A Middle-Class Paradise in Palestine?

The West Bank's first Palestinian-designed planned city offers a window into the promises and perils of the current situation in the Middle East. But will it be a novelty, or a game-changer?

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The Rawabi construction site, as it appeared in October of 2010. (Dan Balilty/AP)

The sole outlet to Rawabi sits off a dizzying two-lane highway flanked by round, scraggly hills. In this part of the West Bank, just north of where the Jerusalem suburbs thin into a dry, granite-gray wilderness, the mountains seem to aid in the illusion that Israeli and Palestinian spheres of authority can remain perfectly, even harmoniously separate. Arabs use the road to get to the Palestinian-controlled cities of Bir Zeit and Ramallah; for Jewish Israelis, the road connects the Jerusalem area to settlements deep inside the northern half of the West Bank.

Ramallah's skyline is barely discernible on a hazy day. Ateret, a red-gabled settlement of about 90 families that sits high above the Rawabi junction -- a community which would likely either be vacated or incorporated into a Palestinian state under a future peace agreement -- flickers in and out of view with every delirious knot in the road. Even a concrete pillbox looming over the highest point along the highway is abandoned, its connection to the territory's oddly invisible occupying army marked only by a tattered Israeli flag that no one has bothered to steal or replace.

9-11 Ten Years Later

Last year was the first since 1973 in which no Israeli citizen was killed in a terrorist attack originating from the West Bank. As on the newly-pacified Gaza-Israel border, a tense quiet pervades things here, although a bright red sign at the junction reminds one category of motorist not to feel too complacent. "This road leads to Area 'A' Under the Palestinian Authority," it reads in Arabic, Hebrew, and broken English. "The entrance for Israeli citizens is forbidden, dangerous to your lives and is against the Israeli law." At the Rawabi junction these warnings of latent danger are almost comically off-base, partly because of the only other marker at the turnoff: a light-green arrow sagging off of a nearby post.

No one lives at the end of the road, which is every bit as wavy and disorienting as the adjoining highway. It empties into a scene that seems engineered for maximum bewilderment: three high-rise cranes, topped with fluttering Palestinian flags, tower over massive stone and concrete building frames. Cement-mixers, painted the same shade of light green as the arrow at the turnoff and marked with the project's logo -- a wiry oval with a cute little convex loop at the end, like a child's drawing of a heart that could also be a tree -- line up to receive material from a buzzing, state-of-the-art plant. The construction site, a couple turns up-road of the cement factory, is swarming with workers in green hardhats. Spotless SUVs with the Rawabi logo on the door speed from one side of the site to another.

Rawabi, which will be the first Palestinian planned city in the West Bank, runs from the top of the mountain to the valley below, with its highest point sitting at an elevation slightly higher than Ateret, which is now constantly visible. In contrast, the chaos of Ramallah, stronghold of an insolvent and sclerotic Palestinian Authority, feels distant in more senses than one.

Rawabi represents something totally new -- a visionary Palestinian-directed private sector project, with support from both Israeli businesses and a major Arab government. It has the potential to shift the conversation on the region's future on both sides of the Green Line. It could convince Palestinians -- and the rest of the world -- that the future of the West Bank shouldn't be shackled to Ramallah or Jerusalem's vacillating willingness to hash out fundamental issues. It could prove that there's an appetite, both among Palestinian consumers and foreign donors, for the creation of a social and economic existence in the West Bank that's de-coupled, insomuch as currently possible, from the Middle East's tense and labyrinthine politics.

It would also help solidify the benefits of the current cessation in hostilities. Indeed, Palestinian leader Mahmoud Abbas's progress in fostering the end of violent resistance in the West Bank in the years after the bloody Second Intifada, coupled with Palestinian Prime Minister Salaam Fayyad's widely-respected institution-building initiative, could get a crucial private sector assist through Rawabi's eventual success.

