Middle East Research and Information Project: Critical Coverage of the Middle East Since 1971

Palestine today is increasingly subject to two urban forms of colonization. One form is produced by Israeli settler-colonialism while the other, newer form, is produced by neoliberal capitalism. While the two forms are distinct—each has its unique history and primary drivers—they both work in ways that reinforce and solidify the other’s hold on the terrain.

The most visible and intrusive urban form of colonization on the Palestinian landscape is the vast expanse of illegal Israeli hilltop settlements implanted throughout Palestinian territory under Israel’s military occupation of the West Bank following the 1967 Six-Day War. Jewish settlement in the West Bank began as a messianic project informed by the logic of settler-colonialism adopted by early Zionism—which seeks to replace an indigenous population with settlers from the colonizing entity. In the 1970s, the Israeli militarist and later Prime Minister Ariel Sharon transformed the settlement movement into a state colonization project when he became head of the government’s settlement committee in the Occupied Territories. He began applying his “defense in depth” strategy, which he had developed during Israel’s military campaigns in the Sinai, to the planning for Israeli civilian settlement expansion.[1] Each settlement location was chosen according to a strategic military logic to form a network of fortifications that would disrupt and bisect the preexisting network of Palestinian communities.

The settlements that circle and crisscross the hilltops and valleys of the West Bank typically consist of large gated residential communities—often with swimming pools and shopping malls—and also serve as “optical devices on a suburban scale” in order to surveil and visually remind Palestinians on a daily basis of their domination.[2] In conjunction with the massive Israeli wall and fence barrier that pushes deep into the West Bank and Jewish-only bypass highways and hundreds of checkpoints throughout the territory, the settlements are one piece of the spatial regime of incarceration that dominates the Palestinian population’s space and movement.

Less visible is the emergence of a new urban form of colonization through a multitude of private Palestinian urban development projects that are advancing across the Palestinian countryside and are urbanizing the remaining agrarian land at an unprecedented scale. These projects often take the form of suburban tract housing, mixed-use suburban developments and semi-privatized spaces of consumption such as shopping malls. This urban form of colonization is driven by global, and particularly neoliberal, capitalism. The most grandiose of these projects to date is the planned city of Rawabi, which is located north of Ramallah and is expected to house a population of around 40,000. Rawabi is the first private, master-planned, mixed-use city in the West Bank. The primary agents of this urban form of colonization are Palestinian capitalists and elites backed by the Palestinian National Authority (PA). They are linked to broader regional and global financial networks and interests, including multinational business “action tanks,” global project management firms and the Qatar Investment Authority (QIA).

Although Rawabi and private Palestinian urban development projects have been presented as an assertion of Palestinian “state-building” and local agency—and even as part of a broader path towards “peace” with Israel—these projects do nothing to challenge Israel’s spatial regime of settler-colonial occupation and are instead compliant and subordinate to it.

The social relations of settler-colonialism and neoliberalism are not mutually exclusive and, in this case, work in complementary ways, so that transnational capitalists and the Israeli settlement regime are both able to solidify their hegemony over Palestinians. They both employ a variety of strategies that critical geographer David Harvey refers to as “accumulation by dispossession.”[3] They exploit the existing, often inequitable, political and economic networks at their disposal to accumulate profit or territory. Rawabi is an exemplary material manifestation of this new form of neoliberal urbanism, a neoliberal McCity that ultimately does little to address Palestinians’ most immediate and salient social issues—unemployment, poverty, food and water insecurity—or their struggle for liberation from Israeli occupation.

