The Hidden Globe

Abrahamian covers the idea of “charter cities,” both as proposed by economist Paul Romer and as adopted by Silicon Valley investors. Romer conceptualizes a “charter city” as “a territory located in one state that operates under another state’s rules, or charter” (113). This idea was particularly widely discussed in the 2000s and 2010s, but it was never implemented anywhere. When Silicon Valley libertarians picked up the idea, they amended it to propose chartered territories in other countries run by private interests like a corporation. In the 2010s, a group of Silicon Valley libertarians founded one such territory called Próspera on the island of Roatán in Honduras. Próspera is entirely under the jurisdiction of a private company. Many colorful figures, such as Patri Friedman, who promotes “the development of artificial, floating nation-states on the high seas” (116), are involved in the project. Although Próspera seems to have had mixed to little success, Abrahamian argues that its existence is a sign that there will be more “charter cities” created in the future.

Abrahamian summarizes Romer’s ideas for charter cities and the common critiques. Romer states that countries with “better rules” should be allowed to operate in places with “bad rules” to create prosperity. Critics accuse Romer of advocating for a new form of colonial exploitation. However, Romer and Abrahamian point to examples in China for how this model can be successful. For instance, part of Hong Kong’s success as a financial capital is due to its use of British legal systems within the Chinese sphere. Shenzhen, a free trade city in China, is similar: Abrahamian agrees with Romer that “no gunboats or unequal treaties compelled the People’s Republic of China to build [Shenzhen]. The pressures were internal” (122). Romer also argues that charter cities could be used to mitigate the migrant crisis: An underpopulated area in one country could be governed by another country and welcome migrants from elsewhere. Romer argues that these places should not have democratic governance. The benefit of such an area, rather than a typical refugee camp, is that it would provide employment opportunities to migrants.

Although Abrahamian does not agree with all of Romer’s ideas, she argues that they represent a creative way to address the limitations of the current nation-state system. She notes that it would be better than current Western nationalist migrant policies, which include offshore island prisons and violent pushbacks. The idea of using charter cities to manage migrant and refugee crises is not new. A similar idea, referred to as the human freeport, was proposed by Jewish and other activists in the United States during World War II as a way to save Jewish refugees from the Axis powers without upsetting domestic nationalist and antisemitic bigots. This was implemented in a small way when 982 refugees were housed in Fort Ontario, New York, in a special jurisdiction. Abrahamian supports open borders, but in the absence of political support for this idea, a charter city could provide an alternative.

The Dubai International Finance Center (DIFC) is a free trade zone with its own court system. In 2004, the president of the United Arab Emirates, Sheikh Zayed bin Sultan Al Nahyan, reformed the state’s constitution to allow for the creation of free zones for financial assets. The ruler of Dubai, Sheikh Maktoum bin Rashid Al Maktoum, subsequently created the DIFC as one such free zone. To differentiate the zone from others around the world, Dubai developed a court system “to oversee civil and commercial matters within the zone” (136). The court’s officers as well as its claimants need not be from Dubai. The idea was to provide a sense of legal stability within a court system more closely aligned with international legal standards for business, rather than the Islamic law that was the bedrock of typical UAE courts.

Englishman Mark Beer, an in-house lawyer for Mastercard in Dubai, was tapped to oversee the day-to-day creation and implementation of the DIFC courts as its first chief justice, and later registrar. In an interview with Abrahamian, Beer described the legal system as a “tool for economic development” (139). He saw the DIFC as a global jurisdiction for anyone looking to arbitrate civil disputes.

During the 2008 financial crash, the Dubai sovereign wealth fund, Dubai World, found itself unable to service its debts. The DIFC established an insolvency tribunal to oversee the bankruptcy proceedings. Its rulings were seen as fair by the business community, which gave the court greater legitimacy. In 2011, the DIFC opened its court system to any party, even those not located in the DIFC zone itself. In 2016, the DIFC’s jurisdiction was contested when a large piece of cladding fell onto a walkway within the DIFC. The DIFC sued the building firm, controversially taking the case to Dubai’s regular courts rather than to the DIFC’s own court system. Eventually, it was resolved that the claim had to be litigated in DIFC courts. This established the legal precedent that there “was not one but two Dubais” (144).

Abrahamian critiques the DIFC court because it is a separate court system only for the wealthy. The migrant workers and other low-income people who make up the majority of Dubai’s population do not benefit from it. She also argues that the court sets a dangerous precedent of transforming law into a commodity that can be imported from elsewhere to appease foreign investors and companies. Law is no longer tied to a nation-state’s territory and jurisdiction. Courts similar to the DIFC have since been established in other countries, including Iraq, the Netherlands, and Benin.

In 2015, Mark Beer went to Kazakhstan to create the Astana International Financial Center (AIFC) based on the DIFC model. Kazakhstan’s President Nursultan Nazarbayev was attempting to integrate the petrostate into the international economy and wanted to attract foreign investment and trade. In 2018, the AIFC was launched. Meanwhile, Kazakhstan was facing increasing internal unrest due to extreme income inequality (“just 162 people held 50 percent of the country’s wealth in 2019” [149]). Much of that wealth was held by the president and his family through shell companies and in offshore bank accounts. In 2022, Nazarbayev stepped down. The new president, Kassym-Jomart Tokayev, violently put down protests. Abrahamian argues that the DIFC model allows authoritarian regimes to create legitimacy while obscuring human rights abuses. In an interview, Beer retorts that his work with the DIFC and AIFC helped liberalize and improve the authoritarian regimes.

In 2017, Beer was replaced at the AIFC by an Emirati, Amna Al Owais. She oversaw the creation of a tribunal, made up of DIFC and onshore judges, that adjudicates in which jurisdiction claims should be heard to forestall complaints about the DIFC usurping Dubai legal jurisdiction.

Meanwhile, Beer has become interested in Asgard, a project to ostensibly establish a nation in outer space. Beer and the other Asgardians see themselves as pushing the frontier of notions of nation, jurisdiction, and law.