system that would be inside of the special economic zones to be created through the law, enabled through the creation of a commission that special economic zones created through, through its process could have different legal and regulatory systems. So it created an opportunity for the private sector and the government of Honduras through this commission to come up with the international best practice stack of rules that would apply to a zone, and then they could either replicate that for multiple zones or do another zone that would be different.

And then another zone that would be different. And so what it got absolutely right is that instead of having a central authority like the Congress come up with the specific operational rules for a zone, you know, it's like a big centralized decision for something that is very minute. It created a process as opposed to a prescription. And that process allowed us to work with this very forward-thinking commission and curate from around the world the things that have worked best. And so we were able to co-create with the commission and therefore the Honduran government, a zone, which is now the Prosper Zone, that was best in class and remains.

And I think will always be because of the internal dynamic nature of it. And so we were able to, so that's what made the law unique. Honduras is not known as an international destination of foreign capital. One of the reasons is because it's It's lacked legal stability. It's had corruption and lack of security and several important challenges. Most of those do not apply on the island of Roatan, all the reasons why we started there, like the security issues and all that. But the legal stability is, you know, was a concern.

The ZEDE organic law was created through a constitutional reform that guaranteed a substantial amount of legal stability contractually. International treaties apply. And so we looked at it and we said, well, on paper, it's the most solid piece of stabilization framework that we could hope for. The question is going to be, will the government of Honduras honor it, you know, over the decades? And we figured that they would because we were able to create very powerful incentives, positive and negative, right? Negative being If they were to violate the agreement, very significant penalties would apply.

Positive being, if they just let us do our, our job, we were in a position to bring hundreds and then billions of dollars of investments and create thousands and then hundreds of thousands of jobs, of well-paying jobs for the local population. So we figured over time the, the incentives were perfectly aligned to sustain this agreement. And we're in the middle of that gamble, you know, like literally we're, we're, we're in the middle of that gamble. And I think the jury's still out, you know, the only reason why we're still operating after a very substantial change of government back in 2021, 2022 would have, which would have shot us down if they had their way politically.

The only reason we're still standing is because I think those, those, those structures were and remain very sound and solid. And we've worked our butts off to show results. While at the same time have very powerful institutional framing of protection that, you know, we have to play the game and, you know, we're in the International Arbitration Center to make sure we have our rights protected and revalidated. But, you know, the jury's still out, you know, but you don't get to change the world without some issues, you know, without some trouble along the way, if you will.

Speaker A: Yeah, to put it mildly. And, you know, that foreshadows what I'm sure we'll talk about some of the challenges that you've had to face in these sort of past 3 or 4 years. But, you know, to, to come back to the inception a little bit of this first charter city, the, the city of Prospera, there are these few different stakeholders that I think it's useful for, for people to sort of have in their heads. There's obviously the Honduran government, there's sort of Prospera the platform, but there's also this sort of, you know, private capital element, you know, to, to help people understand how those groups interact.

Perhaps you can walk us through that a little bit. Speaker B: I think this, this is a good time to explain the business model because in essence, because it is a business, it is a business. It is a business. And when we were designing it, we wanted, I mean, look, let me take a step back. The US, right? I mean, the, the, the most powerful nation on earth and probably in history and in a very short amount of time, how did it get to be that? You know, it's because the Founding Fathers created at the time an innovative form of government, you know, of the people, for the people, right?

Free market capitalism with constitutional order. And it's worked great, but it hasn't been perfect. The extent to which it hasn't been perfect, you can bring it down to two core things that unfortunately the founders missed or didn't quite embed, even though part of it was in the Federalist Papers. One is there's no effective exit. So it's intended to be a federalist form of government where each of the 50 states compete against each other, but there's no exit. So they're kind of trapped, right? And then on top of it, you add the Supremacy Clause of the Constitution.

And so it's like whatever the federal government says goes. And so, you know, there's no easy way for a state to, to threaten exit of the union. And if so, that would have kept the central government federal government a bit more in check. And two, the alignment of incentives is not there. You know, the system relied heavily on checks and balances, right? And the founders clearly wrote that it was a government for moral and ethical people, right? In their time, Judeo-Christian values. But it's a check and balance system that depends upon people being moral enough to want to be in check and in balance, but it wasn't arousing through individual private incentives that behavior over the centuries would be aligned to the founders' intent.

And therefore, you know, you get corruption and you get, you know, politicians coming up with rules that actually violate some of the core tenets of a free market economy and the American way of life. 'Cause the incentives are not there. So then take that to our business model and what we try to do and how it all comes together. Is there value in good governance? The answer is absolutely yes. In fact, you know, only societies that benefit from good governance prosper. So it is absolutely valuable and it makes the difference between poverty and prosperity.

