Atossa Araxia Abrahamian on charter cities, free ports, and the hidden corners of the global economy

There are holes in the map of the world we all know. The globe may be divided into 193 or so units we call countries, but they don’t tell the full story. Headlines around the world make that obvious. Countries like Italy are sending migrants to developing countries like Albania to process their asylum claims. Russia is using “flags of convenience” from countries like Gabon to ship oil around the world, defying international sanctions. From Gaza to Taiwan, unresolved territorial status are at the heart of some of the world’s most dangerous conflicts.

The world’s gray areas are journalist Atossa Araxia Abrahamian’s specialty. Her first book, The Cosmopolites, explored the global market for citizenship and passports. Her latest, the newly released The Hidden Globe: How Wealth Hacks the World, documents the myriad ways special zones and territorial ambiguity enable global capitalism.

Abrahamian charts the evolution of Switzerland, the country where she grew up, from a pioneer of mercenary warfare to the invention of modern tax havens and secret bank accounts. She looks at the role that “free ports” — hidden facilities that made a high-profile appearance in Christopher Nolan’s time travel movie Tenet — play in the global high-end art market. She reveals the surprisingly prominent role Luxembourg is playing in the commercialization of outer space.

And Abrahamian examines the growth of “charter cities” — a dream embraced by Silicon Valley billionaires who want to create Hong Kong-inspired special zones throughout the world with their own laws and regulations, outside the direct control of the countries where they’re based. Próspera in Honduras is the best known of these, and the idea’s influence can be seen in Donald Trump’s pledge to build futuristic “freedom cities” if elected. Abrahamian doesn’t share the politics of charter cities’ most ardent backers, but she doesn’t entirely dismiss them either; she sees potential for the concept in a world with more and more closed borders.

Abrahamian recently sat down with Vox over Zoom to discuss her new book, how growing up in an international enclave like Geneva helped shape her approach to journalism, and what the world can learn from a sparsely populated archipelago in the Arctic.

This conversation has been edited for length and clarity.

Joshua Keating

One thing that I thought I understood about national governments, generally speaking, is that they tend not to surrender territory, or surrender their sovereignty, without a fight. More than a few wars have been fought over that! So, a big question I had while reading your book was why so many countries have decided to trade away bits of their sovereignty.

Atossa Araxia Abrahamian

They would contend that they haven’t signed away pieces of their sovereignty, and I think that’s correct. At the end of the day, national governments have the power to control everything that happens in special economic zones or in free ports.

When you’re talking about some of these slightly more ambiguous territories like Boten [a Chinese-dominated special economic zone] on the border of Laos and China, the question is less “does the government have control?” and more “which government has control?” But, in a heartbeat, governments could intervene and shut these things down.

The thing is, it’s not in their interest to do that a lot of the time, or they don’t perceive it to be in their interest because of the economic promises that come with these types of jurisdictions. Sometimes those promises are true. Sometimes the economic benefits are not particularly clear. I think that the vast majority of export processing zones or special economic zones help the corporations that are working in them for a few years because they get a tax break. But beyond that, it’s not entirely clear that they have a massive benefit for the countries that host them.

But the question of sovereignty is an interesting one. It’s not a complete capitulation. It’s more that there are degrees of sovereignty, and different types of sovereignty, and different areas in which the state wields power, and sometimes they choose selectively not to.

Joshua Keating

A lot of the book was surprisingly personal. How do you think growing up in Switzerland influenced your views on this topic?

Atossa Araxia Abrahamian

I did grow up in Switzerland, in Geneva. But I never really felt like I was in Switzerland proper because I was living in an enclave full of international people and expats. I never felt fully Swiss. That’s partly because of school; we didn’t really learn much about Switzerland. But it’s also part of the way that these communities are structured. When people are moving every few years for their jobs, whether they’re a Procter & Gamble lawyer or a World Bank person or a WHO official, there isn’t really a sense of permanence and rootedness in the community.

Joshua Keating

When it comes to charter cities like Próspera, it seems like people’s views on them map pretty neatly onto their overall politics. They’re either these neocolonial impositions or the cities of the future. But it seems like your views on them are a little more nuanced.

Atossa Araxia Abrahamian

I think these special economic zones are going to eventually evolve to be used in ways that aren’t just factories or economic incentives for companies. They have the potential to be places for people to live who can’t live in the country — refugees and migrants, essentially.

That’s born out of some pretty ugly impulses: not wanting to let people in, having much stronger borders. I think it would be great to have a more permissive immigration regime, but in the absence of the political will to make that happen, I think there’s something to the idea of thinking about establishing places where anyone can just live, where anyone can show up and have a safe place to live and have a job.

What I realized when I was reporting this book is that there isn’t anywhere in the world where someone can just show up and live without having to have permits and visas. That was kind of shocking. There just aren’t any free zones for people. If the charter city concept is deployed in that way, as a halfway place for people to go when they’re being bombed or when they’re trying to escape a disease or famine or what have you, there might be something to that.

It’s not a perfect solution, and I’m really ambivalent because I prefer to see more welcoming, inclusive policies at the national level. But I guess over the years, I’ve become a little bit cynical and hopeless about that ever actually happening.

