Enclave Economies

Discussion

(from an interview by Evgeny Morozov)

Jorge Cuellar:

"Some foreign commentators have voiced concerns that El Salvador might turn into a state that works like a Ponzi pyramid. We have also seen reports about foreign investors presenting a project of private cities, governed by contracts and managed by a company. Where do you see such efforts leading to, especially as they now also begin to attract the attention of mainstream players in the development sector?

I am very wary of these kinds of projects as they are basically creating enclave economies across the region. They are creating walled gardens of prosperity that reproduce and exacerbate local inequalities, creating tributary communities around them that are coaxed into working for the enclave. In Central America, specifically, we’ve seen this in the banana enclave economies of the 20th century that led to much modernization by investment, to the Panama Canal Zone. There are many historical instances where this kind of project-led investment leads to economic apartheid between those who accumulate capital through these endeavors and those who are tasked to labor, often cheaply and without protections, for it."

(https://the-crypto-syllabus.com/jorge-e-cuellar-on-el-salvadors-bitcoin-experiment/)