So there is value. Unless you can internalize that value though, and, you know, it doesn't matter. It doesn't shape behaviors as much. So there is value in governance. How do you internalize it to be part of the profit motive that keeps people acting a certain way? That's where our model comes in. And we have, as I said, a partnership with governments to create these enhanced special economic zones. But the model of governance as a service is where a company like Prosper comes in They signed the charter. They're responsible for operating the zone with the rule sets that are proposed and approved.

And then if done successfully, what happens is that you attract investment and catalyze economic activity. And if you do that and then you charge taxes, governments charge taxes, the zones charge taxes, they have to be competitive. Zero controversy if you provide a service that you get paid for it. It's just that when you have no market dynamic and you call it taxes, people get a little iffy about it. But if they provide a service, you should pay for it. Okay, so in the Zone, we provide governance as a service, people pay for it, but they pay for it as a percentage, a small percentage of the overall GDP, right?

I mean, again, taxes capped at a percentage level. So then you got the zone operator, us, incentivized to bring capital so that economic activity can, can emerge so that a small percentage of it equals high nominal revenue. So now we're aligned to creating attractive conditions to bring capital, people and activity, but then we're in it for the profit, not for the revenue only, right? So then what comes after revenue? Costs and expenses. In a typical government, there's no profit motive, meaning that their primary motivation is actually to grow the cost and expense line, as— because with that growth comes more power, more influence.

And if you think legitimately that you're doing something good, as a lot of these people do, actually you want to be bigger, not smaller, right? Which means that the budget grows out of proportion. I mean, it's a mess. In our model, you have to grow the top line, and you only do it by having the right conditions and quality service. So you got to have an operational structure which grows as the economy grows, but you only have profit if your costs and expenses don't grow as much. Right. Speaker A: And in fact, if you shrink your surplus.

Speaker B: Yeah. If you shrink that, you got to have a surplus. So unlike a typical governmental structure, our financial incentive is to keep the equivalent of a bureaucracy small and overall high value, low cost and expenses. That's our incentive. That's our investors' incentive. Make a zone attractive, keep operations lean, make a profit. Speaker C: This episode is brought to you by Tezi, the AI agent for recruiting high-quality candidates quickly. When you're ready to hire, it's easy to lose weeks trying to find the right recruiting partner, building their context and filling the pipeline.

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Like, you know, Do Hondurans have, you know, biotech engineers and all these things? The answer is not in high volumes, but in the short term, you can bring foreigners where you don't find a Honduran to fill the role, as long as you're also investing in educating the Honduran population. Okay. So you have an alignment of incentive of employing locally, raising the skills, and importantly, we have a direct revenue share with the government of Honduras. So not only all the spillover effects, but a percentage of the top line goes directly to the Honduran government without them having any operational obligation, meaning it's pure profit for them, which is amazing, right?

I mean, governments generally don't make a profit. Speaker A: They don't have to do anything, but they get a piece of the top line. Speaker B: Exactly. We've invested in infrastructure. We run the day to day, they supervise, they don't administer. So it's essentially pure profit for them. This is the beauty of the model now. So and then the final cap to it, going back to the comment about the founders and America, we have the profit incentive and we've baked in exit. So when a part— when a company or property owner really joins the jurisdiction, They're in it, but it's through a contract upon which we have obligations.

They have obligations as well. But if we violate our agreements, they can exit. In fact, they can exit if they want to exit regardless. There's a process by which to exit, but it's embedded in their incorporation agreement that they can exit, which again, that was not embedded in the constitutional framework of the US. Speaker B: Exactly. We've invested in infrastructure. We run the day to day, they supervise, they don't administer. So it's essentially pure profit for them. This is the beauty of the model now. So and then the final cap to it, going back to the comment about the founders and America, we have the profit incentive and we've baked in exit.

So when a part— when a company or property owner really joins the jurisdiction, They're in it, but it's through a contract upon which we have obligations. They have obligations as well. But if we violate our agreements, they can exit. In fact, they can exit if they want to exit regardless. There's a process by which to exit, but it's embedded in their incorporation agreement that they can exit, which again, that was not embedded in the constitutional framework of the US. Speaker A: Sorry, the charter city can exit or Honduras can exit or the citizen can exit?

Speaker B: Within our model, inside of Prospera, when you join, you know, you sign an incorporation agreement that has the embedded right of exiting the jurisdiction. So if you are a resident, a landowner, and you enter the jurisdiction and now you're under this governance framework, you're not stuck in it for life, right? So aside from the, let's say, proper alignment of incentives, If you're not happy, you can exit. You know, you tell me what other governmental structure you have embedded exit rights. Nowhere else in the world do you have embedded exit rights.