And Rawabi gets at something even more fundamental. "It touches upon all of the core issues of control and sovereignty," says Robert Danin, a fellow at the Council on Foreign Relations who, as head of the Quartet mission in Jerusalem from 2008 to 2010, witnessed some of the political discussions that accompanied the project's creation. "This could be a huge, iconic victory for the whole strategy of building Palestine from the bottom up rather than trying to build it at the negotiating table," he says.

Its success would prove just how much power Palestinians can, and indeed already do, have in shaping their future. And its failure could prove the exact opposite.

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I visited Rawabi two weeks ago with a group of national security professionals, as part of a trip organized by the Foundation for Defense of Democracies, a Washington, DC-based think tank. (All of the photos in the body of the article are mine.) We were taken around the construction site by a young Palestinian engineer who conveyed the vast ambition underlying the project: When the city is completed, she said, it will house 45,000 people in 23 distinct neighborhoods with innocuous, nature-based names like "Flint," and "Hard Rock". (Rawabi is Arabic for "Hills".) There will be eight schools -- some of them built with the help of the U.S. Agency for International Development -- a "huge park," a convention center, an 850-seat indoor theater, and a 20,000-seat amphitheater carved into a hillside.

Most ambitiously, there will be a commercial center that developers hope will bring in between 3,000 and 5,000 permanent jobs within the next five years -- hopefully, we were told, in the informational technology sector (an aspiration that might imply a certain cooperation with the burgeoning tech industry on the other side of the Green Line). The engineer said that Rawabi had already created 3,000 construction jobs for West Bank Palestinians. The city is Palestinian-designed and Palestinian-built -- making the surfeit of Qatari flags at the construction site somewhat puzzling at first. And while the project does not purchase materials from Jewish settlements in the West Bank, the engineer was hardly shy in explaining that Rawabi would add an estimated $85 million to the Israeli economy.

As we drove around the construction site, the engineer's talk made few demands on the imagination. The sheer scale of the project is already obvious. Within the next 18 months, the first phase, which includes six neighborhoods, a mosque, the amphitheater, and two-thirds of the city's commercial center, will be complete, and 3,000 people are scheduled will move into Rawabi by the end of 2013. Apartment blocks built of a local white stone -- "Rawabi stone," the engineer called it -- are already rising out of a network of concentric ring-roads centered on the top of the hill. Most of these roads have already been paved, and there are terraced retaining walls, built out of thick stacks of local sandstone, running all the way to the bottom of the valley. No bleachers have been installed in the amphitheater yet, but it's fairly far along, with the future seating area fanning into a wide notch in the mountainside. There are attractive stone signs bearing the stylized Arabic names of neighborhoods that haven't been built yet.

The future commercial center is also well on its way to completion. Situated on a shelf slightly below the summit of the hill, the complex of office buildings, hotels, theaters, and a convention center will huddle around a broad outdoor plaza, which will be connected to the lower neighborhoods through a wide flight of stairs. The stairs, plaza, and central buildings are already past their skeletal phase, and the high-rise apartments ringing the city center look like they're almost complete. For now, the commercial core is a jumble of dust and brutal concrete surfaces, but in the future, someone lingering in the cafés near the staircase will enjoy phenomenal views of the rugged hill country, and perhaps even glimpses of the Jordan River Valley on a clear day.

It is still possible to remain unconvinced of Rawabi's reality -- doubtful as to whether that café will ever be built, or whether any middle class-Palestinian desirous of a generic middle class existence will ever linger there. There's abundant reason for skepticism. The project's future depends on the Israeli authorities' willingness to allow for the construction of access roads in "Area C," or West Bank territory under the direct control of Israel. The sole existing route into the city only exists because the Israeli government, after years of bureaucratic and high-level diplomatic wrangling, granted Rawabi's developers a permit for a "temporary" road. Technically, they will have to destroy the road when the current permission expires. And even if the Israelis agree to make the road permanent, one two-lane route is hardly adequate for a city of 45,000 people. Developers claim it isn't even adequate to the needs of the current construction site. 

