The dehydration of economic peace

The irony of Rawabi is that everyone, in both Israel and Palestine, seems to want it to happen. Nevertheless, Palestine’s first planned city still lacks a stable water connection, its continued cash flow is threatened and despite their best intentions, interested parties the globe-over cannot bring the project any farther forward. Officials involved in the project say a political power play — part of Netanyahu’s bid to undermine the Palestinian unity government — is the only thing stopping the water from flowing. 

By Corey Sherman

Construction in the new Palestinian city of Rawabi. (Photo by Oren Ziv/
Construction in the new Palestinian city of Rawabi. (Photo by Oren Ziv/

“Rawabi,” Amir Dejani says, “is about the future.”

The deputy managing director of Rawabi, Dejani sits behind his desk with a neon construction vest on top of a neatly pressed short-sleeve button down shirt. His two cell phones periodically buzz and ring—not to mention his email notifications, and landline telephone—though he interrupts our conversation only once to offer me coffee and water.

The project, Palestine’s first planned new city, “is about creating hope, building for a better future [with] better schooling, healthcare services, infrastructure, a green city, a modern city focused on creating a more sustainable way of living, focusing on environmental concerns, bridging relations between local and international firms providing professional services to the tenants and residents.”

Rawabi’s future seems rather far away, however. It lacks a stable water connection; its continued cash flow is threatened; and interested parties the globe-over cannot bring the project any farther forward. Rawabi’s tenuous state, perhaps overshadowed by the wars to Palestine’s north, is nevertheless a part of the larger regional puzzle—and threatened by the same factors of instability.

The main hurdle at the moment is moving the project’s first residents into their new homes. But Rawabi simply doesn’t have enough water: the 300 to 500 cubic meters of water a week provided to Rawabi by the regional Palestinian water authority, the Jerusalem Water Undertaking, is just barely enough to keep construction going, Dejani explained to +972.

The solution they seek is seemingly exceedingly simple: just three kilometers away, in the Palestinian village of Umm Safa’, is a connection point belonging to the Israeli national water company, Mekorot. Hooking up in Umm Safa’, Dejani says, will provide the city-to-be with 300 cubic meters per day, enough to deliver their first batch of apartments to some 600 residents and begin collecting payments from buyers, thereby ensuring the project’s cash flow and staving off any work stoppages or layoffs.

A new city, an old microcosm

Though Rawabi is built on the West Bank’s second largest contiguous strip of Area A, under Palestinian civil and security control, the 1.2 kilometers corridor separating Rawabi’s water hookup from Mekorot’s is entirely in Area C, under full Israeli civil and security control—thus placing Rawabi’s future in the hands of Israeli politicians and bureaucrats at a time when talks of statehood are muffled by noise surrounding Israel-Palestine this summer: Collapsed negotiations, wars, kidnappings, mutual accusations of war crimes, settlement growth, and clashes in East Jerusalem.

None of this is new, the cynic will tell you. Operations in Gaza, for example, are referred to in Israeli political discourse as “mowing the grass”—periodically cutting down Hamas and other groups’ military capacity without fundamentally altering the political status quo in the coastal strip. Negotiations, too, seem to come and go, leaving in their wake nothing but pricey photo opportunities. The verbal jousting by Abbas and Netanyahu on display this week at the UN General Assembly? Par for the course.

True believers in the peace process, however, identify a shift in the basic tenor of Israeli-Palestinian relations—a climate characterized by mutual distrust where neither side believes the other is committed to a two-state outcome.

“There is a context now in which you don’t get something unless you give something,” said Ambassador Dennis Ross who served as U.S. President Clinton’s Middle East envoy from 1993-2001, and most recently in the Obama administration as a special assistant to the president and senior director of the National Security Council for the central region (Middle East, the Persian Gulf, Afghanistan, Pakistan and South Asia). “That has not always been the case.”

Rawabi’s challenge – and future – stands as a microcosm of this political climate.

Developers see Rawabi as a revolutionary component of Palestine’s urban infrastructure, adding a new economic and cultural hub to the string of cities that run along Israel’s Route 60—Al-Khalil (Hebron), Jerusalem, Ramallah, Jenin and Nablus. In a future Palestinian state, Route 60 may be for Palestine what I-95 is to the eastern United States.

Work continues on the Roman Amphitheater, called Wadina, Arabic for our valley. The concert scheduled to take place there this month was canceled in solidarity with the Palestinian lives lost in Gaza. “This is not party time,” Mr. Masri told the ‘New York Times.’ “Far from it.” (Photo by Ben Drusinsky)
Work continues on the Roman Amphitheater, called Wadina, Arabic for our valley. The concert scheduled to take place there this month was canceled in solidarity with the Palestinian lives lost in Gaza. “This is not party time,” Mr. Masri told the ‘New York Times.’ “Far from it.” (Photo by Ben Drusinsky)

There has been a construction boom since the signing of the Oslo Accords, explained Ahmed Nasser, a salesman at Al-Reehan, a new “neighborhood” of Ramallah five kilometers north of the city run by the Amaar Real Estate Group, a subsidiary of the Palestine Investment Fund. Unlike Al-Reehan, Rawabi will exist as a standalone city with its own municipal government, schools, hospitals and houses of worship.

