The Architect of Change

December 1st, 2006
by Thomas Tomczyk

[private] v4-12-Interview-Italo TuglianiItalo G. Tugliani Salazar, 59, is the chief architect of the ZOLITUR (Zona Libre Touristica del Departamanto de las Islas de la Bahia) law. Born in El Progreso, Tugliani moved to Roatan in 1976 to work as a lawyer for the island’s first dive resort- Anthony’s Key Resort.

He has practiced law for 33 years, served as a judge at Honduran Appeal Magistrate, as General Procurement Distributor. In 1994 Tugliani was appointed Bay Islands Governor by president Reyna and until 2006 he served as Legal Council of Roatan Municipal.

He is married to Vivian, with whom he had five children. He says that what motivates him to work, are his old friendships with people on the island: Jerry Hynds and Julio Galindo.

Bay Islands VOICE: What are the origins of the idea of Freeport?
Italo Tugliani: The idea came eight years ago when we turned by accident into a tourist destination. We were a very nice green island with a few cabins for scuba divers. It was not a tourism destination; it was a divers paradise. When we became a tourist destination, we heard that Hyatt, Radisson wanted to put a hotel here and we said- ‘if we want to compete, we need to be like other destinations in the Caribbean.’ From Quintana Roo to Venezuela. They are loaded with tourism [and] free zones. The only reason why the cruise ships are coming here is because the off shore excursions are profitable for the cruise ship [companies on a] better level then elsewhere. [Also,] the people like the idea that they can retire six, seven months out of the year [here]. We have to be able to host them in the same or superior manner, or they won’t stay. We talked to the last three administrations: President Flores, Maduro and everyone liked it but nobody had the courage put words into action.
B.I.V.: Another issue mentioned in the context of this free zone was the issue of providing better security and policing.
I.T.: This law has several components: fiscal- to attract investment and business opportunities as there are no duties, income tax, or sales tax. Tourism is a word that you cannot isolate like a bacteria or virus. You cannot understand the meaning of tourism if you don’t understand the logistics of transportation, amusement, food and beverage, and accommodation. And to accommodate people you need to build and to build you need materials and workers. The other component is a balance between the human charge [invasion] that this island supports and compensation of businesses. We have many studies and the commission is competent to rule and regulate these types of activities on the island. Environmental, security and emergency considerations are all important. The most important thing is that the fiscal revenue will in a big percentage be managed and invested on the island.
B.I.V.: I’ve heard that this law is a composite of laws from San Andres, Colon, Costa Maya.
I.T.: I am the one who wrote it and I didn’t copy any of them. We definitely consulted them, but they are very different [than this law]. The one in Venezuela- it is on the mainland. In San Andres the law was written 30 some years ago and is antiquated for right now. It doesn’t have a component for diversifying investment. It was made specifically for the benefit of residents who live in San Andres. In Costa Maya, etc. they are totally different then ours because they don’t hold inhabitants. This free zone law is for the whole department and for all the inhabitants that live here. (…)This is a simple law that fits exactly to our needs.
B.I.V.: Who will be considered a resident in the census and are only foreigners with residency documents eligible for being beneficiaries of the free zone benefits?
I.T.: First, Honduran citizens who are domiciled here according to the census. Secondly, everybody: nationals and foreigners who have invested on the island. If they are residents that’s fine, if they are not legally speaking residents but have invested on the islands they will be beneficiaries as well.
B.I.V.: Are you disappointed by anything that was added or taken out from your proposal?
I.T.: In making this law we only had two brains in there: Mr. Hynds’ and my own. When you put this law in the middle of 140 other brains, defiantly you’ll have different thoughts, but I don’t have any disappointments.
B.I.V.: What about eliminating the two percent import duty, or eliminating the $3,000 a year purchase exemption for non residents.
I.T.: We thought that this [$3,000 allowance] is to mainlander’s advantage. Instead of going to Columbia, Panama, Virgin Islands, Belize or any other free zone why not keep this money here. This was a preoccupation of the merchants of La Ceiba, mainly, that this would develop an illegal competition. With TLC [CAFTA] agreement the whole country is going to turn after a few years into a Free Zone. Availability of goods from Mexico, US, or Dominican Republic will be a reality.
B.I.V.: Is this law going to radically change and restructure the Bay Islands?
I.T.: I don’t know. We believe it is going to be for the good. It is the matter of economics, right? We’re going to be at a different level [of development] and better prepared to compete. It’s a better position then we have now.
B.I.V.: Can the Bay Islands handle all the growth in an economy that is already booming?
I.T.: The islands are changing anyway, but for the worse. I believe we can change course. We will have an index of activities that we can influence. Right now you don’t know who is drilling, who is not, who is building and who is not. In a free zone you get to know all of those things. Where you have order you have success, where there is no order there is no success. [/private]

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