Honduras is currently grappling with legal claims from foreign investors that could amount to a staggering $12.3 billion, a situation that poses a severe threat to the nation's financial stability. The American company Honduras Próspera Inc. is at the forefront, seeking $10.775 billion for a semi-autonomous 'startup city' established under the controversial Próspera ZEDE, which was created in December 2017 [be6a6879].
Since February 2023, Honduras has seen 15 similar claims filed under the investor-state dispute settlement (ISDS) system, which allows corporations to sue governments for regulatory changes that affect their investments. This legal framework has drawn criticism, particularly as it appears to undermine the sovereignty of nations like Honduras, where over two-thirds of the population lives in poverty [be6a6879].
In 2022, Honduras' public expenditures were recorded at $6.5 billion, highlighting the stark contrast between the financial demands of these legal claims and the country's economic reality. The situation has been exacerbated by the election of President Xiomara Castro in 2021, who repealed the charter cities law that facilitated such investments, leading to ongoing tensions with foreign investors [be6a6879].
Honduras' total debt currently stands at $16.5 billion, raising concerns about the sustainability of its economy amidst these escalating legal battles. The U.S. government has faced criticism for its support of foreign investors, further complicating the already fragile economic landscape of Honduras [be6a6879].