Our guest today is Joachim Rücker, who currently serves as a key partner in the Sustainable Development Zone Alliance. Preceded by a varied and fascinating career, Joachim served as a special representative of the United Nations Secretary-General for Kosovo for the duration of its transition to independence and was responsible for its economic reconstruction. He was also the Mayor of a German Industrial City, called Sindelfingen for almost ten years, and has been stationed abroad on numerous occasions with the German Foreign Service in various countries, particularly in Africa. Joachim describes how it all came together in 2017 and 2018 when their company decided to pursue making a positive global impact in migration, humanitarian, and development policies. In our conversation, we discuss Joachim’s work with the Sustainable Development Zone Alliance and how they are utilizing Sustainable Development Zones (SDZs) and Brownfield sites to improve the lives of migrants and increase the transitions from the informal sector to the formal sector. Joachim outlines three key points when considering their new paradigm around integration in cities and the importance of offering integration options for migrants. Find out why it’s important to have an administrative framework in SDZs that exists asa separate entity to the central government, and Joachim explains the importance of collaborating with the local government and grassroots organizations, citing a successful example in Libya when working with local government, even though the central government was fragile and heavily compromised. Finally, we talk about Joachim’s time in Kosovo and how h esees SDZs playing out in the next 20 years. All this and much more. We hope you’ll join us!
Key Points From This Episode:
● An outline of SDZs and how they resemble charter cities.
● How the Sustainable Development Zones Alliance is working to support cities during a huge increase in urbanization.
● The challenges of moving people out of the informal sector.
● Why SDZs are helpful tools in moving people out of the informal sector.
● Their use of elements from special administrative and legal frameworks to solve problems.
● Three key points when considering Joachim’s new paradigm around integration in cities.
● Firstly, hear about the importance of avoiding the ‘objects of care’ trap.
● Secondly, Joachim shares why it’s so important for migrants to have a connection with urban developments.
● Lastly, he highlights the necessity of a special legal framework outside of the original city.
● Why migrants are unlikely to return to places where they were violently oppressed.
● The importance of offering local integration options.
● How SDZs determine which sectors of the population to focus on.
● How to go about determining the administration for a particular SDZ.
● The governance authority that SDZs need to be successful.
● What SDZs might look like in 20 years and how they could resemble other decentralized innovations.
● Being in contact with both local government and grassroots movements and organizations when setting up an SDZ.
● Working with local leaders when the central government is fragile, as it is in Libya.
● Why SDZs require donors and investors and how to get them involved.
● Why Joachim doesn’t anticipate hiring problems when countries often have more qualified individuals than jobs available.
● Why a multilateral organization like the UN should be involved in SDZs in a supervisory role.
● The lessons that Joachim draws from Paul Rohmer, the Jordan Compact, and the unfortunate perception of charter cities as neocolonial.
● Joachim talks about his time in Kosovo and the lessons he learned.
● Why Joachim and his team have chosen to pursue Brownfield sites for SDZs and how it informs their broader strategy.
Mark: Hello and welcome to the Charter Cities Podcast. I’m your host, Mark Lutter, the Founder and Executive Director of the Charter Cities Institute. On the Charter Cities Podcast, we illuminate the various aspects of building a charter city, from governance to urban planning, politics to finance. We hope listeners to The Charter Cities Podcast will come away with a deep understanding of charter cities, as well as the steps necessary to build them.
You can subscribe and learn more about charter cities at chartercitiesinstitute.org, follow us on social media, @cci.city on Twitter and Charter Cities Institute on Facebook. Thank you for listening.
Our guest today is Joachim Rücker, who was the President of the United Nations Human Rights Council. He was a special representative of the United Nations Secretary General for Kosovo during the transition of Kosovo to an independent country. He was the Mayor of a German Industrial City. He is currently a key partner in the Sustainable Development Zone Alliance.
Mark: Welcome to the show, Joachim.
Joachim: It is to good be here. Thank you for inviting.
Mark: Yeah. So, I think you’ve had a very interesting career working as a Mayor, working on kind of helping Kosovo achieve independence and working at UNHCR, and now working on Special Development Zones. So, can you just put give us a run through on these various stages in your career and how they pulled together with your work on special development zones today?
Joachim: Well, it’s true, I have this background in a city. I’ve been elected mayor in a German Industrial City, called Sindelfingen south of Stuttgart, claim to fame of Sindelfingen is probably that it has the largest Mercedes factory worldwide. So, it’s actually the cradle of all the S classes and B classes and other things you hopefully drive, unless you drive a Tesla.
