{ "episodeId": "SLP464", "speakers": { "stephan": { "name": "Stephan Livera", "role": "host", "tag": "STEPHAN" }, "erick_brimen_of_prospera": { "name": "Erick Brimen of Prospera", "role": "guest", "tag": "ERICK" } }, "segments": [ { "speaker": "stephan", "time": "00:09", "start": 8.57, "text": "Hi and welcome to Stefan Livera podcast show about Bitcoin and Austrian economics brought to you by Swan Bitcoin. Swan has a new offer I'm really excited to share with you today for those of you who are US residents or taxpayers. Bitcoin is generational wealth and you can secure your bright orange future with the Swan IRA. Real Bitcoin, no taxes. Swan offers both traditional and Roth Both options to best fit your needs. Create your IRA and start adding Bitcoin in less than one minute. Transfers and rollovers are available, and Swan's Bitcoin experts will help you get set up with no transfer fees and no minimum balance requirements. This is real Bitcoin, not an ETF or other derivative. 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So for today's show, as you know, I'm a fan of free private cities and the idea of privatizing governance, and Erick Brimen of Prospera joins me to talk about this idea of making the world dramatically richer with privatized governance and what exactly is the market for living together, how big is it, and what's going on in practice in Prospera over on On Roatan, so I think you'll enjoy this episode and find it very informative. Eric, welcome to the show. Thank you. Nice" }, { "speaker": "erick_brimen_of_prospera", "time": "02:37", "start": 156.78, "text": "to be" }, { "speaker": "stephan", "time": "02:37", "start": 157.02, "text": "here. So, Eric, I know you're doing some interesting stuff over at Prospera, it's obviously for anyone who's interested in Bitcoin and libertarianism or liberty and freedom related concepts or anyone interested in free private cities, it's an interesting thing. I've, you know, listeners, I've, if you're interested, I have previously spoken with people like Tito Scabel and Peter Young, who also- You know, are related to this concept as well and, have things to add, but, thought it'd be great to chat with yourself, Eric. Can you tell us a little bit about yourself and, you know, how you, how you got into this whole idea of, I guess some people call it the market for living together?" }, { "speaker": "erick_brimen_of_prospera", "time": "03:16", "start": 195.53, "text": "Definitely. Well, thanks for having me again. Look, my journey started from the fact that I was born in Venezuela, and, it's a country that even though it has by any measure a tremendous amount of wealth, material wealth, access to all sorts of natural resources, it's a country that's become one of the poorest in the world with the worst living conditions, and that really got me thinking about why that is. What is it that makes the difference between a prosperous society and poverty and, you know? And ultimately through thinking, through studying, through reading, it became very clear that, if there isn't good governance, and you know, defined in a private property, individual liberty oriented fashion, okay? then there's no way for societies to prosper, you know, and, and so it got me thinking that if I wanted to make the most out of my life, that that's the type of problem I needed to solve, and, You know, looking into it, it's a over a hundred trillion dollar a year problem to solve, if you will. so that's what got me started." }, { "speaker": "stephan", "time": "04:23", "start": 262.8, "text": "Yeah. On the hundred trillion dollar a year problem, could you sketch that out for listeners, like if somebody maybe hasn't looked into those numbers or hasn't seen some of this, could you just explain a little bit about why it's such a big market? Sure." }, { "speaker": "erick_brimen_of_prospera", "time": "04:37", "start": 276.55, "text": "so there's two numbers I want you to think about. There is a thirty trillion dollar a year in recurring revenue number for the market of governance as a service, and then there is a number of between one hundred trillion and two hundred trillion a year of wealth worldwide that goes uncreated because of poor governance. The first number, it's the easier number to- To observe, thirty trillion dollars a year is what people pay in aggregate for governance services, in taxes, okay, and fees to monopolistic governments generally. So that's easy. The hundred to two hundred trillion is derived from the fact that, at least we believe, that at birth, most humans have essentially very similar potential. Undoubtedly, some people are way smarter, some people are born with disabilities, but on average, the vast majority of people People are born with inherently similar potential. Yet, when you look at all the countries in the world, if you plot them in terms of GDP per capita, you know, the average wealth generated in their country per person versus a score, and there are many, but you know, they measure similar things, economic freedom, for example, or ease of doing business. Or rule of law. The higher the liar, the latter, the higher the former. So the, the more economic freedom, the more rule of law, the more ease of doing business, the higher the GDP per capita, okay? And the range is quite substantial. And so if you start from a first, first principles perspective, and most humans at birth have the same potential, yet you realize that at adulthood, they produce drastically different levels of wealth Then it follows that if you were to, let's say, balance out so that most people had, let's say, average governance services, that's where you would be creating at least another hundred trillion dollars a year in wealth. So you grab the GDP per capita times the population in the world, and you adjust the former by the average GDP per capita in well-governed countries. That's the one hundred trillion. If instead you say, \"Well, why would we be mediocre, right? \" and, and let's- Let's not even think way better than we have now, because I do think that even the best governed countries today under a public and for politics structure aren't nearly as well governed as It could be done under private free enterprise, but let's just say that instead of the average, you were to grab the GDP per capita of the top twenty-five percent of the countries today Under the current public infrastructure governance service, then at that level, if you base that out, then it's two hundred trillion dollars in added worldwide GDP. So that, to me, there's no other-- there isn't anything else in the world that you could say, \"If we solve this problem, we unleash this amount of wealth.\" Nothing. So for me, solving governance as a service is by far the most impactful thing that I could be doing with my life, and I think our entire team and shareholders and investors think Think and feel the same way." }, { "speaker": "stephan", "time": "07:52", "start": 471.65, "text": "So it's essentially a statement about unrealized productivity, unrealized potential, because there are all these people who are, let's say, stuck in poor governance situations. And I guess maybe that's one area you-- we, we can spell out perhaps a difference between government and governance, or maybe some people prefer the term the state, right? but, whichever term we're using, I think it would be good to spell out what is the difference between good govern- Governance, whether that's private governance or, let's say, monopolist, statist style governance and, you know, bad governance." }, { "speaker": "erick_brimen_of_prospera", "time": "08:27", "start": 507.03, "text": "Sure. well, let me first say there is a big difference between governance, governments, and let's say the state, okay? The state would be the equivalent of saying, a C corp versus, let's say, an LLC or an S corp. It's, it's a, it's a organizational construct, right? The government obviously is, is the orga- Organization and, you know, made up currently in most places in pub, you know, in a public for politics way, the governance is the service that that organization through the construct of a state delivers to the population. So let's just for now talk about governance, right? Because then we can back into the structure of the operation and then the legal construct that would make most sense, you know, and that we, how, how we see it. So what is governance in the end and what makes the difference, okay? the first thing I would like to say is this isn't an invention of ours, and we're not speculating about it. This is empirical evidence. Empirically, the thing that makes the difference is when you have three components together provided well. One Let's for now call them good rules and the administration thereof. Two, justice, and three, security. And then I'll explain each. Good rules, what works, right? I mean, there are rules in-- is when the system of rules says that the individual is the sovereign, that they have certain rights, the most basic of which is property rights, and the most basic property is your body, and therefore everything that is derived from it, and That the fruits of your labor and your decisions are more important and shouldn't be trumped by the decisions of the collective. There is no perfect system out there that says exactly that, but they