The Emergence of the Palestinian McCity

The emergence of this new form of urban colonization alongside Israel’s settler-colonialism is indicative, arguably, of a third wave of spatial transformation in Palestine since early Zionist settlement at the end of the nineteenth century. The first major transformation of Palestinian space was the 1948 Palestinian exodus, or Nakba, when Zionist forces took over large swathes of Palestinian land to establish the State of Israel. The Nakba not only shattered Palestinian space by dislocating Palestinians from their urban centers and villages, but it also shattered the social fabric through their expulsion to other villages, countries and refugee camps. Palestinian space was again dramatically transformed when Israel conquered and occupied Jerusalem, the West Bank and Gaza Strip during the 1967 war. Israel transformed Palestinian space by appropriating over 50 percent of Palestinian land in the Occupied Territories, creating a colonial frontier that is “deep, shifting, fragmented, and elastic” through a series of unilateral military practices and settlements.[4] The West Bank has also been used as a testing ground and laboratory for Israeli-made weapons, military strategies for occupation, policing, surveillance and for its own economic and neoliberal policies.[5]

But over the past few decades, the West Bank has also become a laboratory for the new production and arrangement of Palestinian urban space. This third wave of spatial transformation is most visible in the recent proliferation of Palestinian private urban development projects across the West Bank, such as Rawabi. This still unfolding spatial transformation began when the Oslo Accords of 1993 led to the establishment of the PA and opened up the West Bank to global capitalism.

Since then, Palestinian development has been increasingly informed by the processes and practices of neoliberalism under colonial occupation. Unlike the Israeli settlement project, Palestinian developers have had to negotiate around Israeli spatial and permit restrictions in their efforts to create a space for the emerging Palestinian capitalist class and elites to live and work. For example, Rawabi’s developer has built an urban center so that the residents of Rawabi are not obligated to leave the city in their daily routine to confront Israel’s restrictive organization of Palestinian space, hence, Rawabi’s motto: “a place to live, work, and grow.”

Neoliberal doctrine promotes the privatization of public assets and free market solutions to public issues to enable the consolidation of class power through a redistribution of wealth upwards to the capitalist class. As a radical form of capitalism, neoliberalism is not concerned with human well-being or creating suitable living environments for people, but instead creates new strategies of capital accumulation through the extraction of wealth from the working and middle classes. Neoliberal urbanism creates cities that are highly surveilled, controlled and homogenous. By prioritizing capitalist speculation and consumption, developers seek to create a built environment where every social interaction in the city is reduced to a monetary transaction.[6]

Following Oslo, the process of opening up the Palestinian economy to foreign investment and private sector development accelerated when Palestinian President Mahmoud Abbas appointed Salam Fayyad as prime minister in 2007. As a former employee of the World Bank and International Monetary Fund, Fayyad’s plans for institutional reforms and national development—such as the Palestinian Reform and Development Plan (PRDP) presented at the 2007 Paris Donor Conference and subsequent national plans—paved the way for neoliberal development. The reforms were meant to lead to a Palestinian state, but only if Palestinians could first achieve good governance, economic growth and security, known as the “state-building narrative.” This shift coincided with Israeli Prime Minister Benjamin Netanyahu’s proclaimed “economic peace” strategy, which promoted economic collaboration between Palestinian and Israeli businesses.

Neoliberal doctrines have been embraced to such an extent that they can be found in nearly every aspect of the Palestinian economy, such as real estate development, financial and banking services, the public sector, tax collection, security, education and telecommunications. The national development plans and institutional reforms implemented since 2007 have cleared the way for numerous housing projects scattered throughout the areas controlled by the PA and those controlled jointly by the PA and Israel (areas A and B respectively) of the West Bank. Along with small-scale projects such as Reef, al-Reehan, al-Ghadeer, al-Jinan, al-Worood, Surda Hills, Birzeit Heights, Etihad Villas and Moon City, other larger projects on par with Rawabi have been proposed such as the Jericho Gate project and a master plan to redevelop the entire Gaza Strip.

Since Palestinians lost their urban centers in 1948, there is no contemporary indigenous model for how Palestinians can or should urbanize. The developers of Rawabi seek to fill this void by advancing their own conception of urbanism, which is a design paradigm based on liberal free market solutions. The result is the emergence of the McCity.[7] In short, the central feature of the McCity is that it is a master-planned, neoliberal tract city that has been built upon a clean slate. What makes this development paradigm different from other types of tract housing projects is its scale and the new urban form that it embodies—it is not creating a subdivision or gentrifying a neighborhood, it is building an entire city. The developer’s intention is that once Rawabi has been tried and tested, this prototype will be replicated throughout the West Bank ad infinitum.