Mark: I am proudly a no car owner.
Joachim: Actually, I drive a Tesla, but when I purchased it in 2014, my Model S, Daimler owned actually 10% of Tesla. So, I thought it was not any any high treason in that. Coming back to more serious business. Yeah, that was my time as a mayor. So of course, I am rooted, let’s say in local politics, and my motto is also all politics and businesses local. I think that’s a very important motto, and it sort of pre-influenced what I did later, when I went into international politics and joined the UN.
You mentioned some of the functions I had, one was that I was the Deputy Special Representative of the Secretary General in Kosovo responsible for economic reconstruction of an economy that was in pretty bad shape, when I took over. Later, I became the Special Representative of the Secretary General in Kosovo and head of the UN interim administration, in what was at the time, a territory. Now, of course, it’s an independent country and that was also a very interesting period of my life.
Then I have never joined UNHCR, so that’s a mistake. But I was with the UN, as the German UN ambassador in Geneva and as the President of the UN Human Rights Council, inter alia, I’ve done other things, but that basically forms as you can probably deduce a background sort of with urban development, and with sort of the UN humanitarian side of development. I’ve been also stationed, of course, with the German Foreign Service, in some countries in Africa and other countries.
That’s another part of my career. But it came all together when we decided in 2017, 2018, to actually make a difference with regard to migration policies, and with regard to the humanitarian and development policies that we saw, sort of with some flaws.
Mark: Great. So, let’s talk a little bit about that. You proposed special development zones, which in my mind are similar to charter cities, but not exactly the same. So, what is that proposal? What progress have you made on that? What progress still needs to be made? If you think about that.
Joachim: Yeah, I mean, we that is the Sustainable Development Zones Alliance come from different backgrounds, NGOs, consultants, et cetera. But we have one goal that is making the repercussions of forced migration and rapid urbanization more bearable. So, we come from that angle from the rapid urbanization and forced migration angle. As we all know that urbanization is one of the pressing problems of our time, now over 50% of course, as you know, of the world’s population living in cities and big cities. Very soon it will be like 75%, 90% of that is happening in Africa and Asia. I think it puts the cities into a very difficult position to deal with these challenges. Because usually this is where, as you know, the hundreds of millions of people who have left their homes will “land” in the outskirts of bigger cities. What we see and have, of course, also researched and seen in practice in our vast practical experience in our professional lives, is that those people will mostly land in the informal sector, in the informal sector of not only the economy, but also of the society.
We have been thinking what is a means of bringing people out of the informal sector, when it comes to ID, when it comes to housing, land use in general, when it comes to jobs to micro and smaller businesses, when it comes to employment in general, all these things are not really possible to master in the informal sector. So, we need to bring people out of the informal sector into the formal sector. And SDZ is the concept that we have developed is one means of doing that.
Mark: What is sdz?
Joachim: SDZ, we call it a Sustainable Development Zone. So, it uses some of the elements of special administrative and legal framework to solve problems. So, we consider ourselves as vanguard of what people call the SDZ plus movement where you use the basic concept of Special Economic Zone, that you have a special legal administrative framework that is apart from the rest of the country, and you use it to achieve certain purposes that was usually in the case and still is, and with all the good reasons. In the case of the SDZ’s, of course, attracting foreign investment and creating employment, et cetera.
With regard to the challenges we have been focusing on, it is a means of solving integration, and of course, also achieving economic growth, employment, et cetera. But that’s the basic focus of achieving integration in Brownfield and Greenfield developments, usually in the outskirts of bigger cities, where you have all these problems with people remaining stuck in the informal sector. We have thought that if you enter into this new paradigm that you need a certain special legal and administrative framework to solve certain problems, then you need to remember three things, game changing meta topics, that would help you to come to the right conclusions.
The first is that people in a vulnerable position in the informal sector need to be treated not as objects of care, but as subjects of their own development, as consumers, as potential producers, so they need to be taken seriously and have to come out of the objects of care trap. The second thing is that these people need to be effectively connected with their urban surroundings, for mutual benefit, because the core population that has been there before will benefit from the new commerce and from the influx of new people also economically, and vice versa. So, they have to be connected with their urban environment.