are, variants, and the closer you are to that ideal, the better the system empirically. Okay? So those are the good rules. However, just because you put rules on paper, it doesn't mean that that's what's being followed or that it's being followed with ease, and that's where the good administration thereof- Comes in, and this has been solved in different ways. Some people, some governments solve it by having a very light touch, even if they have an old school bureaucracy. Others solve it by having a more forward leaning e-governance, you know, self-service approach, so you don't have to wait in lines or wait for third parties. As long as you do it fast, it works fast. but it has to be administered well, and then you have to make sure on average everybody's following the same rules so that you know what you can expect and others the same. That's the first component, justice. Inevitably, when people enter into agreements, and even if they don't, they're gonna be disagreements with each other, and you gotta have a peaceful way to resolve that dispute. that it has to be fair, has to be fast, and it has to be cost-effective. In many places around the world, you might have the first component, but if you don't have a fair, cost-effective, and timely way to resolve a dispute, things deteriorate into violence on the one hand, or nobody really trusts the rules because in the end, if there's a disagreement, there's no way to enforce them unless you're gonna go to a shootout, so it is fundamental. And third, the security component, there are bad actors, you know, and there's a percentage of population that are sociopaths, but then they're also criminals and people who doesn't matter what a judge says, they're not gonna comply. And so you do need to have a mechanism by which you can, deal with force, with force, right? and force comes in the form of fraud, it comes obviously in the form of physical taking, physical threats. So security is There principally to ensure that when none of the other two things have worked and you still have bad actors, you can, you can enforce the rules, you know, and it's so therefore it's more of a defensive use of force and not an offensive use of force. Those are in essence the three core components of good governance. There are other things that many governments do, but none of those other things make a difference if they don't get built on top of these three things. And if you have these three things, you might do none of the other things, like you might not provide education through government or healthcare, even private inf- or physical infrastructure, you might not do any of the other things, but if you have these three things empirically, you still have a prosperous society evolving over time." }, { "speaker": "stephan", "time": "13:00", "start": 780.12, "text": "I see. And as some of the material I've seen, there are perhaps some historical examples of the way I've heard other people explain it, for example, Titus explains this idea, it's like a special economic zone plus Or that there are some, even though maybe this hasn't existed exactly in this form, there are, there are things that are, let's say, some, somewhat similar. So I'm curious if you have any examples that you normally use there that you refer to, let's say, this area or this city or this place that had some kind of similar structure and the people there did well, there was prosperity or it was, you know, more liberty-friendly, let's say." }, { "speaker": "erick_brimen_of_prospera", "time": "13:37", "start": 816.93, "text": "There are several examples, and I will list a few, but first for my first point principles perspective. Once you establish what the content should be empirically, the next layer to think about is how can you deliver those conditions at a substantial enough scale so that it's of societal impact, not a handful of people, not just one company, but you know, hundreds or thousands of people at a time. So how do you deliver that? And that was the thing I struggled with the longest initially, because you would think that if you have empirical evidence that there is a formula that's the way to lift people up and create prosperity, governments should be all over implementing this, right? I mean, every country around the world, especially, you know, poor countries, should be implementing this formula. It's not rocket science, but because of the political dynamics of a typical state with democracy and vested interest interests, and the fact that even if you could get a better system, the system you have and the system you know is always easier to sustain in your mind than to accept a potential radical change. Change is hard, so there's inertia, and then there's vested interest. You, what I concluded and many have concluded, is that you cannot deliver radical transformation at a systemic level from the top down In a democratic nation government, national government, okay. however, you can deliver it as a subnational jurisdiction, where instead of imposing it upon everybody, you create it as a voluntary alternative to the system that people have, are used to, and if they wanna keep, should be able to keep. And so what mechanism exists out there so that you can create subnational- Jurisdictions with different rules than those that apply at a national level, indeed, special economic zones, of which there are over five thousand around the world, conceptually are exactly that Conceptually, it's part of a nation, but has, by mandates of the national government, different rules generally to promote a particular industry or to deal with an issue that can be dealt with more quickly and effectively at a special economic zone level, et cetera, et cetera. The size, the physical size of these economic zones vary significantly. They can be huge, they can be small. But when you think about what size is necessary so as to make societal impact, again, hundreds of thousands of people at a time, that is when you start to observe around the world examples of where subnational or smaller than a typical country jurisdictions have been created, embedded with unique and differentiated rules as Previously described, and they have worked. Those at the top of my list, I would point to Dubai and specifically the DIFC, Dubai International Financial Center, because from a legal perspective, from a timing perspective, is the most advanced, subnational jurisdiction that has adopted at scale a completely different legal system than what's there, what was there before, primarily so that it could drive transformation formative results, and that's exactly what you see in Dubai. Similar, however, you can look at Hong Kong in, you know, China. Hong Kong, when the British and the Chinese entered into the agreement, Hong Kong was still part of China, but it was administered as a special administrative region under British common law and rule, and it obviously created a very substantial level of prosperity vis a vis communist China at the time and very Interestingly, in the late seventies, early eighties, anticipating that Hong Kong was gonna revert back to mainland China, they started to copy the model on mainland China through special economic zones, the first of which is Shenzhen, which now is a massive city of twenty-five million people plus. Another example is Singapore, which although today is a nation state, it was not a nation state when it was initially founded. It was part of the overall Malaysian region, and, Lee Kuan Yew managed to essentially, seek and get independence because the overall nation didn't want the changes and a number of other historical factors. And it's a city, it's, it's, it's not a big country as you can think of, it's one of the smallest countries in the world. So those are some- Some examples that I think are top of mind for, for everybody, and they, and they all have similar elements of what makes the difference at a subnational level." }, { "speaker": "stephan", "time": "18:32", "start": 1111.59, "text": "Yeah, and I think it's interesting, the Hong Kong example is a particularly interesting one because it was a, almost like this separate British colony in a way that the inhabitants of that colony later became richer than the colony from which they came from, like the average GDP in Hong Kong was, went higher than in, in the UK. I, I think at a point in time, I don't know now, I don't know the statistics, but, it's just an interesting idea to see, oh wow, like things could really change. now, I, I know there are, there are various lines of criticism and, and, you know, people can say things like maybe that was only because Hong Kong was the entry door to China, and therefore if you wanted to do business, you had to go through Hong Kong, and that's, that's why they did so much, they had so much growth," }, { "speaker": "stephan", "time": "19:21", "start": 1161.42, "text": "You know, I'm sort of broadly supportive of these ideas. I, I personally think they are good examples, but I think that there is always going to be that sort of tussle there, and then even as we see with Hong Kong today, the, the CCP is putting in more control nowadays, it, it seems, you're right, in terms of, they restricting who may be, I think available to vote for in Hong Kong, in, in the democracy there. So it's kind of an interesting thing, and I