Castles made of sand
Techno-libertarians are flocking to the Caribbean
Angry locals are trying to shut them down
Illustration: The Economist / AlamyTHE ISLAND of Nevis, a sleepy speck in the eastern Caribbean, is up in arms.
Last year Olivier Janssens, a Belgian crypto billionaire who acquired local citizenship through investment, surprised his 13,000 fellow islanders by declaring the construction of a huge, futuristic enclave.
If approved, the “Destiny” project will span a tenth of the island and accommodate 10,000 new residents with their own currency and courts.
It would be the “Monaco-Dubai of the Caribbean”, according to Mr Janssens.
Locals are outraged.
“You’ve got to be crazy,” says Glendale Herbert of the Nevis community foundation.
The Caribbean has become a mecca for libertarian enclaves over the past decade.
A constellation of so-called special jurisdictions rings the basin, from charter cities to blockchain-based collectives.
“This is where the most daring experiments are taking place,” says Vera Kichanova of the Free Cities Foundation, an American think-tank.
Their promoters are typically Western eccentrics and tech bros fleeing red tape and “woke” politicians.
Such ventures have a troubled history.
In the late 20th century a string of American businessmen tried to establish nations in the Caribbean.
In the 1970s a New York skin-care magnate launched “Operation Atlantis”, towing a cement-iron boat to the Bahamas and declaring independence.
It quickly sank.
In the 1980s a fugitive Wall Street fraudster thought he might escape justice by buying half of Barbuda and turning it into an independent principality.
In 1999 a grifter from Arizona proclaimed ownership of a submerged atoll off the Cayman Islands and named it New Utopia.
Newer projects are less fanciful.
Most are “special-lifestyle zones”, says Ms Kichanova.
CryptoCity, a private town being built on the Venezuelan island of Margarita, is primarily residential.
The “Veritas Villages” being set up by a Canadian entrepreneur in Nicaragua, Panama and Costa Rica are resorts with odd branding.
After failing to forge an anti-statist collective on a Bitcoin-funded cruise liner, seasteaders in Panama now plan to build floating homes called SeaPods.
A project called Próspera is an exception.
Established on the Honduran island of Roatán in 2017, its American founders have used a loose tax and regulatory framework to attract fintech, biotech and robotics startups.
It is backed by venture capitalists including Peter Thiel and Marc Andreessen as well as Sam Altman, the boss of OpenAI.
Labs there run trials outside American regulatory purview, including treatments for Alzheimer’s and cancer, weight-loss drugs and neural implants.
The enclave has its own legal system, called Ulex, which allows firms to choose the regulations which apply to them.
Proponents argue that these projects help locals by boosting employment and competing with shoddy elected governments.
Most sit on fallow land and produce their own energy from renewables.
Some opponents weaken their case by being alarmist—a common claim is that zones harbour sex-trafficking rings.
Others seem nostalgic.
“People are flailing against the idea because they’re stuck in what we used to do,” says Mark Brantley, premier of Nevis and a big supporter of Destiny.
Who is this for?
Yet some of the criticisms are valid.
The zones pay little tax and rarely house locals.
For entities obsessed with sovereignty, they can be flippant about assailing it.
After the Honduran Supreme Court’s ruling that the legislation authorising the development was unconstitutional, Próspera sued Honduras for $11bn—two-thirds of its annual budget.
In April Honduran media published recordings in which Honduras’s former president, Juan Orlando Hernández, appears to discuss the terms of the deal under which Donald Trump pardoned his conviction for drug-trafficking.
In exchange for his release, he seems to say, his National Party was to grant Próspera more land and regulatory perks.
(Mr Hernández has said the recordings are “false”.)
Nevisians worry that Destiny may go further.
It is unclear whether its 10,000 supposed residents would get a vote.
Those against the project fear that if they did, it would let them use a constitutional path to unilateral secession from St Kitts, its federal partner.
“This represents to us on Nevis the single greatest threat to our existence ever,” says Kelvin Daly, an activist in Charlestown, the island’s capital.
And yet those like Mr Daly who oppose the libertarian zones are not making much progress.
One reason is changing political winds, as a crop of right-wing pro-business leaders take power across Latin America.
Another is money.
Próspera pays its workers a premium above the Honduran minimum wage.
The Veritas Villages claim to have an education and health-care charity called Help Them Help Themselves.
In April Destiny offered every resident of Nevis $100 a month if the development goes ahead, on top of a slice of future profits.
The estate agent handling Destiny’s land purchases is Mr Brantley’s wife.
Demand is rising.
Nice weather and loose laws are obvious draws, while the Iran war is forcing rich people to reconsider the safety of the Persian Gulf.
The renaissance in charter cities began after the financial crisis of 2007-09.
Their recent proliferation is probably linked to dissatisfaction with traditional governance, says Paul Romer, former chief economist of the World Bank and an early figure in the movement.
Hondurans and Nevisians are bracing for the consequences.
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