Water is another challenge. Negotiations with Israel and the Palestinian Water Authority are ongoing, and developers say they have held in excess of 100 meetings with Israeli officials on water-related issues alone. Developers admit that they aren't sure where the city's water resources will eventually come from, and the construction site only got running water two months ago.

And they'll admit that attracting jobs to the site is an even bigger challenge than Israel's West Bank regime. Rawabi isn't meant to be a bedroom community of Ramallah. It's meant to be a self-contained city, with office and retail space. The jobs haven't quite materialized yet (although the developers have a slight head start: between 200 and 300 call center-type jobs currently based in Ramallah are scheduled to move into Rawabi when the first phase of construction is complete). If the political or security situation seriously deteriorates -- if the checkpoints return, if the Israelis are forced to re-occupy urban areas ceded to the Palestinian Authority under the Oslo Accords, as happened during the Second Intifada; if Hamas wages a violent takeover of the Palestinian government -- all bets are off. The developers don't seem to be bothered by those possibilities right now. At the showroom, built at the very top of the hill, the future is nothing but bright. 

I chatted with another site engineer as we walked through a scale-model mock-up of a typical Rawabian street, where happy families in western dress waved from little video screens inset in plastic apartment windows. I asked her about the Qatari flags I had seen around the construction site. Qatar's state investment fund is footing two thirds of the nearly $1 billion project bill, she said. "This is the biggest investment in the history of Palestine," she explained as we stepped over a fake valley in the next room, walking past a mock-up of a stunning hilltop view contained inside a mock-up of a future apartment suite. The Rawabians will apparently own large flat-screen TVs and stylish coffee tables, and their living spaces will be kept mercilessly clean.

What, of that $1 billion investment, was going to Israel, I asked? Israeli companies were providing cement powder and sand, she said, and the project had consulted with "Israeli experts." "In some cases, you have to do that," she said, alluding to the comparative difficulty of importing building materials through neighboring Jordan. In other words, working with the Israelis was a necessary business decision for a project this large and complex.

The fake street, fake valley, fake apartment-display ended in a pleasant sky-lit lobby, where representatives of the Cairo Amman Bank, Arab Islamic Bank, and Arab Bank sat in logoed glass cubicles, available to discuss financing for future purchases. And for the still-skeptical, there's a six-minute 3-D movie, where the city appears in its completed glory -- a place where families picnic, men in business dress greet each other amid bustling plazas, and fireworks crest over soaring apartment towers topped with solar panels. The architecture is tasteful. These aren't dachas plunked on fake islands off the coast of Dubai. It's the kind of place where I, or just about anyone in the world with middle or even upper-middle class aspirations, would want to live. And it looked weirdly familiar.

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The group had a chance to visit with Bashar Masri, the Nablus-born founder and CEO of Massar International, the Palestinian conglomerate financing a third of Rawabi. Massar and Qatar Diar, the real estate investment arm of the government of Qatar's sovereign wealth fund, jointly created Bayti Real Estate Investment Company -- Palestine to build and market Rawabi. But if two-thirds of the project's money is coming from Qatar, the vision behind Rawabi is Masri's.

Massar owns a private equity fund that invests in Palestinian agriculture and natural gas distribution. It runs travel agencies in Jordan and brokerage firms in Serbia. Massar invests in Harvest Export, which sells Palestinian produce to consumers in Russia and Western Europe -- as well as in Israel. Two years ago, Masri made headlines when he attempted to purchase a bankrupt Jewish housing development in East Jerusalem. He helped create an online trading and brokerage platform for Palestine's stock exchange.

Masri has lived outside of Palestine for periods of his life, and is, by all accounts, largely untainted by connections to the PA's notoriously rent-seeking inner circle. He's a trim middle-aged man, smartly-dressed, friendly and approachable. There seemed no more appropriate a place to talk to him one-on-one than on a wide terrace overlooking the construction site, with hills, valleys, and rising apartment blocks -- the future he was in the process of building -- stretched out in front of him.