know the project that you've been working on with Prospera as part of, well, inside Honduras in a, as I believe it's called a ZETA zone for economic development, that's been something that's been going on for some time, and I know there is kind of some battles going back and forth there in terms of the, the right for this to exist as well. So could you just outline a little bit of that? I mean, before we get to like Aspect of it, could you just tell us a little bit about how this project got started and, you know, the process up, up to now?" }, { "speaker": "erick_brimen_of_prospera", "time": "20:19", "start": 1218.73, "text": "Sure, definitely. And there is, a whole paper that I and a few of my colleagues wrote and it was published in the Journal of Special Jurisdictions that outlines the whole process in great detail because it's a question that gets asked often. So it is there, you can Google it. However, the process, let's say, had three phases. Phase number one was led in- Entirely by the Honduran government. of course, they had support from various sources, you know, thought leadership, et cetera, but it was entirely led by the Honduran government, and that was the legal infrastructure that was created within the country so as to allow these special economic zones, these enhanced special economic zones, indeed called ZEDES. And they were modeled after Dubai and Hong Kong in essence, you know, they have elements of both, and then they are tropicalized, if I can use that term, or at least made compatible also with Honduran, constitutional requirements, culture, et cetera. That process, was, a steep effort, it required a constitutional reform twice because in the first attempt- what was created, perhaps was, was not sufficiently aligned with the constitutional requirements of Honduras as per the Supreme Court's decision at the time before two thousand and thirteen. And so there was an attempt to create these types of enhanced zones, which then the Supreme Court deemed that they hadn't been created with all the constitutional protections that are required. So then Congress went back to the drawing board, they dealt with and let's say fixed the The issues that the Supreme Court had, pointed out, and then they again passed a, a constitutional amendment and reform, keeping the best practices that have been observed elsewhere, but making it compatible with, the Honduran Constitution, and then the Supreme Court ruled that indeed they now complied, and that, and that took for, that took a long time, as you can imagine. I mean, the, the law initially passed the Zede Law, the one that was recreated to be constitutional. Passed in two thousand and thirteen, but then, you know, it took a while for the Supreme Court to take up the case, and it wasn't until two thousand and fourteen-ish that the first decision came through, and then there were two others that had to be processed. So that was the first stage. The Honduran government creates the legal system. Second stage was, okay, well, let's, go from a basic law to a, a chartered zone. Okay? So the, the basic law basically says, you know, zones can be created that adopt as internal rules international best practices, even if those standards are different than the Honduran legal system, including the capacity to- To adopt common law as opposed to civil law. Honduras is a civil law country, and after the constitutional amendment of the zones, it can also have common law subdivisions such as this. So that's what the law says, but it-- the law didn't not spell out the internal governance of the zones, what specific standards were gonna be used, all sorts of things, right? So phase two was done very much in collaboration between Prospera. And the designated authorities of the Honduran government in the process of Prospera applying for, the first city of the country, being granted preliminary approval, ultimately final approval, but then, you know, having to work with the government to create the Prospera charter, the internal statutes, and all the internal rules that now govern, if you will, the special economic zone by virtue of following the constitutional and legal process where The promoter and organizer, in this case Prospera, Honduras Prospera Inc, would propose to the Honduran government how the zone, you know, ought to be structured according to international standards. They reviewed it, there was back and forth, eventually they approved it. Okay, and that took, it took about two, two and a half years of back and forth, and that, and that was the meaty part of it, and that can be found in the Prospera charter, that's phase two." }, { "speaker": "stephan", "time": "24:41", "start": 1481.23, "text": "Yeah. And I'm curious then, so in terms of like the sales pitch here, like, what Hey, we wanna set up this free private city and we're gonna create jobs and like, 'cause from their point of view, why would they want-- why would they go with this? Like, why would they care? You know, why couldn't they just say, \"Nah, beat it, we don't care,\" you know?" }, { "speaker": "erick_brimen_of_prospera", "time": "24:59", "start": 1498.77, "text": "Sure, well, the pitch starts with observation of the current facts. Honduras exports hundreds of thousands of people a year who leave their country of birth in pursuit of a better life. The country they leave has an average GDP per capita of about three thousand dollars per year. The predominant country they go to illegally, the US, within a year and a half to two years, according to Pew Research, enables those same human beings Okay? Obviously, without a substantial training education, with very negative conditions, because they're illegals, et cetera, enables them to generate more than ten times in wealth per year. So their average annual earnings in the US is thirty thousand dollars. They have a ten x increase in less than two years, just because they cross a physical border, on the other side of which, compared to Honduras, there's better governance. Okay? So the, the, the, the pitch is quite simple. Is stop exporting your people and import international best practices in partnership with a group that can administer in a public-private partnership type setting the implementation of those rules and standards that in your country will enable hundreds of thousands of people to be at least as prosperous as they are when they leave and over there they're illegal, they don't have their family, they don't speak the language. Instead, at home, it's their country Your birth, it's their place, their, their language, their family support. So first and foremost is stop exporting people and now import international best practices, lift people up. Obviously, it's not just about words on paper, let's say the rules, and that's what phase three is all about, is you gotta actually build these places because, you know, you need the combination of the hardware of a city, roads and buildings and, you know, all the physicalness of it, and then the software, which are the rules and the administration And they're off. You're gonna merge these two. So another big advantage, obviously, is all the foreign direct investment that comes into the country to build up the physicalness of it, which enables businesses to come, people to come, invest more money, and yes, that translates in jobs, and then that translates also in, in consumption of local supply of labor, of material, so as you're building it, you're stimulating the economy. Once built, you're stimulating the economy. So it's not just about what happens inside the zone, it's all of the positive spillover effects that, that take place during construction and after construction." }, { "speaker": "stephan", "time": "27:35", "start": 1654.87, "text": "I see." }, { "speaker": "erick_brimen_of_prospera", "time": "27:35", "start": 1655.17, "text": "And, and so they don't have to put any money, this is all private capital, it doesn't require the, the government to invest any money, it doesn't require the government to gift any land. the government on top of it all has a revenue share from the top. So there's a revenue share of all the taxes that the special economic zone collects, which before it was created, there was no taxes being collected. So it's all upside, and the, the government then gets a percentage of that without any substantial obligation for service, meaning it's all, you know, money available to invest in other areas of the economy. Of which the organic law directs the government to invest it in education, in healthcare, in infrastructure, national defense, so this is, I won't call it free money, but it is money they can use for other things that otherwise wouldn't have had, without having to pay or gift anything to, to the developers of these zones." }, { "speaker": "stephan", "time": "28:34", "start": 1713.75, "text": "Yeah. So I guess to summarize, the idea is, hey, let's have best practices in terms of governance, as we said, good rules, security, good administration, and the- This place will have, it'll have a lower tax rate, but still a tax rate, and some percentage of that will go to the Honduran government as well, that they can then put towards education and so on. And the idea is that there will also-- it'll be, well, the hope is it's, it's a win-win-win all around, that people are getting