Palestinian developer builds city of dreams, but will they come?

Before Manar Imad and her family moved into a new three-bedroom apartment here, a relative balked. “My brother-in-law said, ‘You are going to a ghost town. It has no shops. It’s empty,’ ’’ laughs Ms. Imad. 

“It’s true that when we moved in it was empty, but now it’s a growing city. Day after day it is filling up with people and shops. It’s a great city,” she says. 

The reality lies somewhere in between.

Rawabi, a $1.2 billion mega housing project five miles north of Ramallah, is the first-ever Palestinian planned city and was originally feted as a building block for a future state. But Israeli red tape delayed approval for roads and access to water, and it took six years from breaking ground for the city to welcome the first intake of residents, including Imad and her family. 

Now comes a moment of truth for the Palestinian city of dreams: how to lure businesses and tens of thousands of middle-class residents to make the move, transforming the hilltop project from a construction site into a breathing city. 

Rawabi's promise is a modern community with its own cultural institutions, shops, and jobs. But it requires that socially conservative Palestinians leave their traditional West Bank neighborhoods of extended families and move into a new city that mixes people from varying clans and cities of origin.

The test comes at a time when the prospects for Palestinian statehood seem to have receded completely, and violence has caused an economic slowdown.

In the half year since Rawabi opened to residents, home sales have been slow; several businesses that were planning to open up have gotten cold feet. The project has even stopped advertising. 

Today, the stone-paved streets of Rawabi’s first neighborhood are lined with small shrubs, street lamps, and even public exercise machines. But after dark, light emanates only from the windows of lone apartments amid a canyon-like row of darkened residential buildings.

At a Roman-style amphitheatre the seating has been completed, but construction is incomplete on school buildings, a medical clinic, and the town’s commercial center.

Bashar Masri, the Palestinian business mogul behind Rawabi, says the initial “euphoria” for the project was lost during years of construction delays. In the last few months the economic climate has become even more challenging, he says, because a wave of violence with Israel has made buyers and businesses more risk averse.

“People are not as excited. It’s difficult for people to be happy when they are surrounded by sadness,” he says. “Coming to buy a house is a huge endeavor. It’s a risk to change your life, and people don’t like to do it unless they are totally comfortable. And they aren’t comfortable at all.”

Earlier this month, the Israeli military imposed a one-day closure around Ramallah in response to an attack, highlighting the inconvenient location of a security checkpoint on the road from Ramallah, the hub of economic life in the West Bank, to Rawabi's hilltop location.

A national project

Rawabi bills itself as a national project. A brochure waxes patriotic about Palestinian flags that fly above the buildings “in stark contrast to a predominant attitude of acquiescence, a sense of powerlessness, and a fear that we have not managed to accomplish anything of significance.”

The city embodies the state-building philosophy championed by former Palestinian Prime Minister Salam Fayyad, who argued that Palestinians could still build an effective government and economy under Israel’s military occupation. The argument is that economic development can be a form of resistance to Israel and boosts international support for statehood. 

Even though peace negotiations are nowhere in sight, Mr. Masri insists: “A Palestinian state is in the making. It’s not whether we will have a state or not, it’s when we will have a state.”

“We’re not going to wait for the day that the right parameters are in the right place to sign an [peace] agreement. We the people will continue to build and make our lives better, and our economy better.”

But critics say the project plays into an alleged Israeli strategy to quench Palestinian aspirations with economic development rather than full statehood. 

Rawabi “is part of the Israeli strategy of economic peace,” says Tariq Dana, a policy adviser at Al Shabaka, a Palestinian think tank. “Ultimately, Israel remains in control over the territory.’’

Financed with hundreds of millions of dollars from a Qatari government investment fund and Masri’s conglomerate, Masaar International, builders have so far completed work on 1,300 of 5,000 homes slated for the project.

Half the completed units have been sold, though that’s roughly the same number as had been reported two years ago. So far, according to project officials, 200 families have moved in. Residents and officials predict that the planned opening of a local school in September will spur more arrivals.

“Come back during the summer, and you’ll see how prosperous Rawabi is,” promises Imad, whose husband works in Ramallah as an engineer for Rawabi. The mother of one says she feels more secure in her new neighborhood than she did in her husband’s hometown of Jenin in the northern West Bank, where she worried about street violence and raids by Israel.

A few buildings down, Motaz Al Nimer, 29, a manager at the yet-to-be-opened supermarket, says he was attracted by Rawabi’s promise of a modern style of living, mixing Palestinians from different towns.

“It’s a new environment,” he says. “You have a lot of people who come from different kinds of cities. They come from different backgrounds. I’m from Nablus, my neighbor is from Hebron. I’m with the open-minded people here. It’s a younger generation.”

Competing with ‘old country’

One Palestinian real estate adviser says the distance from Ramallah and the threat of being caught at Israeli checkpoints are deterring potential buyers. “I hear from people that [sales] are not going well,” says Hamza Akel.

He also believes that Palestinians in the West Bank are too rooted to move to a planned community like Rawabi. “We like to live in the old country. All the cities here have their own culture. “People … like what they live in…. You can’t bring them to another social life that will never be.”

Undaunted by detractors and slack sales, Masri predicts that Rawabi will be more sophisticated by mixing Palestinians of different backgrounds.

“I grew up in Nablus, my parents grew up in Nablus, and my grandparents grew up in Nablus. And in the same darn neighborhood. Now we are moving out of this. Wherever you have a melting pot, usually you have a better community,” he says. 

The building project has created as many as 10,000 jobs, and developers hope the city’s businesses will eventually employ 5,000 people. It’s already spurred a smaller housing project closer to Ramallah, and local businessmen say the sheer size of Rawabi will force Palestinian service providers and mortgage lenders to scale up their operations.

“It introduces other sectors to the opportunity of supplying large-scale projects,” says Sam Bahour, a businessman who was the project manager for Ramallah’s first shopping mall. “It’s a disruptive element in the positive sense: that is a value that can’t be underestimated as more Rawabis emerge.’’

Masri says the real success of the project will be measured not in sales but whether it inspires a second and third Rawabi.

“The lesson is that large projects are doable with Palestinian determination and that the occupation is an obstacle, but should not be a deterrent,” he says. “It’s a proof to ourselves that we can build and construct. Destruction is easy, but building and construction is hard.”