Próspera: Partnering for Economic Development in Honduras

Abstract

Erick A. Brimen's vision was on the verge of reality. As CEO of Prospera LLC, an economic development platform based in Washington, DC, he had devoted years to fostering efforts to bring economic development and stability to a small region in Honduras. He had worked with government officials, scholars of economics and law, and local residents to develop a zone for employment and economic development (in Spanish, zona de empleo y desarrollo economico, or ZEDE). ZEDEs were similar to special economic zones (SEZs), which typically relied on tax and industry incentives to attract foreign direct investment. ZEDEs took it one step further. Through changes to the Honduran Constitution, ZEDEs had semiautonomous governance that allowed them to establish their own laws, taxes, courts, utilities, infrastructure, and even security forces. For Brimen, the governance model was key to reducing risk in the investment. And it offered a way to address what he and many others believed was the fundamental issue that kept people in poverty—the lack of better-paying jobs. At last, Prospera ZEDE's public launch was scheduled for May 2020, as Prospera prepared to close with investors for series A funding. The funding would support its first major project within the ZEDE, called Prospera Village.Yet just as Prospera was about to close on the series A funding, the COVID-19 pandemic arrived. In addition to the human tragedy, supply chains were severed and markets reacted. Investors were nervous as businesses looked to relocate or diversify supply chains out of Asia. How would investors respond to this innovative business model in a developing economy during this time of uncertainty? Excerpt UVA-F-1980 Jun. 10, 2021 Prospera: Partnering for Economic Development in Honduras Break a paradigm—the world changes. —Erick A. Brimen . . .