While some design aspects of previous urban planning movements can be observed in Rawabi’s form (such as modernism, new urbanism and new town planning) it is primarily a manifestation of a type of urbanism called catalytic development that has been touted in recent years by Washington, DC think tanks and social entrepreneurs. Rawabi’s urban form ultimately conforms to a type of internationalized development that is oriented toward rent extraction and other methods of capital accumulation like high-end consumption, entertainment and tourism. As a completely privatized city, Rawabi has achieved neoliberalism’s endgame by giving the developer hegemonic control over all operations, networks, modes of governance and economic activity within the city.

Transnational Capitalist Networks

Rawabi is located nine kilometers north of Ramallah and its municipal boundary encompasses 1,560 acres of land. It first broke ground in early 2010 and construction is still ongoing, despite facing multiple delays. Rawabi only has a few thousand residents, but is expected to eventually house a population of about 40,000. While the initial costs for Rawabi were projected in 2008 to be around $350 million, they have now risen to $1.4 billion, which makes it, by far, the largest private sector real estate project in the West Bank.

The Rawabi urban development project was conceived in 2007 in close collaboration between Palestinian-American entrepreneur Bashar Masri and a British “action tank” (as opposed to a think tank) called The Portland Trust, which has offices in London, Ramallah and Tel Aviv. The Portland Trust played a crucial role in the realization of Rawabi by lobbying support for the project from both the Israeli government and the PA. Additionally, it was through The Portland Trust’s chairman, social entrepreneur Ronald Cohen, that Masri was introduced to architect Raffie Samach, who worked at the US-based firm Architecture, Engineering, Construction, Operations, and Maintenance (AECOM). Through this connection, AECOM, in collaboration with professionals from the Palestinian universities Birzeit and an-Najah and Masri’s in-house team of architects, created the Rawabi master plan—all of which was funded by The Portland Trust.[8] The Rawabi project was then proposed at the 2008 Palestine Investment Conference in Bethlehem, presided over by Prime Minister Salam Fayyad. The message of the conference was “you can do business in Palestine.”

In order to finance Rawabi, Bashar Masri collaborated with Qatari Diar Real Estate Investment Company. Diar is the real estate branch of the Qatari government, which falls under the auspices of the Qatar Investment Authority and is overseen by the Qatari Minister of Finance. Masri’s company, Massar International, and Diar came together to form Bayti Real Estate Investment Company, which is the development company overseeing the planning and construction of Rawabi. Even though Masri is the public face of the project, and Massar is financing a small portion of the project, it is Diar that is the main benefactor as it is financing nearly all of the construction costs.

Like other Gulf states, Qatar is dealing with the problem of capital overaccumulation from its oil and gas revenues by embarking on a real estate construction binge. Diar, founded in 2005 and capitalized at $4 billion, has taken on numerous luxury construction projects throughout the world. The centerpiece of its investments is the $45 billion flagship project of Lusail City in Qatar. By the time Qatar hosts the 2022 World Cup, Lusail is projected to have capacity for 260,000 residents. While the $1.2 billion Diar has tied up in Rawabi may be a significant injection of capital for the West Bank economy, this project is financially inconsequential for Qatar when seen within the grander scope of Diar’s investment portfolio. Moreover, Diar’s investment in Rawabi unquestionably plays a role in Qatar’s foreign policy objectives and its assertion of soft power. If Qatar has the political will, Diar will see the project through regardless of its profitability.