The third thing is that to achieve one in two, you need, and this is the conclusion we have come to, and then we have formed it to a concept is that you need a special legal and administrative framework, because the alternative would be to do everything through the existing cities. Now, having been a mayor for almost a decade. I know, I think fairly well what an existing city can do also in some of the developing countries, what are the limits? What are the possibilities? But also, what are the limits.
I think it would help a lot if you could introduce the idea of the special legal and administrative framework to the challenges, we are facing in especially global south big cities. And this is what the idea of the SDZs are all about, bringing people out of the informal sector into the formal sector, through this special framework, connecting them to their urban surroundings. Since we have grown out of the former refugee cities movement, of course, this goes vice versa. If you look at an isolated camp, ideally run by an international humanitarian organization, like for example UNHCR. Then, of course, the same goes. People should be perceived as not objects of care, but as subjects of their own destiny. They should be connected with their urban surroundings somehow, or the surroundings should be connected with maybe a remote camp, and there needs to be a special legal and administrative framework. That’s the basic idea.
Now, some people ask, why do you propagate local integration also for new migrants that come into the big cities? Why don’t you ever think about – this is the questions we’re being asked when we have discussions, debates, public debates, why don’t you ever think about return? And why don’t you think about return in the sense of repatriation, or the acceptance of refugees in let’s say, for example, or migrants in the countries of the global north?
Well, the thing is, those two options are fine in principle, and in some cases, they can apply. However, in the huge majority of cases, they’re not an option. People will not return to places where they have been forcibly suppressed through a violation of human rights, be it political rights, or be it social economic rights. They will not go back if they have only “come” for better livelihoods. They came to stay in the cities. That is the empirical experience. So, you need to offer local integration options. And this is what the Sustainable Development Zones idea, and concept is all about.
Mark: So, a Special Development Zone, in effect creates this new legal administrative framework that allows for rural to urban migrants and potentially people who are living in cities to then embrace the formal economy, benefit from the global economy, and begin to put themselves on a higher path of production. So, what does this actually look like in practice in terms of setting up this special administrative region, in terms of buying from the government of how much land are you looking at? What kind of population are you looking at? How do you think about the industry sectors that would be in that area?
Joachim: Yes, we call it Sustainable Development Zone, not Special Development Zone.
Mark: Sorry, sustainable.
Joachim: That was in the beginning, but we call it Sustainable Development Zone to make very clear that this is a local application of the UN Sustainable Development Goals, especially goal 8 and 11, about cities and about economic growth and prosperity. What we have defined in our concept, and what we’re now looking at with regard to pilots, the first pilot, is Brownfield and Greenfield development combined. So, we would usually look at, let’s say, a 500 hectare plus minus zone that, of course, has some established Brownfield development already maybe including smaller or even bigger businesses, and a formal sector, but also would include the vulnerable groups that we’re talking about, which can be refugees, which can be IDPs, which can be other vulnerable groups. Basically, people living in the informal sector, and not being able to exit that informal sector in any way, being stuck.
That’s the group we try to integrate into the formal sector. As I said, we’re actually looking at 500 hectares plus minus, but that’s one figure we’re looking at right now, when we talk to the government of Ethiopia about the pilot or more than one. And as I said, this would be Brownfield. But there would also be an option that there is Greenfield development, so adjacent land should be available.
Mark: Who is that the governing figure in the SDZ? Would this be appointed by the government of the host country? By the UN? By some combination? How would you actually set up a special administrative government, I guess?
Joachim: Yeah, we have a defined design of the government, which would be an SDZ Development Company that would also sort of raise the capital for developing because one of the most important thing is that you have a concession or some other form of agreement with the government or the government leaders, that you can use the land differently than with regard to the rest of the country. Because of course, the added value comes from the development of the area, it comes from the land, and we would set up this SDZ development company and government layers, but also formal sector residents and of course, capital givers, would be shareholders in that SDZ development company. Then you would have an SDZ administration with strict oversight and also appeal mechanisms with regard to decisions of that SDZ administration. Oversight would come from a board that would again comprise a government layers from the respective country. It would comprise the UN country teams and representation. It would comprise other stakeholders, especially also from civil society, from local civil society and possibly from civil society in the respective countries.
We come very much from a civil society angle in the whole history of our concept, and when you look at the people who are involved, we, of course, are very keen. They’re not to be seen in what went wrong with the charter cities idea, that it is something that is a revelation from the north to the global south, and that is sort of a standard operation. Not at all. I think what we’re trying to do is that there needs to be 100% local ownership, including the stakeholders from the vulnerable groups and that is represented in the way that the governance of the SDZ would work.