Here you do. Now, the way it's supposed to work is that there's supposed to be multiple ZEDEs competing against each other so that we keep each other in check. Honduras has limited the capacity to create more ZEDEs, so that dynamic is going to be not as powerful as we were hoping, but still people can exit ARZEDE and remain, say, with the municipality or go back to the central government oversight directly. Speaker A: So many interesting threads there. I'm going to try and summarize a little bit to make sure I'm, I'm following you, but essentially the, the different incentives you have, the Honduran government who gets to say, hey, you're going to put, bring a bunch of foreign investment and talented people into this part of the country.

You are going to take care of actually running this for us, but you give us a piece of your top line revenue, let's say from taxes. The underlying business takes that, that taxation revenue and assuming it is able to keep its costs at a low enough rate, takes a profit from it over time. And the people that come into these jurisdictions have the ability to operate under these favorable set of rules. but aren't bound to them forever because they have the right to exit from them. And then maybe the final piece is the local Hondurans are given access to all of these new jobs in which you have sort of mandates to hire 90% of Hondurans where possible, otherwise, you know, investing in education.

And so these are sort of the different stakeholders and how they each benefit. Have I, have I missed anything important there or, or muddled anything? Speaker B: Perfect. There's a good reason why you run a podcast. You can synthesize things very well. Speaker A: Well, I wanna make sure I'm, I'm following. Speaker C: Okay. Speaker A: And so in terms of the direct investment, when you read about Prospera, you, you see a lot of names that I'm familiar with from the tech world, you know, Peter Thiel, Marc Andreessen, so on and so forth.

How much foreign investment have you been able to bring into the city at this point? Because I imagine it's also been, a bit challenged by some of the political upheaval? Speaker C: Okay. Speaker A: And so in terms of the direct investment, when you read about Prospera, you, you see a lot of names that I'm familiar with from the tech world, you know, Peter Thiel, Marc Andreessen, so on and so forth. How much foreign investment have you been able to bring into the city at this point? Because I imagine it's also been, a bit challenged by some of the political upheaval?

Speaker B: Yeah, it's been challenging, but as of right now, we've raised about $170 million in aggregate. It's a fraction of what we could have done by now, but you're right, there's been some political challenges in the country. The last 4 years have been extremely complicated, politically speaking. I had predicted by the end of '25, the number would have been at around $500 million. And I think it will be a lot more over the next 4 years once the political challenges are resolved. Having said that, you know, $170 million, depending on where you're listening from and your context and your experience, might sound like a lot or a little.

So let me put it in context. In a place like Honduras, our project represented about a third of all foreign direct investments into greenfield projects for '21, 2021, 2022, that fiscal year. Our project has generated more jobs than, as far as I know, any other project in the country during this timeframe. Our project has brought more new industries into the country than any other project has ever into Honduras, and not just random industries, but very high-value industries in biotech, in crypto finance. So aside from what we have already done, which again in context has been super relevant and significant, we have been setting up a foundation that has the potential to massively scale, not just because it's unique to Honduras, scale at a global level, right?

In industries that have transformative potential as a result for Hondurans, but for the world as well. I mean, we, we are able to house extremely innovative biotech innovation, you know, gene therapy, stem cell research, all sorts of things that represent value, not just to the people of Honduras, but to the world at large. And that's just in 4+ years under extremely complicated circumstances. Speaker A: As you, you know, just started to break ground in 2020 and have built it up over these past 5 years, What have been the foundations that you've found most important as you think about, you know, how do we create a sincerely productive and progressive Charter City?

Like what, what do we need to get right from the beginning for this to work? Speaker B: To give our team credit, and not just me, but you know, we've, we've, we've managed to aggregate a significant amount of experts and people to get this done. Those many years upfront that went into designing the system before we broke ground have proven to, to be time well spent. Okay. And what I mean is the most important and impactful dynamic that we're seeing today is, is dynamism and the, the customer-centric mentality. Okay. So these are things that you generally don't categorize with or associate with governments, right?

Dynamism and customer centricity. I mean, those are like the opposite, right? You have bureaucracy and like bad service is what you think about because of those two things. Some of the things that we're actually doing on the ground today is not like it wasn't master planned 10 years ago. Heck, it wasn't master planned 5 years ago. They have been emergent opportunities which we have been incentivized and capable of responding to because of the public-private design to this governance as a service structure. Had it not been done that way, if there wasn't a profit motive and there wasn't a dynamic way to operate this where the private sector is the one actually operating on the ground, we wouldn't be what we are today.

We would, you know, probably just be another traditional special economic zone with some warehouses or something along those lines. Speaker A: To put some numbers around it, you mentioned that in '21 or '22, Prospera was responsible for a third of FDI and, you know, has created all these jobs. What is the sort of size of the charter city today? How many residents are there? How many businesses? Do you, you know, try and keep track of things like GDP per capita or whatever the sort of right metrics are for for this company in a way.

