State-to-state foreign aid can’t stop terrorism. But a new private-sector program could subvert it by creating enclaves of freedom and prosperity.

“Those attacks showed emphatically that ways of doing business rooted in a different era are just not good enough. Americans should not settle for incremental, ad hoc adjustments to a system designed generations ago for a world that no longer exists.” — 9/11 Commission Report

Far from defeating terrorism, today’s government-to-government foreign-aid system can actually incite it by propping up corrupt and repressive one-party states. Fortunately, there is a strategy that could subvert global terror by providing hope and opportunity in the Third World — at the expense of corruption and despair


Free Cities is a new private-sector development paradigm that would allow the United States to offer millions of people in developing countries the same freedom and non-corrupt prosperity that Hong Kong enjoys — without the baggage of colonialism.

Hong Kong was always different from other colonies. It began as a minor trading post, surrounded by empty territory. Over time, more and more people moved there, attracted by opportunity and freedom — just as they were drawn to the United States. In 1984 Hong Kong became a free city under a 50-year agreement between Britain and China. The Chinese government let Hong Kong retain its self-government, all its existing laws, and its free-market economy. Post-colonial Hong Kong has been a spectacular success, energizing and accelerating the transformation of Communist China itself.

China calls this remarkable arrangement “One Country, Two Systems.” It provides a model the U.S. can use to seed new outposts of freedom and prosperity around the world.



The U.S. should negotiate a series of bilateral treaties with receptive governments, carving out undeveloped sites the size of Hong Kong. Then a joint venture between the host government and the U.S. would launch brand new Free Cities in these places, with a complete set of American-style freedoms and responsibilities, guaranteed by treaty for 50 years.

Treaty-based Free Cities would entice and attract enterprising people and capital from around the world by offering: self-government; the rule of law; low taxes; reliable prosecution of corruption; freedom of faith, speech, and press; public registration of real property; a merit-based civil service; multi-ethnic meritocracy; zero tariffs; and an American university.

Free Cities would exemplify free-market globalization, rather than the economic exploitation of protectionist colonialism. They would generate millions of jobs where there are none today. And rather than opening another bottomless pit of statist foreign aid, these cities would be self-funding. A Free Cities development strategy would pay its own way by attracting funds from the private sector.

A Free Cities program would also offer a transformational solution to illegal immigration. It is economic desperation that drives millions of illegals into the U.S. and Europe today. Free Cities would offer these people hope and opportunity back home. They would empower enterprising people around the world to self-select and congregate in safety to pursue their dreams of freedom and non-corrupt prosperity.



The Free Cities concept is simple, inexpensive, and revolutionary. It would shift the focus of foreign aid away from the state and toward the private sector. And it would put America on offense in the global war of ideas.

A Free Cities program would appeal directly to the idealism and generosity of the American people. It could stimulate a profound new American engagement with the poor of the world. Rather than just talking about helping poor people, or pouring more aid dollars down the drain, Free Cities would give millions of Americans a long menu of things they could do personally — either philanthropically or for profit — to help admirable and motivated entrepreneurial people build new free societies in Latin America, Africa, Eastern Europe, Asia, and the Middle East.

It is an undeniable truth that way too much state-to-state foreign aid is stolen. Today’s aid system was designed for a different time. It survives primarily because it has been the only game in town. The emergence of a viable alternative development paradigm would enable Congress to institute fundamental reforms.


Free Cities would create a global network of vibrant new free-market economies, allied with the United States and populated by citizens who have concrete stakes in preserving their freedoms and the open global trading system.

And this proposal can generate more than enough political support to be enacted. It will attract:

• People who want to subvert terrorism.

• Companies looking for non-corrupt markets in developing countries.

• Faith communities that need freedom of faith for their overseas missions.

• Expatriate entrepreneurs who would love to make an honest living back home.

• People offended by the waste and corruption of today’s foreign-aid system.

• Friends of freedom everywhere who dream of building free societies.

Free Cities offers a path to purpose for Americans who are looking for inspiring goals they can pursue to make a genuine contribution to a better world.

– Former Speaker of the House Newt Gingrich is cofounder of Renewing American Leadership. Ken Hagerty is vice president, policy, of that organization.