Public Contracts during the Mandate

During the period of British colonial rule over Palestine (1917–1948), a series of major contracts were awarded to Zionist enterprises. These contracts constituted a central component of the Zionist project, allowing it to gain control of Palestine’s most lucrative natural resources, industrial production, and the provision of essential services—a decisive factor in the Zionist Movement ’s conquest of Palestine in 1948. Far from a neutral arbiter, the British regime began its rule over Palestine with a clear plan to award such contracts to Zionist enterprise as part of its wider approach to “colonial development.”

From Moses Hess to Theodor Herzl , early Zionist thought is saturated with visions of Jewish industry and exploitation of natural resources. As British policy makers contemplated the imperial conquest of Palestine during World War I , this strand of Zionist thought presented itself as the perfect ally for realizing Britain ’s goals on the ground. Much has been made of the Balfour Declaration as a political document, with its pledge to establish a “Jewish national home” in Palestine. Less discussed is the wider enthusiasm underpinning the declaration for Zionism to be a driver of “colonial development” —a term denoting the exploitation of a colony’s natural resources to feed Britain’s imperialist needs. During World War I, a new generation of imperialists rose to positions of influence in the British government. The likes of Leo Amery , Alfred Milner , Mark Sykes , and William Ormsby-Gore urged Britain to enact a more coordinated form of colonial development, and they saw European Jews as the ideal partners for exploiting the “untapped riches” on offer in Palestine. It was these “new imperialists” that drove forward British colonial policy after the war, ensuring the partnership with Zionism became reality on the ground.

Zionism as an Agent of British Imperialism

Embedded in Britain’s approach to colonial development in Palestine was a well-established racialized hierarchy that saw Jews as industrious and productive “middlemen” of empire, while Arabs were viewed with patronizing disdain as “backward” and “traditional.” As Winston Churchill affirmed when defending the decision to award a major electricity contract in Palestine to a Jewish enterprise in 1921: “The Arabs of Palestine would not in a thousand years have taken effective steps towards the irrigation and electrification of Palestine.” This racially based preference for Jewish enterprise in Palestine eventually made its way into the terms of the British Mandate itself, ratified by the League of Nations in July 1922. Article 11 stipulated: “The [British] Administration may arrange with the Jewish [A]gency . . . to construct or operate, upon fair, and equitable terms, any public works, services and utilities.” No such provisions were made for the majority Arab Palestinian population.

As the British Mandate got underway, a spate of development contracts was farmed out to Zionist enterprises, allowing Britain to focus its colonial expenditure on security, infrastructure, and policing. Colonial officials posted to Palestine often remarked on the unjust nature of the arrangement, reporting to superiors in London that British policy was stirring increasing unrest among the Arab Palestinian population. Policy makers in London, however, remained wedded to the idea that European Jews were best suited to serve as Britain’s agents of development on the ground. As a new network of British imperial infrastructure was built across the Middle East —ports, railways, and oil pipelines—policy makers in the Colonial Office insisted that Zionism would turn Palestine into a model of imperial modernity.  

Haifa as the Nexus of Colonial Development

Early in the British Mandate, the coastal city of Haifa became the focal point of colonial development in Palestine. By the early 1930s, the city was the site of Britain’s biggest imperial harbor in the Middle East as well as the Mediterranean outlet of the oil pipeline that ran from the oilfields of northern Iraq . Originally an Arab Palestinian town, Haifa quickly became the object of Zionist ambitions as developers flocked to the harbor in search of British contracts.

As Haifa expanded in the 1920s and 1930s, Jewish entrepreneurs worked in close consultation with British government planners. Zionist developers saw the value of their assets rise considerably when the government authorized the construction of the new oil refinery site in the Bay Area . Land in this part of the city was primarily owned by Jewish organizations—the Haifa Bay Development Company , the Jewish National Fund , and the Bayside Land Corporation . The opening of the refinery in 1939 provided a major boost to these developers, and the Bay Area’s transformation into the city’s principal industrial zone became a Zionist-led process, later proving crucial for the Zionist takeover of the city in 1948.

Elsewhere in the city, Jewish industries like the Nesher cement factory were indispensable to the execution of Britain’s imperialist projects. Founded in Yagur in the outskirts of Haifa by the Jewish entrepreneur Michael Polak in 1923, the Nesher factory provided a vital local source of cement for the construction of the harbor and its surrounding development. In a similar vein, the Jewish construction company Solel Boneh was contracted for a number of government building projects in Haifa, including the new system of roads and bridges that fed into the harbor. Founded in 1921 by the Jewish labour federation (the Histadrut ), Solel Boneh became the largest construction firm in Mandate Palestine , building bridges, airfields, and army bases all over the country, as well as in other British-controlled territories such as Iraq, Egypt , Cyprus , and Bahrain .