Speaker B: Before we talk about Charter City, we got to talk about the governance platform because properly understood, Prospera in Honduras has 3 different hubs. Okay, so the, the aggregate size of the jurisdiction, all of the incorporated land into the jurisdiction is just over 1,100 acres. The size of the DIFC, is about 110 acres. So that's— we're 10 times larger. The size of Monaco, I know, another relevant example that we didn't talk about, but it's quite relevant. Yes, it's about 550 acres. So we're twice the size of Monaco as a jurisdiction, 10 times the size of the DIFC as a jurisdiction.

However, as I said, this is divided into 3 hubs. The first hub on the island of Roatan, which is the, the, you know, what people think of as the city of Prosper when they come here, that currently has about 420 acres. Okay, 420 acres. The remaining acres are in the two different hubs, the biggest one of which is on the mainland, which is the future Shenzhen. It's called Satoye, and that has about 400 acres. In terms of people, we measure them in in two levels. You first have to be an e-resident before you can be a physical resident.

So e— becoming an e-resident is kind of top of the funnel. Many of them come but don't necessarily live here permanently. And I got to check the statistics, but we're probably up to about 3,000 e-residents. And at any given point in time, about 10% of those are on the ground. But because we do conferences and events that will spike up to say 1,000 at a given sort of pop-up event. So the numbers still go up and down. The main bottleneck right now is real estate. Like we need more physical, look, built space, more apartments and offices, like more built space.

And we're working on that. The average GDP per capita last time I checked was about $27,000. And this is about 10 times higher already than the average GDP per capita in greater Honduras. Greater Honduras GDP per capita is about $3,000. And so, you know, for what it's worth, $27,000, which is lower than what we're targeting. But for context, it's quite substantial. And the type of jobs that are filled here vary from the, you know, we have a hotel, for example. So, you know, you have the typical gardener and waiter and we're building.

So you have construction jobs, but then we also have crypto finance. So you have, high-paying finance jobs and biotech. So you have scientists that have developed some really cool IP and are selling very high-value gene therapies. So it's really nice to see in a short amount of time the degree of variability that you can sustain if the conditions are right. Speaker A: So, you know, one of the things that when you read about Prospera, I feel like shows up in every news article is that you know, this is a haven for Silicon Valley billionaires.

It sounds like that is a sort of lazy way of describing this. There's clearly, you know, a more prosperous part of the population compared to the rest of Honduras, but this isn't Monaco yet by the sounds of it. Speaker B: No, not at all. In fact, most of the jobs are Hondurans, as I mentioned earlier. And it's funny, I think a lot of those articles that say that, our attempt to somehow use it in a disparaging way, you know, like if we're creating some enclave for billionaires. And that is not what we're doing, to be clear, it isn't.

But imagine the lunacy of the people writing to think that saying that about a place is somehow a negative. Like, Honduras is not where billionaires go to. Speaker A: right? Yeah. Speaker B: So if it were true that we're creating this, this amazing destination for Silicon Valley billionaires to go in a place that they gen— like, it's, it's, it would be something to celebrate. And as a matter of fact, we have had many, you know, Silicon Valley billionaires come and visit. And in fact, some of them are investors, but that's something to celebrate.

And the reason why they're investing is because they see that the problem we're solving in governance, it's the world's most important problem to solve. Speaker A: Yeah. Speaker B: You know, and so, you know, some people are trying to go to Mars in part because we might screw it all up here on Earth and that's fine. And some of them are trying to find, you know, the cure to death because, you know, we want to live longer to, to solve problems and actually get us to the next wave. We're trying to solve Earth, you know, we're trying to make Earth the most prosperous place possible.

And that is all about governance. And a lot of these billionaires get it, and that's why they're investing. That's why they come. Speaker A: Yeah. Speaker B: You know, and so, you know, some people are trying to go to Mars in part because we might screw it all up here on Earth and that's fine. And some of them are trying to find, you know, the cure to death because, you know, we want to live longer to, to solve problems and actually get us to the next wave. We're trying to solve Earth, you know, we're trying to make Earth the most prosperous place possible.

And that is all about governance. And a lot of these billionaires get it, and that's why they're investing. That's why they come. Speaker A: You know, we, we were talking about the scale of Prospera now, and you know, 3,000 or so e-residents that, you know, about 10% that are on the ground and maybe some more folks that are full-time. Assuming that this, you know, doesn't get totally waylaid by the new Honduran government. Where do you sort of hope to be in 10 years' time? You know, what's the optimistic but realistic view of things when you look at it from your seat today?