"On a good, clear day, you can see Tel Aviv, Ashdod, and Ashkelon," he told me. "One-third of Palestine and Israel." Rawabi is in the second-largest, yet most sparsely-populated Area A in the West Bank -- from the terrace, which faces away from Ateret, you can see expanses of mostly-empty hills. Perhaps in Masri's mind, they are awaiting Rawabis of their own. When I returned to Washington, I asked him in a phone interview if he viewed his project as the first of many such planned cities in Palestine. "I always say our success is measured not by how many homes we sell. It is measured when a second Rawabi is established," he told me.

Standing on the terrace, I asked him if his willingness to undertake such a massive project reflected any optimism about the coming years -- no one invests this much time, money, and energy into something if they expect war is on the horizon. "This project is built for today's politics," he replied. "If it gets a little worse, or a little better -- fine. If it gets really bad, we're in trouble. If it doesn't, then great. We're not waiting on a breakthrough."

He estimated that Israeli obstruction had delayed the project by a year and a half. The bureaucratic inertia could continue: For instance, developers were surprised to find out that, by a quirk in the West Bank's notoriously Byzantine and palimpsestic legal codes, they required the approval of a joint Israeli-Palestinian water commission created through the Oslo Accords to build a sewage treatment plant in an Area A, approval that they recently received. There's also the still-unresolved matter of the access road. But thus far, Rawabi had flourished in spite of delays and inconveniences.

Could it survive its isolation, though -- could this hilltop off of a two-lane highway get enough water and electricity to support 45,000 people living at a middle class standard? "There is nothing here at all. We're out in the boondocks," he conceded. "We're building everything from scratch." One needed only to glance at the busy construction site below to understand that Masri considers this a point of pride, far from a potential death-sentence for his project.

I asked Masri about something that had jumped out at me during the 3-D video. The finished Rawabi, I'd noted, had the same terraced garden parks, stoic, modular apartment design, and concentric hilltop roads that I had seen in Talpiyot Misrach, a new neighborhood on the fringes of West Jerusalem. His city looked very, well, Israeli.

"This place is influenced by Reston, Virginia," he said -- Masri is a Virginia Tech alumnus, and had lived in the Washington, DC area earlier in life. It was, he said, influenced by planned suburbs outside of Cairo. "And it's influenced by Modi'in," he added, explaining that the site's engineers and designers (who were entirely Palestinian, we had been told earlier), had traveled to the Israeli city, which is built around similar topography, for inspiration.

Palestinians have long understood that a western-style standard of living was possible in their part of the world. They knew that places like Rawabi already existed minutes from their own homes, but didn't think that the quality of life epitomized by hilltop settlements and cities in Israel -- places they weren't allowed to visit without an official permit from the military -- was accessible to them.

During our phone interview, Masri talked about the astonishment that Palestinians feel when they visit the construction site. "When [Palestinians] come to Rawabi, and they go through the showroom and they see what we have planned for them, and they see it actually being built, they say, 'Wow, this can't be for us. This is not for us. This is too high of a standard for us because we are supposed to live miserably under the occupation'. Then they come to the other side of the showroom and see the city being built, and reality starts sinking in."

It's a type of living closely associated with the Palestinians' neighbors in Israel. "They know very well that just a 20-minute drive away, there's a community with a much higher standard of living. And that community happened to be one representing the occupier, quote-unquote the 'enemy.' But they would love to live like that. And that's why when they come to Rawabi some of them don't believe this is for them initially. The first thing that goes through their mind is that this could be for the Israelis."

But it is for them. Rawabi's significance could lie in something more mundane than basic issues of sovereignty and control in the West Bank. It lies in the common, human desire -- powerful on either side of the Green Line -- for a comfortable and dignified existence.