Mark: What do you see as the key, maybe concessions or governance authority that the SDZ should have that should make it successful? Are these things like labor law dispute resolution? Is this registration? What do you see as these key layers that you want to embed within the SDZ to have a competitive environment?
Joachim: Well, it would certainly be sort of the rules for land use, as I’ve said, but you’ll find that in many countries, you already have, of course, special economic zone laws, which allow a different land use, which you can actually build upon. And then of course, you should, basically when it comes to things like dispute settlement, and maybe even security issues. It’s basically a menu, whether you do that with existing institutions in the country, or whether you would think you have to set up something that would resemble it for the SDZ itself.
Mark: When you’re thinking about these 500-hectare areas, are you thinking about scaling them up? After you get the pilot project go in, would you want to do 1,000 hectares, 5,000 hectares, or do you see the 500-hectare model as the ideal model?
Joachim: No, as all projects, I think an SDZ can scale up and that would be always part of the of the design. Ideally, as I said, it’s usually a Brownfield development because we’re focusing on people, but there should be adjacent land available, and you should actually look at scaling it up.
Mark: Fast forward 15, 20 years in the future, let’s say you’re entirely successful, execute on it really well, what does that future look like? How do SDZs then impact the world? The conversations that are happening? How’s the future different with that success?
Joachim: Well, I think what’s very important to understand, conceptually, is I think that this is an innovation in local administration, in decentralized local administration. And in this way, it resembled similar decentralized innovations, like in the fields of telecommunication, or in the field of renewable energies, or smart cities. In some ways, it’s even compatible or very much compatible, because it’s a decentralized innovation, with regard to administration. It goes together very well with other decentralized innovations. So, it can be a model for innovation in local governance.
Mark: Great. How have your conversations been with getting governments to buy into this concept? One of the challenges we’ve had with charter cities and the return to a previous thread, we see ourselves as I guess, a little bit different from Paul Romer’s model of charter cities where we do advocate a public private partnership between a developer and the host country to align the development with national plans, not having a high income country come into a low income country, but structuring it as a public private partnership instead.
When we work with new city developments on the ground, we tend to work with new city developments that are being led by people from those respective countries who have that domain specific knowledge that us working in the US don’t always have. One of the criticisms we frequently get is why would countries decentralize authority on this margin? Governments like their authority, so they often are reluctant to give it up. So, how do you see that working within the SDZ model? And how is your conversation so far proceeded with getting governments to buy into that degree of decentralization?
Joachim: Well, as I think I’ve said, or we have alluded to, we don’t have a pilot project yet, but we are about to create them and we are advancing. However, of course, you have to be in close touch not only with central governments in the respective countries, but also with regard to local government and with regard to the grassroot movements and people. Otherwise, I think you will not be able to achieve anything. So, local stakeholders are extremely important in getting this implemented.
However, I think many countries already have SEZ, special economic zone legislation. So, what we usually do is that we say there is a similarity to a special economic zone, in the sense that, yes, we do need somewhat different framework in legal terms for this legal and administrative area that is set aside from the rest of the country, and we need to do X, Y, Z in order to create the SDZ.
Usually, we have had quite good reactions in the countries that we have had talks. People understanding the idea and actually accepting the logic, as long as you do it with the local stakeholders. I think a huge mistake would be that you talk to a central government, before you even sort of tentatively have talked to the perspective, or any perspective local stakeholders. In some countries, which are fragile, in their political setup, we have actually worked with mayors like in Libya, where we have had very good plans and project developed together with mayors who said, even if we have a fragile central government, all the more we would like to work with you and have something like an SDZ on the local level.
Mark: So, in addition to the local and the national stakeholders, what other stakeholders do you see as key to the success of SDZs? I assume you also need investors, maybe experts to help administer the SDZ. But how have those reactions been and who do you think are on a granular level, those key stakeholders you engage with?