Joshua Keating

One of the people you interview in the book is Patri Friedman, the grandson of Milton Friedman and a big booster of seasteading and charter cities. And he’s obviously a libertarian, but I was reminded of something he once told me in an interview that there’s no reason only libertarians have to live in these places. There’s no reason there couldn’t be a socialist charter city or an anarchist charter city or whatever.

Atossa Araxia Abrahamian

Yeah, a morally consistent and intellectually honest libertarian would say that. Now they also get very upset when you criticize Próspera, and dismiss criticism as socialist, leftist, totalitarian. But yes, I agree, in theory, there should be room for other types of politics.

I was really agonizing over how to write about this. How can I acknowledge that there might be something in an idea without endorsing the way that it’s been happening? I talked to Paul Romer [the American economist who developed and popularized the idea of charter cities but has since distanced himself from projects like Próspera] about this. It was his idea at first. And I was surprised at how much I agreed with him.

Joshua Keating

Romer’s comments were interesting because he basically said it had never occurred to him that people would see charter cities as a neocolonialist project. That’s surprising when they’re explicitly talking about replicating places like Hong Kong and Puerto Rico.

A lot of advocates for special economic zones also point to Shenzhen, the city in southern China where such a region was established in the 1980s when the Chinese government was experimenting with capitalism and free enterprise. Or at least, that’s the story you hear. You see the story as a little more complicated than that.

Atossa Araxia Abrahamian

Yeah, I started noticing when I was reading about places like Dubai, like Shenzhen, like Singapore, that there’s a really consistent narrative you hear: It’s that this used to be a fishing village — always a fishing village for some reason — and then a great, strong man leader comes in and brings capitalism to its shores, and all of a sudden, through the magic of low taxes and pro-business policies and minimal red tape, it transforms into a glittering metropolis.

If you look at pictures of Singapore and Dubai and Shenzhen, 100 years apart, yes, there’s a really marked transformation in the way that these places look. But these policies are not just top down. In the case of Shenzhen, it was always a border city. It was always a place where there were smugglers and people crossing over to Hong Kong and coming back. So this idea that it was just a top-down decision by the government that “we will have more industry” is wrong because it was also a bottom up. Local leaders were inspired by the local practices. These places tend to be a lot more rich and complex and anthropologically interesting than the narrative that we hear from the boosters.

Joshua Keating

When it comes to outer space, this is really a new area for governance. In the book, you talk about how Luxembourg, of all places, has emerged as a leading jurisdiction for the chartering of new space ventures. How do you see the governance of space and the debate over space governance evolving as orbital space gets more crowded and things like asteroid mining get more realistic? Are we just going to see existing nation-states on Earth planting flags in space, or will companies and private entities be taking the lead?

Atossa Araxia Abrahamian

NASA has really gone full in on the public-private partnerships model. It’s really keen on bringing in private actors, and there is a growing number of space startups that are doing everything from rocket launches to moon rovers that collect samples and run experiments. Space exploration is facilitated by the public sector, but on the micro level, it’s managed by individual companies, sometimes very small ones.

I don’t think that the state is going to go away in space. Government space agencies are still the ones with the capacity to really get things off the ground, no pun intended, and cooperate with each other. There was recently the Artemis Accords, which is this framework for doing research and conducting operations on the moon. So I think there’ll be a bit of both. Governments on Earth are the ones that will ultimately recognize companies’ property claims.

Joshua Keating

You end the book in Svalbard, an archipelago in the Arctic that’s sort of part of Norway, but sort of not. What was it about Svalbard that sort of seemed to give you some hope about the world?

Atossa Araxia Abrahamian

Sort of. Svalbard is a place that’s a part of Norway, but is governed by some 100-year-old treaties that stipulate anyone can live there and anyone can open a business there. So it is, in a sense, this free market dream: open borders, open business. There’s a lot of natural beauty, and it’s also got a ton of environmental regulations, so it’s not lawless by any means. It’s not a free exploitation zone or free trade zone, but it is a rare place that allows anyone to live there.

Initially, I assumed that this must have been a byproduct of warm and fuzzy interwar internationalism. And boy, was I wrong. I went through the archives of John Munro Longyear, who was a big man about town in Svalbard in the early 20th century. Looking through the archives, I realized that the reason that Svalbard got this way, the reason that it has this strange provision, is less that the countries of the world wanted the Arctic to be for everyone, and more that this CEO/entrepreneur was concerned about his property rights.

Until the Treaty of Versailles, Svalbard was terra nullius; it was unclaimed. After the war, it was given to Norway. And while this handover was happening, John Munro Longyear was really worried that everything that he’d built there, all these coal mines, would be taken away by pesky Norwegian socialists. So it was actually him and his lawyers who were lobbying for a much freer and more open system, and almost by accident, we ended up with this.

Is that replicable? I don’t know. But what it tells me, in a more hopeful way, is that sometimes you end up with these jurisdictional arrangements that came out of some maybe cynical or self-interested lobbying but wind up being pretty good.

Maybe we should be looking for those cracks and trying to break those types of possibilities open. It is really hard to start new countries. Seasteading and space countries are great thought experiments, but probably not happening. So, if we want to do something in our lifetime that creates more space for more types of people to live in more types of places, maybe that’s the way to go. I don’t think it’s the only solution, but it’s definitely something to consider.

Source: vox.com