“The economic drive is absolutely critical,” explained Dejani who, prior to joining the Rawabi project worked for USAID in Tel Aviv.  “We are not only creating employment opportunities in the construction industry but we are building a capacity by giving opportunities to Palestinian architects, planners, engineers, environmentalist water management waste experts…to contribute effectively to the wellbeing and future sustainability of this city.”

A sprawling complex of white stone buildings—it uses only stone cultivated in their quarry, and cut at a stone cutting factory on site—Rawabi resembles such larger Jewish settlements as Modi’in. Twenty-five kilometers from Nablus in the north and nine kilometers from Ramallah to the south, Rawabi is set in the heart of the Judean Hills. A look from any of Rawabi’s vistas reveals the true meaning of the cliché “God’s Country.” Rolling hills of lush green stretch out in every direction and on a clear day the Mediterranean coastline is in full view. A resident of the settlement next-door, Ateret, told +972 that during Operation Protective Edge, he could see, from a safe distance, the Iron Dome’s interceptions of rockets from the Gaza Strip. “It was simply beautiful,” he said.

The stone cutting factory in Rawabi. (Photo by Oren Ziv/
The stone cutting factory in Rawabi. (Photo by Oren Ziv/

Economic peace or entrepreneurial state building

The project, conceived by Bashar Masri, a Nablus-born Palestinian-American businessman, and funded jointly by the Qatari Diar Group, is meant to show that Palestinians can, and should “push ahead despite the occupation,” Masri told Foreign Policy Magazine earlier this year. “The day after independence we must have something to show the international community.”

Though Rawabi weathered the political storm surrounding the Israeli-Palestinian conflict in its first four years—two wars in Gaza and an aborted peace process—it is, at the moment, as vulnerable to the political vicissitudes in Israel-Palestine as any aspect of the conflict.

That shouldn’t be a problem, though. After all, Israeli Prime Minister Benjamin Netanyahu, whose 2009 election platform was based on a theory called “economic peace,” leads Israel’s current ring-wing coalition. Proponents of this theory see political negotiations as a separate issue from market integration, which, they argue, could have a more transformative effect on Palestinians anyway.

Rawabi is a poster child for economic peace. Funded by private individuals, it has created thousands of jobs for construction workers, marketers, engineers and consultants. Four banks maintain offices in Rawabi’s sales center, where buyers can finance their homes with access to cut-rate mortgages made possible by a $313 million loan made by the Overseas Private Investment Corporation (OPIC) to the Palestinian National Authority. When completed, Rawabi will possess an tech hub that, in addition to providing outsourcing opportunities for multinational technology companies, will be home to Bader, a tech incubator that will partner local entrepreneurs with Massar International, Masri’s holding company.

A view of Rawabi. (Photo by Oren Ziv/
A view of Rawabi. (Photo by Oren Ziv/

An official in the Israeli Prime Minister’s Office told +972 that as a point of policy, the prime minister supports the project. “Development in the PA is a win-win,” the official explained. “It’s a foundation for stability and ultimately for peace.”

Other members of his coalition are placing new conditions on the project demonstrating the power the coalition’s most conservative members wield over Bibi’s interests in economic peace.

Several weeks ago MK Silvan Shalom (Likud), the Israel’s energy and water minister, was quoted by several news outlets as having instructed the Israeli delegation to the joint water commission to approve of Rawabi’s water connection only if the Palestinian delegates approve similar improvements to the nearby Jewish settlements of Ofra and Ateret.

This tit-for-tat approach was not the point of the Joint Water Commission (JWC), an Oslo-era working committee that must unanimously approve all water projects – Israeli or Palestinian – in the West Bank. The thinking at the outset of Oslo, Ambassador Ross explained, was that the interim period should be used to deepen ties between Israelis and Palestinians so that down the road they could tackle on the core issues. The JWC was meant to “build a pattern of living together” and “establish a common stake” in a practical, not existential, issue.

The issue itself falls under the purview of the Israeli army’s Coordinator of Government Activities in the Territories (COGAT), the body that oversees Israel’s military government in the occupied territories.

For its part, COGAT is quick to blame the holdup on Palestinian intransigence.

“Projects haven’t been approved for several years, due to the Palestinians refusal to hold the meetings of the committee,” a COGAT Spokesperson told +972 in an email exchange. “Even though, the Coordinator Of Government Activities In The Territories is trying to find solutions in order to settle the issue.”

This week, however, the Israeli army commander of COGAT, Yoav Mordechai, sat down with Palestinian Prime Minister Rami Hamdallah, according to the Palestinian premier’s office. It was not clear if the issue of Rawabi was raised. A request for clarification from COGAT went unanswered at the time of publication.

No political will

Another veteran of the peace process, Yossi Beilin, a former Labor and Meretz MK whose Beilink Consultancy works to connect foreign businesses and investors to Israel, finds such an explanation to be masking the true roadblock: Prime Minister Netanyahu himself.