Joachim: You of course, need people to finance the idea. By people, I mean, donors. I mean, lenders and I mean investors, because we foresee a mixed financing with different layers for investors. You might have CSR investment, but you also might have a reasonable return on your capital for certain investors. So, if you have a mixed layer of financing, then I think we would have the right group investor wise. Of course, we’re targeting investors as we speak. Currently, we are looking at at least one project in Ethiopia where we would like to have financing. This is the stakeholders that are actually necessary, the local stakeholders, from the affected population, from civil society, from government, the central layer, central government, central civil society. Of course, you need potential investors
Of course, you already have some economic investment already when you’re able to – at least on the micro and small enterprises level, if you’re able to formalize certain informal activities. This would, of course, be very advantageous if you get international investors as well, like you would get in a special economic zone. So, we’re targeting these as well.
Mark: Great, and how do you think about training the administrators of these SDZs? So, for example, we’re at the Charter Cities Institute, we’re engaged in several new city developments, they don’t have the degree of legal autonomy that we would necessarily like, but one of these questions we’re running into is who administers the zone on a practical level? So, for example, in Nigeria, one of the projects we are working with is within economic city, they have 10,000 hectares. Their target population is 1.5 million residents. So, it’s a city about the size physically of San Francisco when complete, at least with their current population, twice the number of residents.
One of the questions is, who is the, I guess, kind of administrative class in this city? You probably don’t necessarily want to hire from a Nigerian government, because the Nigerian government tends to not be very effective. So, the entire point of creating a separate jurisdiction is to escape some of the bureaucratic challenges that are in Nigeria as a whole are kind of guests as you can probably hire 20% or so of Nigerian expats, of Nigerians living in the US or in the UK, who wants to go back to their communities, and want to give back, who have that relatively high level of education. But then that still leaves a lot of positions where it’s not exactly clear how you fill them. And so, at the Charter Cities Institute, what we’ve been doing and thinking about is partnering with universities, for example, the Africans who have economics, to set up masters in city administrations, to start training people who would be able to take over some of these roles and prove effective administering these new city developments.
I’m just wondering, okay, you have a pilot project in Ethiopia, when you think about who actually forms the administrative rules for the SDZ, what populations, who are you thinking of hiring from? And then two, as you’re able to scale up, is that population tool will be able to scale up with you in terms of talent to reach the impact that you want to reach?
Joachim: I mean, I agree that you can probably hire competent people, because I think what you find in many countries, and we found it in Libya, in particular, is that you have almost an overshoot of well-educated people, including administration. You certainly don’t have enough possibility to apply the acquired knowledge. So, I’m not really that concerned and you have to go to the market for potential. But there is a market and there is – I think, in many countries, you have actually more educated people than you have jobs. So, I think it should not be a big problem.
Of course, we have people who have done mayoring themselves, or have been mayors who have been administrators in our team. So, whatever is needed, I think we can also communicate, so plus.
Mark: Great. How do you see, you said, for example, that you see UN officials serving on the administrative board of the SDZs, and you have experience working in the UN, so have you seen engagement from the UN and other of these multilaterals in their support, and their level of interest and in SDZs? And how you’re able to kind of apply that support and interest?
Joachim: Well, the thing that we want the UN country team, represented by the country representative, or somebody else, or maybe a human rights officer in the country team, in the supervisory board for the SDZ, I think that’s a matter of course. I think you should not be active in a developing country and leave the UN aside. I think that wouldn’t work well. So, we want them in a supervisory role in the supervisory board as well, like civil society.
With regard to the UN’s engagement in the humanitarian, and in the development field. I mean, where we come from, all of us basically, in the SDZ Alliance, is that we have seen what you call the humanitarian development divide. So, we have seen problems in the way that the humanitarian agencies carry out their work and, in the way, that the development agencies carry out their work, especially with regard to the lack of a real connect between the two. Because like you have humanitarian activities, UNHCR being, of course a key actor, and you have development activities, UNDP being a key actor. In our view, they still do not connect enough.
Now, that has been the subject of a number of conferences, and some things have been undertaken, indeed, to actually improve the connect between the humanitarian development sector, but I think there is still a gap. So, this is the kind of gaps we are trying to fill with our SDZ, Sustainable Development Zone Alliance concept, because I think there is not enough of a continuum between humanitarian activities for people in need, and their possibility to actually emancipate from that and become economic subjects, consumers producers, and liaise with their natural urban environment and that’s the problem, and this problem is what we tried to address.
Mark: So, you mentioned Paul Romer’s interest in charter cities. Previously, we also have, for example, the Jordan Compact, which was targeting migrant communities, as well as a long history of special economic zones. So, what lessons do you draw from these projects in terms of like inspiration that you see as success and what avenues do you see as things that you might want to avoid that didn’t work out as successfully as might have been hoping some of these previous related projects to SDZs?