economic opportunities and so on. I suppose one area where, now, e-- easy for us to say, but I guess people, maybe a Honduran could maybe have a criticism of, \"Oh, is During government, and I pre- I presume that was like some of the arguments that were going back and forth at the time, or perhaps even now?" }, { "speaker": "erick_brimen_of_prospera", "time": "29:20", "start": 1760.39, "text": "It's certainly the argument, but again, if we go back to first principles, we have to first consider what is sovereignty to begin with. What is sovereignty? You know, before the Middle Ages and feudalism, you know, there was-- it wasn't the case, but as a continuum, imagine forms of government going from, say, general anarchy, no central state, no structure, no organization. To feudalism where you had, kings and monarchs, and literally the word sovereignty comes from defining the sovereign, the sovereign being the, the god anointed human being that supposedly has the ultimate authority to decide upon the lives of his or her subjects. Okay? That's where the word sovereignty comes from, as if the king has power over its subjects. To then moving towards democracy in various forms, starting with Magna Carta, American Revolution, but in essence that was a transfer of the notion of sovereignty further away from a particular individual or monarchy to the people via the representational government that they instituted. Okay? So it got, it, it, it was shifting closer to the people, but in essence vested upon a government that's supposed to act, not to- To pursue a monarch's interest, but to pursue the individual's interest. But the underpinning as to why, the morality, if you will, the, the, the justification is that sovereignty actually belongs to the individual. It is the right to self-determination. People think of the governments having the right to self-determination, but that is only legitimate because the governments are supposed to represent the people's interest. That is why today everybody appreciates and seeks to uphold Sovereignty in the hands of representative governments, but it belongs to the people's right to self-determination. And so with that in mind, there is no stronger act of sovereignty that a country can pursue than to create more optionality For its citizens to have a greater degree of self-determination, where they can voluntarily choose, not just to stay with one system, monolithically speaking, that everybody has to follow, but under an umbrella of oversight human rights, I mean, there's some things that are universally accepted, but within that umbrella, transferring even more power to have self-determination to the people where sovereignty now in our minds belong, to have more options. As a first principle, not only is Azere and what we're doing not a violation of sovereignty, in fact, it is a mechanism by which to augment, to express their sovereignty. It enhances sovereignty. Now, that aside, that's the first principle's argument And I obviously, I believe it wholeheartedly. Then you have the optics and you got the politics, okay? And what generally speaking is, thought of as sovereignty is whether or not a particular bureaucracy government has absolute control over everything in a territory And that is not really what sovereignty was ever meant to be. That in fact is counterproductive to what creation we have. Central planning, concentration of power, it breeds corruption, it breeds inefficiency, and that's exactly what you see in this region. So a lot of the criticism let's say that, Some political elements in Honduras and in the area really stems from the notion that they won't have the same level of administrative cumbersome power and control over everything Because perhaps they erroneously think that that is better, although in fact it isn't better, it's worse. and having said all that, that's the perception, the reality is that the Honduran government absolutely retains substantial supervision and control over all matters that are sovereignty related. In addition to oversight over things that are administrative in nature to ensure that the local government of the ZEBIT is compliant with the charter and the rules which the Honduran government established for it to, to follow. So at whatever level you wanna think about, there is a-- there isn't, there isn't a \"they're there.\" When it comes to Zelis violating sovereignty in any way, shape, or" }, { "speaker": "stephan", "time": "34:02", "start": 2042.5, "text": "form. Right, yeah. Also, would be good to just give us a bit of an overview for people who are interested, like if they are interested to potentially go work in Prospera or set up something in Honduras in Prospera, what kind of taxes and what kind of costs are they looking at? And in terms of getting rights to actually live there, work there, is it tied to basically getting Hondurans or Honduran? Residency or working rights?" }, { "speaker": "erick_brimen_of_prospera", "time": "34:31", "start": 2070.66, "text": "Great question. So let me start with the latter part of it, insofar as Prospera's area is indeed part of the national territory of Honduras, anybody in order to be legally within this area has to also be legally within the country of Honduras. And there's a number of ways in which people can be legally in Honduras, on, for better and worse, Honduras doesn't have, immigration, you know, a migration problem, you know, they're not trying to close their borders because too many people are trying to move to Honduras. So it's It's actually quite easy to get residency as a, just as a resident, there are investor visas, there's a number of visa options that you can get to ultimately get national residency. and it costs, you know, about twenty-five hundred dollars, and it takes, you know, three to nine months depending. And anybody looking to relocate as a permanent resident can be connected with local lawyers that we have vetted and that provide great service on that. And it's just sort of, you provide paperwork and then forget it until it's done. And then within Prospera Zed, you also get a Zed residency for which you apply, and there are different levels. you can start with simply an e-residency, which you can get at eProspera dot And, those start at a hundred thirty dollars to two hundred sixty, and it's just an e-residency, but it does give you, you know, the right to go physically and be there for, I think, a hundred twenty days out of a year. now if you wanna also- own property, transact, live there permanently, if you will, then you get the full physical residency that, for foreigners is a thousand three hundred dollars a year And for Honduras is two hundred and sixty dollars. now in terms of the benefits, the first thing is that the Z has adopted a most favored treatment approach to how it manages taxes. So if you're coming from a different jurisdiction in which, in aggregate, residents had better tax treatment than the default tax standards of the Z, they submit a form and basically petition to be treated at the same, in the same way, at the same standards. So if you're coming from a place that's better than the default in the Z, you can at worst have the same standards. The default, however, if you don't have, you know, better standards that would have applied to you, is, in essence, it's five 5% income tax. It's, 1%, i-it's 10% income, 5% for individuals, 10% for corporates, but calculated as 1% of revenues to make it super simple. So that's income tax. Then you have, a sales tax for internal consumptions equivalent to two point five percent and, land value tax, not property tax. The value of the land, if you build a building, the value of the building itself doesn't count, it's the value of the land of one percent per year. And those, that's it. You know, a very flat, simple income tax, a small sales tax, and then a land value tax. And, and they were all necessary, especially the income tax, although- So ideally there would be no income tax for a number of reasons, but the IMF, International Monetary Fund, has, you know, certain standards, and if the jurisdiction didn't have some level of income tax, at least of ten percent, then it could easily be deemed a, you know, a tax dodge zone, you know, and, and then it gets put on gray list, and that's of no good to anybody because then banking becomes problematic and all that. So that's, that's from a taxing perspective, and that can represent a lot of money in savings that then can get Get reinvested, but I, I think that most of the value for entrepreneurs, especially those that are on the innovative side of things in highly regulated industries, the primary value is to have the freedom to do things. Alright? I mean, it, it's not anarchy, it's not wild west, but the concept is do no harm. If you, if you do no harm, then you're free to do whatever it is that you need to do and innovate and push the boundary, create new wealth, develop technologies, and that- But in many, in many ways, it's by far the, the most empowering dimension of what we're doing." }, { "speaker": "stephan", "time": "38:44", "start": 2324.36, "text": "Back to the show in a moment. As you all know, I'm a big fan of multi-signature and Unchained Capital can help you going to multi-signature. You can remove single points of failure in your Bitcoin security setup. Many people leave their coins on an exchange or with a custodian or even trust a single signature hardware wallet. With Unchained Capital, you can upgrade to multi-signature. 