Israeli and Palestinian State Support

Along with transnational capitalist networks, states also facilitate capital flows to support neoliberal urban development projects. The support for these projects in Palestine has largely come from the PA and Israel, as well as from the United States. While the PA initially promised $140 million for Rawabi’s infrastructure and public buildings through a 2008 public-private partnership signed with Bayti, it has yet to deliver. Despite this, the PA has helped bring the project to fruition in ways that do not incur a direct cost to its budget, but were nonetheless vital for the project to succeed. The PA has used its bureaucracy to facilitate obtaining permits and approvals for Rawabi. For example, the land for the project was carved out of territory located mostly in area A of the West Bank from the three surrounding villages of Ajul, Abwein and Attara. In a few years time, Masri was able to obtain 1,560 acres (6,300 dunums) of land. Although he was unable to purchase the land from private owners, an unprecedented 2009 eminent domain decree issued by Abbas allowed him to acquire the rest through expropriation. In the same year, the PA also approved Rawabi’s master plan.

In 2013, the PA approved the establishment of the Rawabi municipality, which allows Bayti to control zoning, tax collection and the city budget, among two dozen other privileges.[9] The municipal council was appointed (not elected) by Bayti and consists of members from the public and private sectors. The only legal standing for the creation of such a municipality, in a city without residents, is a broad interpretation of a 1997 law on municipalities. Municipal status is generally granted only after a population reaches a certain threshold, which is then classified A, B, C or D according to the number of inhabitants. Therefore, the granting of municipal status to Rawabi, before the city had any residents, is unprecedented in Palestinian history.

Masri has also worked closely with Israel. Despite contrary claims in numerous interviews with Masri, Rawabi’s emergence does not defy the occupation, but is a project that acquiesces to its demands. Israeli suppliers are by far the main recipients of the capital expended on Rawabi so far. While Masri has gone to great lengths not to disclose his Israeli suppliers, he claims he does not use any materials or products made in Israeli settlements. Even so, at the height of Rawabi’s construction, up to 95 percent of materials and supplies were being imported, upon which Israel collects import taxes. Additionally, according to the former deputy managing director of Rawabi, Amir Dajani, approximately $80 to $100 million was spent annually on Israeli suppliers.

While Rawabi has received some funding from US development agencies, the most significant American contribution to the project is the creation of the Affordable Mortgage and Loan program, known as AMAL. This US government-backed for-profit mortgage company was created in 2008 to support a spree of sizeable housing projects that were being developed in the West Bank, including Rawabi. The goal of this program is to encourage Palestinians to move into the housing projects by taking on American-style mortgages. The creation of AMAL was necessary because Rawabi’s housing prices are too high for the average Palestinian. While it has yet to be seen, AMAL potentially stands as being the second largest beneficiary of Rawabi after the Israeli suppliers.

The Politics of Neoliberal Urbanism

Since the 2008 Bethlehem conference, Rawabi has been presented to the public as supporting the state-building initiative that the government set out to accomplish during Fayyad’s tenure as prime minister. The narrative of state-building is a repackaging of Fayyad and Netanyahu’s “economic peace” initiative in a way that is easier for Palestinians to accept: Becoming willing participants in “state-building” is more palatable than economic collaboration with Israel. Not only does the state-building narrative open up new and larger avenues of accumulation for Palestinian and Israeli capitalists, but prioritizing state-building over other concerns also serves as a justification for undemocratic practices around the West Bank. The eminent domain decree issued by Abbas and the approval of Rawabi’s municipality and municipal council are perhaps the most startling examples of this to date.

Moreover, by prioritizing and facilitating Rawabi, the PA has stifled growth in other parts of the West Bank at a great cost to ordinary Palestinians who cannot afford to live in Rawabi. While there is no wall or fence that encases the entire city, other subtler means have been used to achieve separation. In acquiring six times more land from private owners than what it needs for the first phase of the project, Bayti has de facto created a boundary of separation from the surrounding villages. Then, to solidify this boundary, Bayti succeeded in obtaining municipality status from the PA and thus was able to inscribe a wide municipal boundary around the project. By using the existing, and inadequate, legal system to create a new municipality, the developer was able to effectively restrict the future expansion of the neighboring villages.