“The prime minister apparently is not so enthusiastic about [Rawabi],” said Beilin. “He isn’t against it enough to torpedo it, but he is not fighting for [its success].”

Beilin calls Bibi’s economic peace theory “nonsense” and were it even true, would nevertheless be slave to what Beilin describes as Netanyahu’s character. “His general attitude in life is that you can [never] give [something] for nothing: if they get water, you should allow this—you are a sucker if you give them something for nothing.”

The leadership at Rawabi finds Netanyahu’s enthusiasm for economic peace dubious.

“Mr. Masri has the feeling that the water denial has to due more with the so-called ‘sanctions’ imposed on the PA three or four months ago as a result of the [Palestinian] unity government,” explained Dov Weissglass, who served as an adviser to Prime Minister Ariel Sharon and works as Rawabi’s lawyer on all matters related to Israel. In Masri’s view, “it is not necessarily a purely bureaucratic issue related to the committee,” said Mr. Weissglas. “[And] in the absence of another explanation, this is the only conclusion that anyone should reach in the given circumstances.”

Many Palestinians are wary of this project, a point raised by a recent Al Monitor article. Moreover, Rawabi’s is just one of hundreds of Palestinian water infrastructure projects currently under consideration of the JWC, which has not met in four years. Nevertheless, foreign governments are taking an interest in this project’s success.

A United States Congressional staffer told +972 that toward the end of August, Congressman Eliot Engel (D-NY), the ranking minority member of the House Foreign Affairs Committee communicated to the “highest levels of the Israeli government [his] wish to see the project completed.” This message was conveyed on the heels of a meeting between Congressman Engel, U.S. diplomats and Masri, in which the developer explained that if the apartments are not delivered that the Qatari Diar Group would withdraw from the project.

Israeli Prime Minister Benjamin Netanyahu meets with U.S. Rep. Ed Royce (Left) and U.S. Rep. Eliot L. Engel (Right). (Photo by Kobi Gideon/GPO)
Israeli Prime Minister Benjamin Netanyahu meets with U.S. Rep. Ed Royce (Left) and U.S. Rep. Eliot L. Engel (Right). (Photo by Kobi Gideon/GPO)

An exercise in soft power

Joseph LeBaron, former U.S. Ambassador to Qatar and Vice Chairman of the Daruna Real Estate Development Company in Qatar told +972, “[Rawabi is] evidence of the way that this kind of investment – not money per-se but investment—is an element of Qatar’s foreign policy and an important one.”

“The misconception is that Qataris only deal with Hamas—but they deal with everyone,” Michael Stephens, a scholar at UK think tank Royal United Services Institution (RUSI), explained to +972. Indeed, while Qatar provides material and political support to Hamas, Mahmoud Abbas and the Qatari royal family nevertheless maintain close and strong ties, according to Stephens. This isn’t the first major infrastructure investment the Qataris have made in Israel-Palestine: the Qatar Foundation, in a joint project with the Israeli government, funded “Doha Stadium” in Sakhnin, a Palestinian city of 25,000 inside Israel proper.

Rawabi was likely not a carefully calculated political decision meant to deepen its involvement in the political process in Israel-Palestine, according to LeBaron. Stephens, however, sees a political benefit to the emirate, which this summer was courted by U.S. Secretary of State John Kerry as a mediator for a ceasefire between Israel and Hamas.

“Real estate investments tie into larger notions of Qatari soft power,” Stephens said. Investing in a project like Rawabi, he explained, is about regional legitimacy, and the need for any aspiring regional power to be a leader in the Palestine issue.

The Qataris’ reconsidering their role in funding this project, then, may suggest a fear in the viability of non-ideological investments in Palestine.

A construction worker at Rawabi. (Photo by Yotam Ronen/
A construction worker at Rawabi. (Photo by Yotam Ronen/

A Western diplomat who deals with economic development issues in the Palestinian territories said, “The failure of Rawabi would be the failure of any future large scale investment [in the West Bank], at least in the next five to 10 years.” Investors with an eye on Palestine would see how even a large-scale project, with broad international support, can get tangled and defeated in the political process. In such circumstances, they would be rightfully skittish, according to this diplomat.

In Weissglass’ view, more foreign pressure is needed. “I’m not aware of any communication [between U.S. and Israeli officials],” said Weissglass, “but if such a simple problem has not been solved yet then it indicates that the communication was very floppy.”

While Israel-Palestine may have drawn high-level American interest during Israel’s most recent operation in Gaza, the American-led airstrikes against ISIS in Iraq and Syria makes Weissglass’ solution a near impossibility.

“I would like to see Rawabi worked out, and I think that its time that it should be done,” said Ambassador Ross. Nevertheless, “There’s a certain amount of bandwidth [and] you can see where the president is consumed right now,” explained Ambassador Ross. “To think that this will get high level attention—it doesn’t deal with what I call the bandwidth reality.”

Ben Drusinsky contributed to this report.

The author is a journalist and student. Follow him on Twitter at @shermancoreya and on Instagram at @cs_herman.

To read the article in Hebrew on +972’s sister site, Local Call.