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In some quarters, this idea of working within the present and less-than-ideal political and economic framework to achieve this goal is nothing short of inflammatory. The U.S.-based, anti-peace process website Electronic Intifada has smeared Masri as an Israeli collaborator, and there have been scattered accusations that the project actually legitimizes Israeli control over the West Bank.

Danin says that Masri is faced with a difficult balancing act. "On the one hand you're denying the occupation, and you're saying you do not accept its legitimacy," he says. "But that doesn't mean you won't work with Israel in order to improve the Palestinian situation with the goal of removing the occupation. That's a difficult message to convey successfully."

Masri rejects the notion that he abetting a problematic status quo. "The vast majority of Palestinians understand and know reality," he said. "There is no home in Palestine without Israeli cement and parts. Every construction project in Palestine must have components from Israel. So it's not like I'm doing something different."

Of course, he doesn't like that Israel has so much control over Palestinian imports, and the West Bank economy in general. "This is the occupation," he said. "I'm not happy about that and that's why we strive for a state of our own." But he likened boycotting Israeli products to boycotting products from the United Kingdom, the United States, or other countries supportive of Israel -- something he wouldn't consider. The only people he won't buy from are the West Bank settlers.

Luckily, Masri's vision has the backing of a powerful regional government -- one that does not officially recognize Israel, and whose actions have often had the effect of strengthening some of the Jewish State's sworn enemies.

The Gulf kingdom of Qatar has done more than simply buy into the Rawabi paradigm: It's also funding two-thirds of the project, to the tune of over $600 million. This is enough money to single-handedly finance the Fatah-dominated Palestinian Authority -- which is effectively broke, thanks to penalties imposed by the Israeli and U.S. governments after Mahmoud Abbas's successful push for a U.N. General Assembly vote on Palestinian U.N. membership, and a freeze in financial aid from Gulf State donors, most notably Saudi Arabia -- for the better part of a year.

Instead, the Qataris have not only bypassed the PA, but channeled money into a project that seems to prove the PA's uselessness. "It's like an island inside the traditional infrastructure of the PA," says Jonathan Schanzer, vice president of research at the Foundation for Defense of Democracies and author of a book on Palestinian internal politics. "It shows everyone what you can do if you don't go through the PA. The PA receives $600 million a year [in foreign aid] and they have not done something like this."

Masri says that the leadership of the PA has been fully supportive, but that Rawabi has been hurt by the Palestinian government's lack of capacity. "We should not be building public schools. We should not be building a waste water treatment plant or waste water networks or water reservoirs," he told me. "Unfortunately we have to do that because the Palestinian Authority does not have the funding and the donors let [the PA] down."

There might be a political calculation behind Qatar's decision to throw an amount of money equivalent to two years of U.S. financial aid to the PA behind a single private-sector figure like Masri. Qatar recently announced plans to invest nearly $400 million in the Hamas-controlled Gaza Strip, and in October of 2012, Qatari Emir Sheikh Hamad bin Khalifa al-Thani became the first head of state to visit the Strip after the Islamist militant group's 2007 takeover. Hamas politburo chief Khaled Meshaal lives in Doha, and Qatar Diar is financing a major development in Sudan, whose cash-strapped government enjoys close relations with Iran, and has facilitated the transfer of long-range rockets to Hamas. In short, Qatar supports an E.U. and U.S. listed terrorist organization bitterly opposed to both Israel and the current PA leadership. And it also has no problem investing in Rawabi.

According to Kamran Bokhari, vice president of Middle Eastern and South Asian affairs for Stratfor, Qatari support for Hamas is part of the sheikhdom's larger, post-Arab Spring strategy of siding with the Middle East's Islamists, and specifically the Muslim brotherhood, whom the Qataris view as the region's rising power. "The Qatari strategy is that the situation has changed, and we need to fend for ourselves and ensure that the regional anarchy is not going to impact us," says Bokhari. The Qatari investment in Rawabi -- which feeds an $85 million investment in the Israeli economy, and which could not have happened without some degree of official Israeli approval -- is an example of this larger geopolitical strategy, which is driven more by perceived self-interest than by an ideological affinity for political Islam.