Speaker B: I would answer in two dimensions. One is specific to Honduras and the other is more broadly, okay? Within 10 years, in an optimistic yet realistic way, I think Honduras, our projects here could have about 100,000 people involved on the ground between employees and residents. And that is having activated, you know, at least 2 of the 3 hubs, noting that one of them is a much more massive development on the mainland with manufacturing, BPOs. Okay, so of those, of those 100,000, let's say, people involved, probably 75 to 90% would be Hondurans, as I mentioned, and the other would be expats doing all sorts of high-value entrepreneurial stuff.

Beyond that, I would say at least 3 to 5 other Prosperous Cities around the world, uh, that will be done with a different shareholder structure as, you know, as they're designed to be. Maybe most important for us founders and our investors, we don't want to be the only company doing this. Like we, we hope to see several, several companies that have jumped into governance as a service and are carving a niche alongside us, you know, in competition, in cooperation, whatever. But we want to see some of the largest companies, whether they're the Bechtols or the Jacobs, as well as some of the most innovative players realizing that governance is an industry that can be innovated upon and that it is being done.

It's not that it has been done before. It's being done, and as imperfect as they may be, we're showing that it can happen. So we hope to see, say, at least 3, maybe 20, you know, the more the merrier, companies that are in this space innovating alongside us, competing, but then transforming. And this is key, Mario, transforming the paradigm of how governance is delivered, be it that it's a service, okay? That you don't have to be limited to the elected officials. Like they have a role to play and that's fine and we celebrate it, but you shouldn't rely on elected officials to solve every layer of the governance stack.

They can stay up at the metastructure, sort of custodians of the constitution, but then everything below that can and should be done in competition through innovation with the profit motive and exit as being part of the stack. Speaker A: You know, it strikes me that As we've talked about this, we, we talked through the different stakeholders and, and why people, you know, benefit from, from the work you're doing. Maybe the one person that we, we haven't talked about, so to speak, is the Prosperan themselves. What is it that drives people to become an e-resident beyond, you know, maybe believing in the vision as an investor or setting up a company there?

You know, there's clearly, as I've heard you talk about this before, some, some tax incentives and, and other things. What are the main draws there in your view? Speaker B: Well, part of the beauty of our model is that it caters to a very diverse crowd. And I don't mean that in the woke sense. I mean it in that some people are here because they just want to chillax and they want to have a place where they can keep what they've earned, not have to pay crazy taxes each year in a beautiful destination surrounded by smart individuals.

That's a use case. Another use case would be the, you know, Hondurans that would have otherwise left their country because they are high potential, high intellect, and they could go anywhere and be a contender for high-paying jobs or even to start something, but they're choosing to stay here because it's their homeland, because they're close to mom and dad and their cousins and all that, and because actually in some industries, they wouldn't be able to find a better place anyways. And so, you know, this is the best. And then you have people that are coming from Silicon Valley and Europe because they're working in industries that have been heavily regulated over the decades to the point where you can't innovate any longer.

Like it's only designed for the big players to inch their way forward, but little guys can't actually compete. You know, they find in Prospera a very welcoming environment for them to prove out their concepts, their technologies, and then, you know, perhaps go back to the, to the bigger playgrounds and compete with the bigger guys. Undoubtedly, you have some people here that are in it just for business, and then you have many people that are in it for ideological reasons, and they technically could be doing what they're doing somewhere else. A lot of, say, remote workers.

But they understand what we're trying to achieve, the ethos. And they know that just by being here and being part of this economy, they're contributing. So we have a large spectrum. But the bottom line, when it's all said and done, the value proposition is about having maximum degrees of personal freedom with which you can create value, trade freely, keep the vast majority of the wealth you unleash. And then when you do pay taxes, You pay it to an organization that is aligned with your future benefits and is in check of not growing and becoming abusive as so many other governance service providers have become because of the ill-aligned incentive structures that have emerged.

Speaker A: And to put a tangible example around, you know, that, that sort of last cohort you mentioned, the Silicon Valley entrepreneur who says, Hey, the industry I'm working in is too regulated. It's not giving me the freedom to innovate. What does that look like on the ground today? Speaker B: Well, it varies. You have things like advanced gene therapies and, you know, you have this as an example, this Don't Die documentary on Netflix with Bryan Johnson. Amongst the places he went to throughout the world, it was Prosper here in Roatan because that's where he found some of the best and most advanced gene therapies for longevity.

So that's one clear example. But you have drones flying around and people, you know, wanting to innovate in that space without having to spend, I don't know how long and how much money to get permission from the FAA, you know, to doing robotics manufacturing for construction, you know, balancing international business codes on the one hand in terms of intended outcomes, but being able to innovate in building materials and shapes and forms that are new and innovative. And, scientifically better performing, though not necessarily already included in the building codes of a particular municipality or city, to, you know, crypto finance and being able to bring real-world assets on-chain and transact in physical reality, like with an actual apartment, you know, having the mortgage on-chain as an NFT, for example.