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And so going back to that question around what, you know, government governance, what, what services essentially are being provided by Prospera and what's just considered like, you do your own thing, right? Obviously, I, I presume there's no welfare state, there's no, you know, can you just spell out, you know, for people who What's being done by Prospera? Is there stuff that's still being done by Honduras, I guess, for the island or that area? And then just what's on your, what's your responsibility?" }, { "speaker": "erick_brimen_of_prospera", "time": "41:18", "start": 2478.45, "text": "So as a whole, the island has basic services as you can imagine. I mean, there is an international airport on the island, you know, the roads and all that stuff, and we pay for our use of infrastructure, we being the state has to pay for the use of services and infrastructure that the rest of Honduras provides Okay? At a fair market value. So, but that's not something that individuals need to worry about, that's part of the deal. within the Z, okay? I want you to consider two dimensions. One that is, governmental services provided as a governmental entity, either by legal mandate or by choice as a government. And then there are services and things that are provided by Prospera Inc. as a private company that are not monopolistic in nature, people can choose to use them or not, but we feel are important to have as a fallback while there aren't any other providers or just as another option. So of the first- First layer, basically it's the three things I mentioned. We have created a system of good rules and a system through which to administer those rules mostly online with some oversight of people that audit and have compliance, but it's very light touch from an internal team, okay? And you can go to eProspera dot hn and when you create your e-residency, you can create legal entities. Part of what you do is you, you do your regulatory election and that, you know, has the rules that would be implemented. For your particular activity. The second is the justice part. So Prospera has a dedicated arbitration center called the Prospera Arbitration Center. You can go to p a c dot h m or pac dot h m, and that is a standing bench of, senior, seasoned judges that anybody at Prospera has Access to in the event of, contractual disputes, but also other disputes, including with the jurisdiction itself. So we have the service, low cost access to justice, and indeed the third level is security. Prospera by law, Prospera Zed by law is responsible for ensuring that within its jurisdiction there is, you know, the basics, police, you know, you know, just the, the maintenance of peace in general, and if there is a commission of crime, then the Zed Has the obligation to prosecute it, to deal with it. It obviously can and does coordinate with national authorities, but within its jurisdiction, it has the exclusive mandate to ensure that there's peace. That the, the layers of governance services as a governmental entity, by law, the Zelle also has to ensure That citizens have access to education, to health, and to justice if they can't afford it, and the way that the ZVE has, handled that Is by injecting as much free market into the process, and instead of providing the service itself, it is in essence, requiring that out of every salary payment that an employee gets, the employer sets aside, ten percent For a, an account that's called a labor benefits fund, which belongs to the employee, it's portable, it's not, you know, doesn't belong to the company, it's more like a, it's a combination of a health savings account and a 401k in the US, insofar that it's, it's portable, it's easy, you can invest it, you don't have to, but that is not only there to, encourage savings for long term, but it is the first line of defense so that if somebody says, hey, you know, Lawyer, I can't afford it. Well, that is the first pot of money, if you will, that is used to cover for legal fees or to cover a medical emergency if they didn't not responsibly seek private insurance separately or if they say that they can't afford education. And that's the first line of defense, and what we're finding, as you would expect, is that all of a sudden it doesn't get perceived as free because they have to pay at least part of it, and so people are much more judicious and proactive at covering their needs. And if it- It gets to it, instead of just going and consuming services as if they're free, as it happens often when there's free healthcare, free education, they are, they, they, they, they use it, but it's what they need, not more, and that's working out very well. So that is at the governmental level. And then at the private level, obviously we're building physical infrastructure, including roads and water, and those are of public access, but they're private, okay? And if, and you use those, you pay. Right now we don't have tolls on the roads Pay for water, they have to pay for electricity, you know, any access to common infrastructure is paid for as a service." }, { "speaker": "stephan", "time": "46:11", "start": 2771.04, "text": "I see, yeah. And can you just give us a flavor of how many people are on the-- well, to be clear, there's Rotan the island, and as I understand, Prospera is part of, is a section of that island. So if you could just spell out for us how many people today are, let's say, living or working in Prospera and just give us a rough idea of the size there?" }, { "speaker": "erick_brimen_of_prospera", "time": "46:31", "start": 2791.24, "text": "Sure, absolutely. So the island of Rotan Interesting. is one square mile than the island of Hong Kong, okay? Thirty-six square miles versus thirty-five, if I remember correctly. However, it's thin and long as opposed to, bulky and kind of round as the island of Hong Kong is. But it's aggregate, it's a bit larger than the island of Hong Kong. There is at most a hundred thousand people that live between the three bay islands, of which Rotan is the largest. So our guesstimate is that on the island of Rotan, there's about seventy-five thousand people. Less than a hundred thousand in total compared to the island of Hong Kong, where there's one point two million people living permanently, you know, there's a huge difference. And on the island of Hong Kong, what is actually occupied is less than a third, it's about twenty-five percent of the surface area of the island, mostly around the Victoria Harbor area, because the vast majority of the surface area of the island of Hong Kong are natural reserves, you know, nature, if you will, parks and what have you. They're able To pack more than ten times, the number of people in less than a third of the island compared to the Atlantic. So this is really cool and exciting because it shows that when you plan density right You can have not only a lot more collision and economic activity, but you also have less environmental impact and, you know, affecting the overall, sprawl of the island. But that's a bit of a side note. Specifically to the size of Prospera, number of people, etcetera. within the Prospera jurisdiction, there's now about a thousand acres, but they're not all continuous. The main hub is at the middle, on the middle of the Roatan Island, in the French Harbor area. And that adds up to, just north of four hundred and twenty acres and thereabouts. Then there is about four hundred acres on the mainland on which there will be an industrial park supporting nearshoring from, from Asia back to the Western Hemisphere, and as I said, it's about four hundred acres. And the balance is on the eastern edge of the island, you know, that won't be developed for now. It's a beautiful, pristine, location that eventually will be, I think a high end Eco living community. Right now, in terms of people working and living within Prospera, since there are, there's, there are different companies already operating in Prospera, and we don't have like a central office that's counting everybody's employees, that's, you know, that, not, we don't do that type of central planning. But it's easy to estimate that there's at least a thousand employees right now in aggregate between, you know, at all levels, agricultural, construction, you know, knowledge workers, management, consult, you know, about a thousand in total, and The first residential tower that is being built will open up to, to the public this summer, and that tower has north of eighty residences. And it's one of three towers, the total of which will be about two hundred and fifty-six residences, just that development. So there aren't any full-time, there aren't a high number of full-time residents physically within the zone yet because the residential units aren't there. I live within the zone, I live full time in the zone, my house is in the jurisdiction, but there's easily less than a hundred people living full time in the zone right now until we continue to build more residential inventory, of which you asked, okay, how can people get involved? This is one of the ways. I mean, literally we're building a city, right? So