"Investments in the region are about the return on political influence," adds Gregory Gause, a professor at the University of Vermont and a non-resident senior fellow at the Brookings Institution-Doha. He noted the presence of a large American airbase in Qatar, and the country's close relations with the United States.

In the Palestinian territories, as in the broader region, the Qataris are supporting secular and religious forces in a way that will maximize their influence and keep the regional balance as favorable for them as possible. In a sense, the same strategic calculus that convinces Qatar to support Hamas allows them to cooperate with Israel and the West Bank private sector as well.

"I think Qatar is going by the ground reality," says Bokhari. "Fatah, the ruling faction of the PA, is essentially tanking. It's really in a state of decline because of corruption and charges of embezzlement. It's got an aging leadership. There's no dynamism left in the group. There's a lot of factionalism. It's almost like an oligarchy."

Rawabi could be Qatar's way of encouraging the currently-calm status quo in the West Bank, but without obviously upgrading their ties to Israel, or throwing their money behind a political establishment that they don't fully trust. "On one end they need to make sure Fatah does not completely collapse or weaken to the point where they're no longer coherent," says Bokhari, "and Hamas needs to be shaped and contained and shepherded in a way that it doesn't grow into anything larger."

Though there are politics underlying Qatar's investment in Rawabi, it is still, inevitably, a financial decision. "You have serious people who have a lot at risk here," Danin says. "Their goal is not primarily to make a political point. Their goal is to recoup their investment and make some money." Even resource-rich Qatar, which wants to diversity its holdings in order to hedge against long-term shifts in the oil and natural gas market, cares whether its investment choices pay off.

Danin believes that Rawabi's Palestinian and Qatari investors made a wise decision. Housing in Ramallah is expensive, and Danin says that there is a sizable and highly-educated Palestinian middle class in need of an alternative to the West Bank's de-facto capital. He expressed little doubt when I asked him if the West Bank economy could support Rawabi. "This is a Palestinian national project," he said. "It is the best of what is possible in that it's private sector-led, and it's profit-making led."

And it has supporters in high places. When President Barack Obama met with Israeli officials in Washington in September of 2010, Rawabi was on the agenda.

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From one perspective, Rawabi is a historic investment in Palestine, as well as an unusually open point of cooperation between Israel and an Arab government. It could improve the lives of Palestinians, while convincing Israelis that they have nothing to fear from their neighbors' prosperity. But any attempts to change the status quo in the West Bank are fraught with difficulties.

There's Israeli bureaucracy to overcome. "In Israel, if the Minister of Defense says I want something, it's not that the system thwarts it. But the system is so decentralized that ultimately it takes a lot of steps to get it translated into action," says Danin. Israeli officials are positively disposed towards Rawabi, but it's still taken years to resolve sovereignty and governance issues around necessities like water, and a single access road. Such Israeli inertia was apparently at the heart of Obama's concerns back in 2010, and sources say that the president has discussed the issue of the access road with Israeli Prime Minister Benjamin Netanyahu on multiple occasions.

Back in Washington, I asked Masri if he believed the Israelis understood the potential importance of Rawabi. "I really don't know," he said. "Their statements are neutral to positive. But their actions are neutral to negative."

And then there's the larger inertia. What meaning does a place like Rawabi have if it sits in the middle of a still-unresolved conflict, or if Palestinian economic self-improvement stands in contrast to an all-pervading political stasis -- or even political backsliding? Today, Rawabi is significant because of its novelty. But if there's a breakthrough in the Israeli-Palestinian peace process, perhaps enabled by a growing West Bank economy and a permanent end in terrorism, it could take on an importance much larger than itself.

On the drive out of the valley, where the highway swerves past the pillbox with the beaten Israeli flag and past the turnoff for Ateret, the picture is still mixed.