I understand there's some of that going on. It's quite varied. I mean, as I said, if there is some ratio between, say, number of people and aggregate GDP and a diversity of things that are being tried, we have to, we are probably at the highest level of whatever that index is. Like the variability for the amount of nominal activity is massive. Speaker A: Well, let's talk about, you know, the challenges. You mentioned that you're sort of partway through this bet. That Honduras will be able to stick to its agreement and that, you know, the sort of setup that you agreed upon is durable enough to survive the changes in government.

To bring people up to speed, maybe you can give a sort of précis of what the turmoil over the past couple years has been and where things stand at the moment. Speaker B: Well, leading up to 2021, there had been 12 years of continuous one-party rule. So the equivalent of the Republican Party in Honduras had been in power for 12 consecutive years. That party was responsible for the creation of the Zede regime, amongst other things. Okay. But to give you an idea for a US audience, the Zede regime was to the National Party what, let's say, the Affordable Care Act or Obamacare was for the Democratic Party in the US.

It became a very politicized issue. It wasn't when the law was being enacted. Okay, so I should, I do, I guess that's a very imperfect analogy, but it became that politicized. But when the ZEDE law was enacted, it was quite bipartisan, you know, 120 out of 128 Congressmen voted in favor of it, but it became very politicized because this party was in power for so long. There were tensions, and in 2021, a disruptor party, which was a breakout of the equivalent of the Democratic Party, but, you know, more radical towards the left, won the elections.

They didn't win them single-handedly. They formed an alliance with multiple parties. A European type of alliance. But bottom line is they were at the head of the ticket and they ran and got in power. And as it's normal, you know, the political pendulum, you know, swings and whatever the last guys did, especially if they were there for a long time, especially if, you know, it's bad and we must undo. And of all the things that they did, the Zed regime was the most notorious, in part because it, you know, it was so exciting.

It has so much potential. They were very proud of it, so they were promoting it, you know, internationally during the election. So it became, it became the flagship, the legacy project of the prior power structure and in particular, prior president. So when this new administration came in, they had several campaign promises. One of them was to get rid entirely of the Zede system and shut down those that were operating as Zede. You know, so imagine that. I mean, we made it into, say, one of the top 3 campaign promises to shut us down and get rid of the system.

And this was in 2021. It's 2025, almost to the end of it. And I don't want to count my chicks before, but we're still operating for sure. You know, very, very limited compared to what we could, but we're still here. Now, why are we still here? Well, because we're doing what we said we're gonna do. We're bringing investment, we're generating jobs, we're creating and opening new niches of opportunity through innovative industries. And because the legal structures that were set up were super sound, very robust, very clear. And we have had the benefit of a very strong set of investors, financial wherewithal included, that say, right is right.

We must prove this. And this is what Honduras wanted. This is what Honduras negotiated. We agreed to it. Now we're going to hold each other to account. So we have one of the largest international arbitration cases against a state currently active through the World Bank in Ixchitl. That is, I don't know, probably three-quarters of the way through the overall process. These are long procedures. 7 years or so. So we're 4 years into it. And so far, we know there've been 4 instances throughout the process where there's been, you know, where the arbitration tribunals had to make a decision in our favor or in favor of Honduras.

In all 4 instances so far, they voted in our favor. So we feel really good about where it stands legally. Like if it keeps going, we're going to win a massive arbitration award. And at the same time, that's not what we're after. As in, you know, if Honduras indeed continues to not honor its agreements, that's where they're, that's where they're going to end up. But what we're hoping for is that our rights are respected, you know, that they're reinstated fully. And there's an election coming up in about a month in Honduras.

Okay. So the 30th of November, there's an election depending who you ask. But the majority of the political analysts expect that the opposition, so not the regime, will win that election. And so we'll go back to perhaps a more sensible set of political circumstances. And I predict if that happens, then we're off to the races. I mean, we got the rockets full of fuel and we just need to be given the thumbs up and we're gonna, it's gonna be massive the next [redacted address] I think will, will be massive for us.

Speaker A: And so to, you know, maybe in a slightly caricaturish way, but I, you know, might be helpful to just make sure I'm understanding. When we look at this sort of current state of affairs, the set of outcomes that can happen from here feel like, you know, this less opposed party can come to power on November 30th, in which case, hopefully, That means you're back off to the races and, and things are sort of, you know, back to normal service, so to speak. You could go through another few years of international arbitration and perhaps you lose.