real estate developers out there that share the vision, want-- there's no other opportunity in the world to literally come and build, right, the city of the future with the system of government Governance that empowers individuals to be free and prosperous. So if you're a real estate developer, we have a whole inventory of over thirty projects that are part of our overall development master plan, which we can't execute them all at once, right? And ideally, we partner with third parties to come and co-invest and execute. So that's one obvious area to come and partner with us." }, { "speaker": "stephan", "time": "50:37", "start": 3037.46, "text": "Yeah. And if you could just give, like, as you mentioned, a lot of it is yet to be built, but could you give just a rough idea for people who are interested, what kind of price Somebody wants to buy a property or an apartment or something like this. Do you have like a rough number you could give people just so they know the ballpark?" }, { "speaker": "erick_brimen_of_prospera", "time": "50:55", "start": 3055.38, "text": "the residential project I mentioned is Duna, Duna Residences, so you can DunaResidences dot, I think it's dot com or dot ch, I'll double-check. But those apartment units, start in the eighty thousand dollar range and they top off in the two hundred thousand dollar range. they are meant for young professionals, mostly in the knowledge work economy, you know, digital nomads, et cetera. So that's the range. the additional towers, the market feedback is that people wanted bigger units as well, so more three-bedroom, less studios, for example, so the average price will go up a little bit, more in the two hundred fifty, three hundred thousand. That's one project. But within the thirty-plus real estate projects that I mentioned, there's a full spectrum. We have, condo tower expected to break ground, you know, later on this year, and those units start at the four hundred and fifty thousand dollar range and they cap off in the almost two million dollar point. And but these are high-end luxury apartments, large, they are within the pristine Bay Beach Club, which is, you know, by far the best amenities on the island, beachfront, wonderful pool area. I mean, it's fantastic, it's, you know, it will compete against anywhere in the world and For the quality, it's great price point. And then of course, we have the Dejavu project." }, { "speaker": "stephan", "time": "52:12", "start": 3132.36, "text": "I see, yeah. And I just checked it now, it's DunaResidences dot com. Interesting. Okay, so, yeah, so I guess that's kind of a few ideas on how to get in, I guess. also the other big topic obviously we have to chat about is this whole, anti-ZETA movement that seems to have come as I-- You correct me if I'm getting this wrong, right? But as I understand, there was a new leader elected, I think this was last year, and that they are very, you know, anti-ZETA, and there's been kind of some back and forth in the media there. can you give us an update? What's the status there? I guess that's probably going to give people a bit of uncertainty about the status of the, you If it's, if it's about to get shut down or not? Yes," }, { "speaker": "erick_brimen_of_prospera", "time": "52:55", "start": 3174.6, "text": "indeed, I would say that the rhetoric is a, is a lot more incendiary than the reality on the ground, not to downplay the, the negative impact that the negative rhetoric has had, it's been significant in a number of ways. However, what we're discovering is that the vast majority of that comes from a lack of understanding. Of what actually we're doing, like what Prospera is doing, and I'm not talking about Zelle in general anymore, I'm talking specifically Prospera. and that a lot of people, when they looked at the original law And in fact, the law doesn't specify in great detail how the Z is supposed to be structured, and given the history of colonialism in the area, given, you know, a number of, let's say, historical baggage It is easy for people to look at a sandbox that enables all sorts of things and imagine that it can be misused, it can be, you know, abused, et cetera. So a lot of the concerns revolve around either what people imagine it could be done, could have been done with original law or what they think we're actually doing, right? Like if it's some sort of enclave for criminals or just, quote unquote, just foreign rich people. And all that to say that as we are engaging with government and, you know, in every opportunity possible, we, we find that- Through them better understanding, a lot of the fundamental concerns they have start to wither away. That doesn't deal with the political issues because there were promises made by the administration, to get rid of zellos, and indeed they repealed the law, so no more zellos can be created. Prospera has a fifty-year legal stability guarantee, so, you know, their acquired rights and it's here to stay. But what I'm, what I'm finding is that when and as we engage, they realize that what we have is actually very reasonable, that a lot of these concerns are not, in practice gonna be a problem, and that there are ways for them to be, let's say, put at ease at a greater level, either with the systems that are already in place if they actually utilize them, or with a handful of tweaks here and there so that they can have more oversight, more participation, whatever it is, and it doesn't change the fundamentals. Of the vision of creating this good govern-- well-governed environment in which capital and prosperity can come. So, that is what's really happening. I'm very optimistic that things will be able to be resolved. And, you know, we've also initiated international arbitration, because unless we can resolve this issue quickly, the damages might be, you know, ir-irreversible. And we also want to make sure that the Honduran government had the opportunity to consider The implications if they were to go down, you know, downstream and cancel the program and/or seek to expropriate, which would be the worst, right? But, and so that is ongoing. It creates a formal forum to arbitrate and seek a resolution of the differences. And if we can't, and/or they refuse to, or they violate, then, you know, they're on notice, if you will, as to what the damages would be, which are substantial, almost eleven billion dollars is what the external experts have estimated. but that's, you know, that's not really the, that's not where we wanna end up. We have, we're so excited about the project, it has so much potential, it's already showing to work, and it's a win, win, win, win all type of project. I think right now we" }, { "speaker": "erick_brimen_of_prospera", "time": "56:27", "start": 3386.94, "text": "That all the relevant parties see the facts, and again, if we need to tweak things here and there, I think it's gonna be very viable." }, { "speaker": "stephan", "time": "56:34", "start": 3394.27, "text": "I say, yeah, and, as I understand, you were mentioning the, the international tribunal, so it's not something that's being tried by, let's say, a Hondurans or a Honduran court. So could you elaborate a little bit on that dynamic that, as I understand, the way Prospera has the agreement with the Honduran government and it's being arbitrated Or seen in the court by a separate court, right?" }, { "speaker": "erick_brimen_of_prospera", "time": "57:00", "start": 3420.17, "text": "Correct. a fundamental part of the deal early on was not just to ensure that the legal regime had stability for at least fifty years, but almost more importantly, but certainly at least equally importantly, that if there was ever a dispute That dispute wouldn't be settled by Honduran courts, it would be settled by an international tribunal using the International Center for, you know, investor state disputes, which is part of the World Bank. It is, headquartered in Washington, D.C. and has jurisdiction through international law, to define and decide and their arbitral awards. Have, can be implemented anywhere in the world, you know, and the-- and this is the mechanism in which, when governments go rogue in other parts of the world and they do cross a line to expropriate and what have you, the, you know, investors that were savvy enough to set this up go to ICSID, get an award, and then they enforce that award against, let's say, Argentina or Peru or whatever, and through international courts Any assets of the country can be frozen until that debt is paid, and this includes like presidential planes, naval ships, bank deposits, then it, then it, it's just as if it's a court order against an individual, and that's internationally recognized. So it's outside of the hands of the Honduran judiciary because it was from the beginning decided that any disputes would be resolved in this tribunal. And it is further protected by the fact that it is part of CAFTA-DR, which is the Central America Free Trade Agreement that Honduras and other Central American countries signed with the United States of America. And so there, there's a lot of dependency and benefit. Mind you, in preserving that, international treaty, because it gives Honduras preferential access to the American market and economy, but it, it depend-- it, it is subject to Honduras complying with, with, amongst other