In the West Bank, a $1.4 Billion Bet on Better Times

When Bashar Masri wants a sense of the ebb and flow of Israeli-Palestinian relations, he has two options: He can glance out the window or check his bank statement. Masri’s office overlooks Rawabi, a new town 25 miles north of Jerusalem that’s endured years of delays he blames on the Israeli occupation. And the ups and downs of his bank balance reflect the money backers in Qatar are willing to devote to the project—a barometer of the faith Gulf investors have in the Middle East peace process. “Rawabi was built knowing today’s politics and the high risks involved,” Masri says, sitting at a desk cluttered with maps and blueprints in the prefabricated building where he manages the development.

The project offers stark evidence of the perils of doing business in the occupied territories. Rawabi was conceived in 2010 as a magnet for upwardly mobile Palestinians eager to leave their dusty villages and crumbling cities. It was expected to take five years and cost $750 million to build, but the opening date has been repeatedly pushed back, and the final price tag is likely to hit $1.4 billion, as Masri says he’s battled Israel over water hookups, links to the electric grid, and access for construction vehicles. While violence in the West Bank and war in Gaza have halted construction on several occasions, the goal is to create something that’s “occupation-proof,” says Masri, 56, a scion of a wealthy Palestinian family. He estimates his investors will sustain a $100 million loss if there’s no progress toward peace but could turn a profit if the two sides reach a resolution. “We are building Rawabi to survive under the current difficult circumstances,” he says. “But obviously we hope for better days.”