That's, I guess, a possibility, even though things have been promising and, and you have to sort of wind down the project. And then the third path is that Honduras has to sort of pay some sort of, uh, award or damages, uh, on the scale of many billions, right? Uh, as I've heard you mention it before. And so in that version of things, you sort of win, quote unquote, in the sense of, you know, there's a large outcome, uh, but the, the project hasn't gotten the chance to flourish over the, the 50, 50-year cycle that you were hoping for.

Is that like a, a decent summarization of what you see as the main options here? Speaker B: It is with a caveat that You know, after 5 years of operations under very complicated circumstances, we have managed to prove the business model. Okay. So the primary loser, unfortunately, if things don't get back on track, will be the people of Honduras. Because especially with a massive payout, we will dust off and, you know, keep pushing the model somewhere else where the government is more capable of honoring its commitments. but unfortunately the people of Honduras will miss out.

And so that would be, you know, quite tragic. And I don't think it's going to get to that. Honestly, I don't. I think under all scenarios of a political outcome, there's a way to thread the needle because ours is not a political project. You know, like there are some political undertones just because, well, the way in which governance services are provided. End up being quite related to the political party in charge. And so they like to put labels on things and call it one thing or another. But ultimately, as I said, if you decouple, you know, governments and governance, there's no incompatibility with having different types of governance structures.

If you are a political party, even from the left, like if you are a radical left political party, it's not unthinkable that you would allow within parts of the country in special economic zones. Yes. You know, a much more free market oriented political subdivision. You know, if it's, if it's generating taxes, if it's employing people, you know, if anything, it is actually helping their socialist agenda of redistributing wealth that they otherwise wouldn't have. So it's not for sure a, you know, white or black type outcome. It's just going to be more challenging to get there because you have to deal with politics and the way things look as opposed to the way things actually are?

Speaker A: I think anytime you do something that is, you know, quite revolutionary, this ambitious, that is changing a country in, in one way or another, you know, whether it's happened before as it, as we've talked about or not, uh, there's obviously gonna be criticism. And so, you know, there've been critiques that I've read that, you know, the ZEDEs aren't bringing enough jobs in, they're not bringing enough foreign investment in. And, you know, I think we can argue about what range is acceptable. I think you've noted that by a percentage basis, there's some, some really, you know, good reasons to be positive.

And then there's other sort of arguments around the fact that, you know, maybe this is too much of a libertarian fantasy. I think Paul Romer, the Nobel economist, said, and, you know, these, these different critiques, I think a lot of that, you know, is, is just endemic to this sort of discussion. But if you had to sort of step into the position of one of your critics and, you know, take up one of their arguments, where do you feel like the criticism is most justified, or the place where you feel like, hey, maybe we haven't done enough here, or there really is something to be concerned about in terms of the sovereignty of Hondurans?

Speaker B: Look, I would say the biggest self-criticism, though, you know, hindsight's 20/20. Like, if you could do it all over again, it does tend to be silly hypotheticals. But the biggest failure and the reasons why, but the biggest failure is that we were not more proactively transparent and communicative in the early years. And so in the absence of our voice, with tangible, solid evidence of what was actually happening, speculative voices, many of which were ill-intended and politically motivated, filled the void and started to create this caricature, negative caricature of what the project was about.

Okay, so the narrative was controlled by opposition groups and we were— we weren't loud enough. And again, there, there were reasons at the time the party in power in Honduras deemed it that that was the best strategy. But in retrospect, I think that that is by far the biggest mistake so far. And even with that, the number of people in reality that are actually against Zelensky in Honduras is very small. They're just a very loud minority. When, uh, when this administration the current administration won, and one of their top 3 campaign promises revolved around getting rid of Zelenskyy.

Gallup did a poll as to why, you know, they're trying to figure out, well, why did this party win in the end? Only 3.75% of the population said that they voted in favor of this party because of their anti-Zelenskyy stance. So It's a really small percentage. They're just very popular and it's the type of thing that lends itself to all of the caricatures of victimhood or massive risk or colonization. So it arouses the emotions, but in reality it's neither that nor does it matter that much to that many people. Speaker A: Yeah, you can attach like the most provocative language possible to it and have it sort of stand in as this specter for so many different things rather than maybe reflecting on it, um, as it is.

Speaker B: Anything new and innovative lends itself to that. Speaker A: You, you've mentioned that, uh, there are sort of other places around the world that you hope to bring Prospera, uh, and I think you've said in the past maybe there are 5 countries that you're, you're looking at. Maybe that number has gone up or down, uh, since, you know, whenever that interview was. What's on the, on the docket for the next few years? Like where what looks exciting to you? Speaker B: Well, look, I've begun categorizing in my mind the type of conditions that create a very attractive opportunity for what we're doing.