Joachim: Well, whatever I said about charters, Paul Romer’s charter cities before, I would like to make the point that I was talking about perceptions. Perceptions of charter cities concept were somehow in the sense that, this was dubbed a Neocolonialistic, et cetera. I’m not saying anything about Paul Romer, or his intentions, or the concept itself. But the problem was, I think that it was perceived as being neocolonial. And that, of course, it made it difficult. But of course, we can all learn from this. I think there is some elements we have to remember from the time that the concept was introduced and discussed publicly.
One consequence we drew from that is that we are all about local ownership and we don’t do a step in our direction without involving local stakeholders, because I think there needs to be total local ownership. Otherwise, you cannot introduce any such concept. It’s not enough to deal with the central government. You have to go to potential sites and you have to talk to the people and not only, but certainly also sort of the government, local government, but also to the people you want to reach with the concept, including, especially the vulnerable groups.
Having said that, you were mentioning the Jordan Compact. I was personally involved in implementing the Jordan Compact, after the London conference for supporting Syrians and the region, when I was the special representative of the German government for the Middle East stability partnership, as we called it, which was about implementing the London Summit, and which was about implementing the Jordan Compact. I think we can learn a lot from the Jordan Compact. First is, I think, a good lesson is that you can combine the idea of special economic zones with creating work for vulnerable groups, in this case, refugees from from Syria. In a way that really allows to make progress. I don’t know where we are now. But I think, at least 100,000, probably much more refugees are actually employed now, in Jordan, special economic zones, under the special legal framework of the zone.
Now, there are also things you can learn from the Jordan Compact, which you might not want to imitate, like there are problems with the remote location of some of the places where the refugees live, and where in turn, the special economic zones are. There’s some busing involved, et cetera, and some transportation costs. So, this is what made us think that you actually need to go where the vulnerable groups are, or you need to have a Brownfield development, instead of passing people to a special economic zone, et cetera, et cetera. So, there are lessons we can learn from the Jordan Compact, but of course, there’s also things that are quite pragmatic with the Jordan Compact. And I think it’s good that the international community was able to enter into that new stage, which also, included new thinking, because almost for the first time, people said, “Well, it’s not enough if people live for a projected time in a certain country, if sort of people that come from a forced migration background, live for a certain time in a country, but they also have to work they have to belong to the formal sector.” And all these recognitions in the London Summit, when the Jordan Compact was actually initiated, there was quite some progress.
Mark: Great. And what about, I think maybe other two areas that we had, the Charter Cities Institute, for example, draw some inspiration from as well as some lessons about our one new city developments. So, depending on how you want to count, there’s 100 new city developments being built around the world right now. Some of these are built by the government. Some of these are being built by the private sector. Some of them are public private partnerships. Some of them are doing very successfully. Some of them are not. And so, we look at those as well as special economic zones, which have a wide range from areas like Shenzhen, which is in what we described that CCI as a proto charter city, to special economic zones that often can be single factory and just handouts to politically connected individuals. So, how do you see variation of new developments and special economic zones with your SDZ project?
Joachim: Those are two different animals. I think the special economic zones and free cities, free private cities, whatever is not what we are pursuing. However, we note with interest that there is, of course, a movement and that people are doing this. What we found is that they usually come from different backgrounds. We come from a humanitarian development, civil society background, people doing free cities, and more SEZ’s come from basically private sector background from maybe also a libertarian background, that they’re skeptical with regard to what governments can do.
I’m not judging that one way or another. It’s just a different animal. It’s not what we’re pursuing. But of course, there are similarities in the sense that yes, we say we also need a special legal and administrative framework. I think that there is of course, an increasing awareness worldwide, that you can use special economic or rather administrative zone legislation to solve problems, humanitarian problems, development problems, as we are proposing with our sustainable development zone approach, but also political problems. I mean, there’s some famous, of course, examples where you try to use special zones to solve political problems or at least to mitigate political problems.
The special economic zone in Korea is one example. There have been proposals to actually have a special economic zone between Serbia and Kosovo. There have been proposals to actually make Northern Ireland a special economic zone in order to solve the political problem of the Brexit, et cetera, et cetera. Without prejudice to any of these solutions, I’m not commenting in substance now. But that shows that special zones are actually now used to solve other problem than just economic problems. That I think, is a very interesting development.