things, arbitral awards should there be one down the road. So we hope it doesn't go down that path, because our, our predominant preference is definitely to keep proceeding, building, and, you know, developing this amazing vision. But if the Honduran government were to go down that path Then, you know, we have a very, very solid pathway ahead, and our investors will certainly be made whole for, for the lost profits that we were counting on for the next fifty years. And this applies to anybody coming on board as well. So any investor coming to co-build with us at power and what have you, they have the same protections that we have, and of course, we would do everything in our power to ensure that, their rights are protected as well." }, { "speaker": "stephan", "time": "59:45", "start": 3584.66, "text": "Yeah. And I actually met, Dusan Matuska at, the recent, at the Liberty in Our Lifetime conference, and he mentioned he's, he's there doing some Bitcoin education work as well. So can you tell us a little bit about the situation there? Obviously, it's a Bitcoin podcast, so can you tell us a little bit about what's, you know, happening there from a Bitcoin perspective, and, you know, what might interest the Bitcoiners?" }, { "speaker": "erick_brimen_of_prospera", "time": "01:00:07", "start": 3607.54, "text": "Absolutely. Well, first of all, Dusan is doing a fantastic job at, evangelizing and educating It's such an amazing and transformative technology, but what's happening here is, is really exciting and unique because, you know, you have El Salvador, which adopted Bitcoin as legal tender and it was a bit of a top-down decision, and if you actually go to El Salvador, I've, I've heard mixed reviews and I have had mixed experience as to whether or not Bitcoin really is, you know, legal tender in practice, as in can you really use it everywhere? Either way, the approach is sort of antithetical to what Bitcoin is all about, which is a central government imposed in essence, right? In Rotan, what's happening is that it's, it's kind of a bottoms up, it's a decentralized opt-in approach where through being educated, more and more businesses and people are not only understanding what Bitcoin is and the merits thereof, but they're adopting it. And what I predict is that given this small-ish size of the population, and the island, that through voluntary opt-in, we're gonna reach a tipping point At which now in practice, even if the Honduran government hasn't, dictated for it to be, say, legal, in practice, there's enough people accepting it and using it that it will become the de facto, you know, financial system and currency, 'cause, you know, it's both at the same time. And I don't know of any other place that has the dynamic, and especially given that Prospera is here and we're really, empowering and it's, it's a fundamental part of our belief system and what we think makes for a robust governance structure to have, you know, separation between state and money, right? so you have a lot of very interesting dynamics here that I think, unlike anywhere else in the world, create a real potential for Bitcoin to be adopted at scale and for it to demonstrate, you know, how great And the merits of what it has. And I must say, you know, the biggest challenge of Bitcoin adoption, especially, as a primary form of payment, and is the volatility, right? But I'm really excited that there are some innovations recently, such as the stable Sats, where people can hold Bitcoin but also stabilize the price through, you know, what are fairly complex financial instruments, but on the app, it's, it's just a click away, you know? Do you wanna- Hold it, with volatility or do you want to stabilize the price? so I'm really excited, we're exploring that very seriously, with Goloy to see if we can bring that on, and I think that that could be the thing that sparks the difference for mass adoption, because you have all the good things and the benefits of Bitcoin, decentralization, et cetera, without the main downside of volatility, especially for, you know, people that use this as, lower income earners, let's say, and, and it's not like savings here or long-term investments Actual day-to-day in-instrument. So stay tuned and for, for all those of you who are also in Bitcoin maximalists or otherwise, you should come visit and, and raise your hand and let us know how you could help. we are about to launch a city builders network, to really activate our online community. Fractionalize projects and through bounties and other mechanisms enable the wider community that we have throughout the world to really take on either micro projects or at least become aware of some macro projects that they might be able to jump on and, and, and execute. So we're, you know, I hope you visit." }, { "speaker": "stephan", "time": "01:03:39", "start": 3819.28, "text": "Right. And, but I also wanted to just ask about, businesses on the, on the island, are there people accepting Bitcoin now? So, you know, if Bitcoiners wanna go, can they spend Bitcoin? Bitcoin and sort of live on Bitcoin on the island now." }, { "speaker": "erick_brimen_of_prospera", "time": "01:03:53", "start": 3833.89, "text": "Well, thanks to the Bitcoin Center and the work that Dusan is doing, is, you know, it's very feasible because worst case scenario you have through the Bitcoin Center the capacity to even get fiat and cash. Right? So as long as you, you know, you can keep all of your net worth or your wealth in Bitcoin, and worst case scenario, you can go to the ATM, get cash, and pay with fiat cash in places that have not yet onboarded. With, you know, accepting Bitcoin directly. However, an increasing number of businesses are accepting Bitcoin directly, and as I was mentioning earlier, we're exploring the possibility of co-developing a, an app or a wallet with Galloy. that will have stable sets included, and I really, I'm really excited about that because I think it will make the adoption, spread like wildfire, you know? It, it, it deals with the main Point of hesitation for the average, you know, user that might not need to or have the capacity to go deep into, you know, the rabbit hole, they just wanna be able to transfer money easily without much expense, but they also don't want their whatever two hundred, three hundred dollar balance all of a sudden drop in twenty percent or increase in thirty percent, you know, that, that doesn't work. So it, it's quite feasible. we are, our biggest challenge is the build out of the physical Real estate, you know, within the jurisdiction, so we're working, heavily on that." }, { "speaker": "stephan", "time": "01:05:25", "start": 3925.77, "text": "Yeah, and as I, funnily enough, I attended a Free Private Cities meetup, just last night in Dubai here, and, one of the guys I met, mentioned how he had purchased, a small apartment in, in Prospera, and so he was saying it's due to be completed, I think around the middle of the year, he said May or June, I think, I can't remember, but, that's the, I way for that, the growth there, for the Prospera project there, for, you know, for residences and businesses to come up and, I guess, ideally for people to come and set up there." }, { "speaker": "erick_brimen_of_prospera", "time": "01:06:02", "start": 3962.78, "text": "Absolutely. So as you noted, our first residential project, which is a fourteen-story tower, full of apartments, has, eighty-plus apartments, is coming live this summer. but now that we've gotten the first project, then we're solving for a number of things, including, for example, enabling mortgage financing to come into the jurisdiction so that buyers can access mortgages, which isn't readily available in Honduras broadly. But I think that thanks to the Prosper jurisdiction, you know, the foreclosure laws and a number of other things that makes it very secure for a lender to lend and ultimately have real security. Security interest that we're gonna iron a lot of those wrinkles. But for twenty twenty-three, the intention is to scale up quite dramatically the real estate side of things. we already have several projects in the pipeline, about to break ground this year around the same time when Duna Tower One is being completed. we will be soon starting the pre-sale efforts, for example, for Pristine Heights, which is a residential tower next to the beach club of the Pristine Bay Resort, a phenomenal, beautiful location. as I mentioned earlier, these are gonna be higher end units, but it's another pretty big project coming online, we'll be breaking ground on the Bayview pilot, that's the project that, we're doing with Sahadid. waiting on the circular factory to be done, but it should be done in, in April, and, you know, with the rob-robots and digital manufacturing, and I'm really excited about that project in part. Because as we're developing the pilot, but certainly after we're done with it, the beauty of that is how rapidly it can scale and how decentralized The, the planning and the clustering of real estate can become so that technology isn't just about building the buildings themselves, though it is about that digitally and through robotic technology. It's about how groups of people, whether it's family nucleus, extended families, or just communities, can decide to go from just being online, online, to becoming