One is catch-up growth, okay? And this is countries that are underdeveloped with poverty and what have you, and they have a lot of catch-up to do just to get to world standards. Okay, so get rid of poverty and be competitive. And we see Africa obviously as one of those places that unfortunately has a lot of catch-up growth to do. They have a massive young and rapidly growing population that are very enthusiastic about the future they read about online, and they're going to go pursue it and they're going to go pursue it by migrating to Europe or because opportunities come to their home countries.

And we want to be part of the latter solution. Africa is not the only place, obviously, that has a lot of catch-up growth. There's plenty of places in Latin America that have that as well. But catch-up growth is one of the, say, positionings. A second one, which is kind of in the middle of the three that I'm going to mention, is industry diversification. So, you know, a country might be middle income and that's fine. Maybe they're at a world standard, but they want to tap into new industries to grow faster and diversify, maybe not be so dependent on natural resources.

Or in certain, you know, partnerships that the, you know, country partnerships, they want to try new things. They want to diversify their economy and they're kind of stuck with what they have. And so we can come in and be a massive catalyst of diversification because of how our regulatory system works and how we're able to create very attractive conditions for industries that otherwise wouldn't come. And then the third is to, accelerates growth and that, you know, the epitome of that is the US. All right. Then so catch-up growth is easy to quantify.

You can, you can go to a country like Honduras and see, okay, your GDP per capita is $3,000 GDP per capita of Hondurans in the US who go to the US illegally within 2 years is $30,000. Okay. So you have at least 10x growth if you stop exporting coordinate your people and import, you know, international best practice. So that's sort of easy to quantify. What is less easy to quantify is to be in a place like the US and say, okay, your GDP per capita is, you know, whatever, $50,000. But it could be what?

What could it be, right? I mean, I suppose you could look at other places and say Luxembourg and say $150,000, but it's not very credible because Luxembourg is a very niche industry, very, you know, high-value market, whereas the US is massive, right? So what could it be? What could the US be? But the reality is that that's where I think the biggest opportunity actually lies, though harder to quantify. It's got the biggest impact for global prosperity to unleash the power of the American entrepreneur, right? To drive American dynamism, reindustrialize shore.

But also lead in every single innovative industry. And that is something that has been the case historically, but that it's, it's under threat, right? I mean, it's why this whole movement in the US is going on right now. But they're trying to solve the problem with traditional tools which have massive limitations, right? The traditional tools of trying to fix it all top down or through traditional political structures and the traditional governmental institutions is not 21st century by a long shot. So we have 21st century challenges and opportunities. We need to implement 21st century solutions.

And what we're doing in essence is that. And so by far the country that to me represents the biggest opportunity is the US. Speaker A: Amazing. Well, I'll keep my eyes open for Arizona, Nigeria, and, you know, wherever else, you know, you might have on the agenda. A final question that I like to close the podcast with. If you had the power to assign a book to everyone on Earth to read and understand, what book would you like to assign? Speaker B: Atlas Shrugged. Speaker A: I mean, I couldn't have picked a better one there.

I knew that was coming. Speaker B: Yeah. I mean, look, there's so many other amazing books, but because they're so good and they're modern, people are kind of picking them up. But Atlas Shrugged is such a philosophical book when it's all said and done. And obviously, you know, it's got some fiction dimensions to it, but it's got so much profound truth. In current times, unfortunately, too many parallels to the world that is described there with Ayn Rand describing, you know, New York and the US. So for sure, I would say Atlas Shrugged.

Read it. If you haven't read it, read it. Um, and read it and don't go read about it. Like read it. Uh, it's, it'll take a while. You can listen to it on audiobooks. And I think it's, I don't know, 60 to 90 hours depending on what speed you have it read to, but it's definitely worth it. Speaker A: Amazing. Well, I think that's a perfect place to leave it. Eric, thank you so, so much for taking the time. Speaker B: Thank you. Speaker A: That's it. Speaker C: Thank you for listening to this episode of The Generalist Podcast.

Please subscribe on Apple Podcasts, Spotify, or your preferred podcast app. Ratings and reviews help others discover these discussions, so if you enjoyed the conversation, I'd be grateful if you could take a moment to leave one. For all past episodes and more, visit us at com. See you next time as we continue to explore Explore the future. Speaker A: Amazing. Well, I think that's a perfect place to leave it. Eric, thank you so, so much for taking the time. Speaker B: Thank you. Speaker A: That's it. Speaker C: Thank you for listening to this episode of The Generalist Podcast.

Please subscribe on Apple Podcasts, Spotify, or your preferred podcast app. Ratings and reviews help others discover these discussions, so if you enjoyed the conversation, I'd be grateful if you could take a moment to leave one. For all past episodes and more, visit us at com. See you next time as we continue to explore Explore the future.