Xiomara Castro’s government is corruptly overturning a law that allowed for special economic-development zones.
Xiomara Castro’s government is corruptly overturning a law that allowed for special economic-development zones.
H onduran president Xiomara Castro is caught in a web of corruption, scandals, and backroom deals. Rather than address those issues to rebuild public trust, she has decided to shift the blame, weaken the opposition, and hold onto power at all costs. This is evident in her recent move to declare Zones for Employment and Economic Development (ZEDEs) unconstitutional — a decision that puts political survival above the well-being of the people.
Honduras has long struggled with poverty, corruption, and instability, but the creation of ZEDEs a decade ago brought hope. They were designed to attract foreign investment through policies that encourage entrepreneurship while maintaining high standards for labor rights and environmental protections.
One such zone, Próspera, successfully attracted over $120 million in investment, registered 235 businesses, and created 4,000 direct and indirect jobs in just a few years. That’s 4,000 families benefiting from new opportunities. So why dismantle a framework that brought jobs and investment?
The answer is simple: politics.
To begin with, the Castro regime operates in a 20th-century time warp where the Marxist fantasy is still alive and collaborates with fellow Marxist regimes in Cuba and Venezuela.
But this is about more than just ideology. It’s also about shielding those in power from scrutiny. When her brother-in-law was caught on camera accepting bribes from drug traffickers, President Castro didn’t condemn his actions or push for justice. Instead, she terminated the extradition treaty with the United States, which had been in place since 1912. This decision has no benefit for ordinary Hondurans and will make it more difficult to fight organized crime. Its only purpose is to protect those close to the president.
Castro’s administration then pushed the supreme court to rule the ZEDE framework unconstitutional in an 8–7 vote on her husband’s birthday — a highly suspicious move that reeks of political maneuvering. Mel Zelaya, Castro’s husband and a former president, now finds his family more entrenched in power than ever. The timing and circumstances make it clear: The decision wasn’t based on legality or justice, but on preserving political control.
The decision declared the framework retroactively unconstitutional, which violates the rule of law because such retroactive rulings are prohibited by the Honduran constitution. The supreme court decision is already being weaponized against any Honduran congressmen who played a role in passing the original legislation.
Even before the ruling was published, a criminal complaint had been filed by a Castro-aligned congressman to initiate the prosecution of sitting members of the opposition. Thousands of workers and businesses tied to the ZEDEs were given no warning, no chance to present their case, and no opportunity to challenge the ruling. The lack of due process further reveals Castro’s disregard for Hondurans in her attack on these economic zones.
By orchestrating the anti-ZEDE ruling, Castro is trying to sidestep a pending legal battle. Previously, Próspera filed an international arbitration proceeding against the Honduran government for expropriating investor assets, which could result in Honduras paying $11 billion in damages. Castro’s official “anti-ZEDE commissioner” publicly urged the supreme court to strike down ZEDEs retroactively as a means of extinguishing such liability.
But the lawless nature of the politically engineered ruling only makes Próspera’s case stronger. If fully enforced, this ruling would clearly mark out Honduras as a rogue regime with respect to investor protections.
Meanwhile, rumors are circulating about a potential agreement with China to establish a similar “independent jurisdiction” under its control. The same administration that claims ZEDEs are harmful for Honduras appears willing to grant similar authorities to a foreign power.
Thousands of jobs may be lost, millions of dollars in investment may be gone (possibly billions in future investment) and the hopes of countless Hondurans have been dashed. Unless this decision is reversed or moderated, the country will see deeper poverty, fewer opportunities, and a government that prioritizes power over the people.
But there is still hope. Unless all avenues are closed, Próspera is committed to maintaining its operations in Honduras to the furthest extent possible. Even if the Castro regime blocks Próspera’s operations in Honduras, other more welcoming countries, including in Africa, can benefit from Próspera’s model of job creation and economic growth.
Castro’s regime is covering up corruption, weakening international relations, and choking economic development, while the people are left to fend for themselves. Hondurans deserve better, and the global community must not turn a blind eye to the consequences of these political games.