an on land community. So that enabling of going from online community to on land community through the- BellaVoo technology stack, something will be, thrown to the public towards the end of the year, piloting it towards the middle of the year. So, short story or long story short, twenty twenty-three will be characterized by the launch of a number of projects which will massively increase our real estate capacity for people to actually move and live here more permanently. And it's gonna depend a bit obviously on the level of market interest, but we're gonna stand ready to execute according to market demand." }, { "speaker": "stephan", "time": "01:09:00", "start": 4140.18, "text": "And, I guess one other area that's interesting coming back to what we were saying, the idea is hopefully it's a win-win-win, right? That there's opportunities coming and maybe opportunities for Hondurans to earn more than they otherwise would. I'm curious, is that something you're seeing already or something that you can speak to, like opportunities for local people or Hondurans to earn more than they otherwise would be?" }, { "speaker": "erick_brimen_of_prospera", "time": "01:09:23", "start": 4163.78, "text": "Yeah, absolutely. the, the minimum-- so Honduras has a minimum wage and- Although personally I think the policy, the public policy of minimum wages is, has been proven to not be good, and I, I don't agree with it as a principle. as a matter of, let's say, a political reality, Prospera has a standard to not only abide by the rest of the country's minimum wage, but actually has, as a minimum, a ten percent higher than the minimum in Honduras. And depending on how the employer and employee decide to structure their labor contracts, it can be as high as twenty-five percent above minimum wage as a minimum, okay? Why? Because I think that given all the other developments in regulatory and fiscal conditions, all things being equal, a business within Prospera should be far more efficient and profitable, therefore able to of, you know, to pay a higher, you know, wage So that's the sort of policy, it's the minimum is higher than Honduras, but in reality it's actually quite higher, in some cases two times higher. And, and the reason being includes that Companies that otherwise wouldn't be coming to Honduras and are coming from more developed and more productive economies are actually starting to set up here, and initially it's through knowledge work, and they have a bigger arbitrage, right? So we're not competing against other Honduran companies operating in Honduras, and then, you know, do we need to edge them out with five percent more salary? No, these are companies, let's say that are in the US or Europe, they're paying like ten times more in salary sometimes, five times more in salary. So when they come and establish themselves here and recruit professional knowledge workers, they can cut their costs in half and yet they're doubling or tripling what a local Honduran would otherwise be getting paid. So on average, the amount of earnings are substantially higher, than in the rest of Honduras. And then just the volume of jobs that we're creating and that have been creating since COVID, is, I think, a godsend. but in any case, there's also another important policy matter that was not of our doing, but we believe it's, it's, it's right and justified, and it guarantees that Hondurans are in the first line to benefit from jobs that are created, and that is that by law, ninety percent, nine zero percent of employees have to be Hondurans, right? Unless there's a company that is looking for specialized talent and after looking for a Honduran can't find it. The, the first rate of refusal, if you will, for jobs has to be for Hondurans up to ninety percent. So, yes, it's a win-win-win-win-win all the way around. And Honduras as a country, Hondurans as a people, really stand to benefit tremendously from what we're doing, and, and I think it's right and proper, and as it should be, because the enabling conditions that the people of Honduras through their government are enabling for us are extremely valuable, and we are and should be appreciative." }, { "speaker": "stephan", "time": "01:12:31", "start": 4351.01, "text": "Yeah. So I guess in terms of Of summing up our conversation, where I'm seeing it, I obviously I'm ideologically aligned, I'm optimistic about the idea. I haven't been, I probably should come and visit at some point. I, I think it might be interesting to at least come and visit and hang out and see what it's really like for myself. Obviously there is some uncertainty around what's going on with the government and, the ZETA law, but it, it sounds to me like there, there, there's a, a decent, a decently good chance for a, a good Resolution there. so yeah, I guess, do you have any closing thoughts, anything that you want listeners to take away, from this, discussion?" }, { "speaker": "erick_brimen_of_prospera", "time": "01:13:12", "start": 4392.36, "text": "Sure. well, this last point that you mentioned, making reference to uncertainty, it's important. The way I think that buyers of units or, you know, should think about the situation right now, let's say you're considering buying an apartment and you're not sure, hey, is the city gonna still be in place or the Honduran government gonna cancel it, expropriate it? the first thing you need to know is that it will be really hard legally for Honduras to get rid of it. If they do it, it will be extremely costly. But even if they do, the way that things are structured for new investors coming in to buy, let's say, real estate, is that what is being built and at the price at which it's being sold is very competitive in the marketplace, okay? so quote-unquote worst case scenario for a buyer of an apartment, if, if this ever ends up not being the case and this, you know, and two years later, three years later, you're just no longer interested because you would have never bought in Rhode Island anyways, you only did it because the community there would be coalescing and that community ends up moving somewhere else, it's a, it's an asset, it's an asset on a beautiful island That is on, tipping point in its development curve where not just the prices are going up, but the level of, of volume that's coming and therefore the investments as a whole is increasing. So we have fantastic tailwinds in our favor just from a traditional, let's say, real estate perspective. So in actuality, there's, there's relatively little downside risk for people coming on board now. now we as Prospera have a lot of risk because our business model is different than that of, an apartment buyer, right? You know, we have relied on a fifty-year stability and our business model revolves around, you know, being successful for, for decades, but that's our problem, given our commitment to the vision. Our shareholders are determined to keep pushing, right? Legally, and as long as it's allowed, we'll continue to develop. And again, worst case scenario, you know, you have a, a valuable real estate asset on an island that's fantastic and getting better. and then the last thing I would say, especially to your listeners, is that, we're always looking to better integrate, Bitcoin into what we're doing, you know? Crypto in general, but I know that there's a huge world out there of non Bitcoin crypto which lends itself for all sorts of problems and, and fiascos and, and so we're very s-skeptical and careful about everything that's not Bitcoin. There are some particular use cases that might make sense. But what I want the listeners to know is that we want and need the participation of as many community members as possible. we are not running a centralized operation by design, and therefore, those that are most involved are gonna have the greatest impact in determining the future of how things are done on the ground. So if you understand that because of what we're doing, there's great potential to do things that otherwise wouldn't be possible, and you want those things to turn out a certain way The best, if not only way to ensure that's the case is to be involved. So please join, let your voice be heard, and beyond just talking, let's build it together." }, { "speaker": "stephan", "time": "01:16:48", "start": 4608.35, "text": "Fantastic. Well, I think that's a good spot to finish up. So, Erick, where can people find you online if they wanna follow you?" }, { "speaker": "erick_brimen_of_prospera", "time": "01:16:53", "start": 4613.24, "text": "Well, I'm on Twitter. I don't tweet much, but I do, you know, pay attention to direct mentions of me and messages. So that's probably the best way to do it, you know, otherwise if you are quite in involved within our online community, you know, our team is hands on and anything that needs to be bubbled up to me eventually does." }, { "speaker": "stephan", "time": "01:17:14", "start": 4634.39, "text": "Okay, great. Well, I'll put all the links in the show notes and, thanks and hope to chat again soon. Thanks, Eric. Thank you very much. So, what do you think about free private cities and privatized governance? Do you like the idea? Make sure to share the show out there with your family and friends and get the show notes at stephanlivera dot com. Thanks for listening and I'll see you in the cit" } ] }