In addition to Rawabi benefitting Israel economically, Masri has done little to challenge Israel’s spatial regime of control or the structural inequalities of the military occupation. He built the project in areas A and B, not C (Palestinian areas controlled solely by Israel), he asked the Israeli state for permission to use Jewish-only roads during the project’s construction and it was Netanyahu who decided to appropriate more water for Rawabi as a quid pro quo that also gave Israeli settlements more water.[10] The Palestinian Boycott, Divestment, Sanctions (BDS) movement has called Masri’s activities with Israel “a shameless act of normalization of the worst type.”[11]

The state-building narrative emerged shortly after the second intifada and the subsequently annulled 2006 Palestinian Legislative Council elections. With the emergency appointment (not election) of Salam Fayyad as prime minister, the state-building narrative took on a “carrot and stick” approach that Israel routinely uses on the Palestinian population. That is, if Palestinians choose to directly confront the occupation, they will be crushed as they were during the second intifada. It has been well documented that the PA security forces have played an active role in suppressing resistance to the occupation by acting as Israel’s security subcontractor in the West Bank.[12] Therefore, projects such as Rawabi function to incentivize Palestinians to debt-finance an apolitical upper-middle class lifestyle for themselves while forgoing any attempts at real political change.

Rawabi’s Contradictions

Rawabi offers an illusory hope of a better future for Palestinians. It suggests that Palestinians are in control of their own future, something unattainable before the establishment of the PA. Unfortunately, this control is only granted to the Palestinian capitalist class and political elites, and then only in the realm of capital accumulation and lifestyle. Alongside Israel’s relentless colonization of ever more territory, this neoliberal form of urbanization leaves a majority of the Palestinian population powerless and in even less control of their lives and their environment than at any other time during the Palestinian-Israeli conflict.

Moreover, the current wave of Palestinian urban development reinforces Israel’s spatial fragmentation of the West Bank by only building in places that Israel allows. While Israeli settlements and Palestinian urban development projects are racing to settle the hilltops of the West Bank and reshaping the landscape in their own image, this uneven and unequal development inevitably disadvantages the majority of Palestinians. The modicum of space that remains for future Palestinian growth in areas A and B is simultaneously being eaten away by development projects undertaken by Palestinian capitalists and by Israeli settlement expansion.

The possibility for the average Palestinian to have any control over how their space is transformed becomes slimmer with each passing day. Instead, Palestinians are left concerned with how to repay their financial obligations in order to maintain a certain lifestyle based on debt or how to merely hold on to what they already have. While Rawabi may seem like a space of hope for some Palestinians seeking social mobility, it will ultimately become a site of conflict once its contradictions become more pronounced over time.  ■

 


Endnotes

[1] Eyal Weizman, Hollow Land: Israel’s Architecture of Occupation (London: Verso, 2007) p. 63.

[2] Ibid, pp. 81-82, 131.

[3] David Harvey, A Brief History of Neoliberalism (Oxford: Oxford University Press, 2005).

[4] Weizman, Hollow Land, p. 4.

[5] David Lloyd, “Settler Colonialism and the State of Exception: The Example of Palestine/Israel,” Settler Colonial Studies 2/1 (2012).

[6] Ozan Karaman, “Urban Neoliberalism with Islamic Characteristics,” Urban Studies 50/16 (December 2013).

[7] Sami Tayeb, Manufacturing the McCity: A Case Study of the Rawabi Urban Development Project in Palestine, M.A. Thesis (American University of Beirut, 2017).

[8] Arthur Segel, Sarika Agrawal, Nimrod Brandt, et al., “Rawabi,” Harvard Business School Case Study (2014).

[9] Aude Signoles, “Local Government in Palestine” Focales 2 (October 2010).

[10] Jan Selby, “How Did Rawabi Get its Water?,” Middle East Monitor, September 16, 2015.

[11] BDS Movement, “Palestinian Civil Society Denounces Bashar Masri’s Normalization With Israel as Undermining the Struggle for National Rights,” Palestinian BDS National Committee, September 10, 2012.

[12] Jessica Purkiss and Ahmad Nafi, “Fact sheet: Palestinian Security Cooperation with Israel,” Middle East Monitor, October 2015.

How to cite this article:

Sami Tayeb "The Palestinian McCity in the Neoliberal Era," Middle East Report 290 (Spring 2019).
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