Mark: Great, thanks. Let’s go back to your time in Kosovo, because I see that as quite interesting, particularly with respect to how charter cities might play out. You had this, basically a special administrative governance regime. And so, what do you see as kind of the key lessons, how that’s informed your approach? What can be taken away? And then what might want to be adjusted a little bit with SDZs?
Joachim: Yeah, I think it has helped to shape my thinking not only my background, as the mayor for almost a decade in a normal “industrial city”, but also having been UN Special Administrator in what was at the time, a territory, and now as an independent country. Well, one thing I learned is that you need to have a very defined legal framework. Our framework in Kosovo right now, was the UN interim administrator, was the UN Security Council Resolution 1244, which, in certain aspects was a bit vague.
You had actually to fill it with concrete content, to be able to say this is our legal framework under which we’re operating. Example, we were conducting privatization exercise, like in many other former communist countries, privatization of the so-called socially owned enterprises, which were more than 500. Now, the resolution 1244, wasn’t exactly clear to what ownership in these socially owned enterprises meant. So, we had to fill it with content, had to actually go back to New York to the UN, and find additional legal ground to do what we wanted to do with regard to economic recovery. So, that’s just an example. That was one sort of experience, I can draw from this.
Another experience, being the special administrator in a special administrative zone was that you need a division of power. Actually, the resolution 1244 was designed such that I had ultimate executive competencies. There were not enough appeal mechanisms, neither before the Provisional Government of Kosovo, nor for the broader public to appeal decisions of, let’s say, my UN interim administration. So, what we did is we introduced oversight and appeal mechanisms, so people could actually appeal our decision. I could go on and on and on. But all these experiences have shaped my thinking, and sort of have influenced the concept that we’re pursuing today.
Mark: When I think about what you’re described in Kosovo, some of the challenges seem to be that it is or a lot of people were living there. So, you’re pursuing with SDZs, starting pilot projects on Brownfield sites. And so, for example, Paul Romer emphasized Greenfield sites, we at the Charter Cities Institute tend to emphasize Greenfield sites. And so, given that it tends to be easier to get the necessary political buy in to do reforms on Greenfield sites. So, I’m wondering what’s influencing your strategic decision to pursue brownfield sites for SDZs?
Joachim: I use the term Brownfield to visualize what the concept aims at. The concept aims at inclusion of vulnerable groups that are in the informal sector. So, at lowering the threshold for people to come from the informal in the formal sector through the special administrative framework. That is, by definition, a Brownfield thing, because you don’t find these vulnerable groups that we want to integrate in a Greenfield development. So, we’re something different. We’re not charter cities, and we’re not Greenfield.
However, as I keep saying, of course, there should be the possibility to scale up. It would be good if there is adjacent Greenfield development possible. But basically, this is by definition, first of all, a Brownfield thing.
Mark: Great. What do you see as the next I guess, substantive steps in SDZ Alliance? I mean, I think I’m getting a pilot project, one or two pilot projects off the ground. But what do you see is really necessary to catalyze this space to accelerate its development?
Joachim: Well, I think without going into detail, because sort of this is still a negotiation, we have enough enthusiasm in countries to actually go into the next step and create a pilot project. What we need now is investors and we also need to increase political advocacy. So, we get support from the political side. But that’s not so much the problem. The problem is now that we come to business plans that actually can be picked up by investors, and also donors and lenders.
Mark: Really, it’s kind of ready to go but in an injection of capital and ensuring that those plans are sufficiently adequate for the capital, whether it’s donor requirements or whether it’s investor requirements, that they feel comfortable, that they’re putting their money to good use.
Joachim: That’s basically where we are at the moment. I mean, we’ve talked to several investors, as is clear, and they said, it sounds good. We of course, now need to see a business plan for the pilot or for more pilots.
Mark: Great. Well, with that, let’s end on a happy note. So, thanks so much for coming on the podcast. I wish you the best of luck.
Joachim: Thank you very much, Mark.
Mark: Thank you for listening to The Charter Cities Podcast. For more information about this episode and our guest, to subscribe to the show, or to connect with the Charter Cities Institute, please visit chartercitiesinstitute.org. Follow us on social media, @cci.city on Twitter and Charter Cities Institute on Facebook. I’m your host, Mark Lutter, and thank you for listening to The Charter Cities Podcast.