All elements of Haifa’s industrial complex were dependent on the production of electricity. To this end, the Palestine Electric Company , run by Russian-Jewish entrepreneur Pinhas Rutenberg , was a crucial component in the city’s expansion. Receiving his controversial electricity concession from the Colonial Office in 1921, Rutenberg opened the flagship Naharayim hydroelectric power station in 1930 at the confluence of the Jordan and Yarmuk rivers. But the bulk of his electricity provision came from contracts he received from the British government for smaller, diesel-fired power stations in Palestine’s largest population centres, including Haifa in 1925.

Rutenberg’s monopoly over electricity production in Palestine was the subject of vociferous complaints by Arab Palestinians, all of which were dismissed outright by the British government on the grounds that only European Jews could drive forward the country’s modernization. In Haifa, Rutenberg’s Palestine Electric Company was present at every stage of the planning and construction of the harbor and surrounding development, supplying the power for all works carried out during the 1920s and 1930s. By 1934 Rutenberg had established a much larger plant, known as Haifa A , in the northeast of the Bay Area, built by the Solel Boneh construction company using Nesher cement. Towering above the city’s industrial zone with its red and white striped towers, this vast structure stands today as an administrative center of Palestine Electric Company’s successor company, the Israel Electric Corporation —a testament to Zionism’s enduring partnership with British imperialism.

The Dead Sea Development

A vital component of the British-Zionist drive to exploit Palestine’s natural resources was the Dead Sea . Having long eyed the area as a potential source of industrial minerals, the Colonial Office once again decided to farm out its development plans to a Zionist enterprise, this time awarding a concession to another Russian-Jewish entrepreneur, Moshe Novomeysky . In 1931, Novomeysky’s Palestine Potash Ltd began its industrial extraction of minerals from the lake, producing potash for fertilisers and bromine for motor oils. Novomeysky’s concession application was greatly aided by the close ties between Zionist science and the British imperial government, and in particular the support of Chaim Weizmann , leader of the Zionist movement in London and future president of Israel. Across Europe and the United States , the Zionist movement recruited numerous Jewish scientists and industrialists, helping strengthen the movement’s credentials among governments around the world. Aaron Aaronsohn , Yeshayahu Leibowitz , and even Albert Einstein can all be grouped in this category. In the United Kingdom , Weizmann was known for his work as a chemist at the University of Manchester , leading him to be recruited during the Allied campaign of World War I as director of the British Admiralty laboratories. Weizmann went on to play a central role in promoting Zionism to the British government, including Novomeysky’s Dead Sea concession, which he ranked as one of the most significant Zionist achievements: “Nahalal , Deganiah , the University , the Rutenberg electrical works … the Dead Sea Concession, meant much more to me politically than all the promises of great governments or great political parties.”

From the beginning, the Dead Sea concession was widely opposed by Arab Palestinians. In the 1920s and 1930s, sovereignty over natural resources was a key part of Arab national demands in Palestine and elsewhere in the Middle East. As seen in the front-page cartoon of the newspaper Filastin (2 November 1932), Britain’s awarding of contracts to Zionist enterprises was a central point of contention for Palestinian intellectuals and activists. The cartoon caricatures on a map of Palestine the ten greatest “woes” (waīlāt) caused by Britain’s support for Zionism, including the Rutenberg electricity project (top left), the Jewish factories of Haifa (bottom left), and a colonial official representing the British Empire (middle left). Clearly marked at number six in the top right-hand corner of the map is the Dead Sea project. As the Arabic caption explains, “the Jewish Tulloch and Novomeysky company […] has taken the concession for the extraction of salt and minerals and the treasures contained within them!”

Despite a barrage of international and local protests over the Dead Sea concession, Britain ploughed ahead with Novomeysky’s project. Several alternative schemes were put forward by Arab-led enterprises, all to be rejected by the British colonial regime. These included local Palestinian businessmen, Ibrahim Hazboun , who had initially been encouraged by the British to continue his Dead Sea transportation company in the expectation he would later be awarded a concession to extract minerals from the lake. Like countless other Palestinian entrepreneurs, Hazboun was quickly discarded once a Zionist proposal was formalized.

The value of Zionist enterprise to British imperial interests was quickly realised during World War II when Novomeysky’s Palestine Potash Ltd became a major supplier of essential raw materials for Britain’s wartime effort. Constituting Britain’s largest supplier of both potash and bromine, Palestine now ranked fifth in the overall list of chemical exporters to Britain, thanks to the Dead Sea. Meanwhile, Haifa stood as Britain’s largest naval base in the eastern Mediterranean, the center of its Middle Eastern rail network and the coastal outlet for Iraqi oil. Often overlooked in histories of political conflict, Zionism had to a large degree repaid Britain’s early faith, building a web of colonial development that protected British interests while marginalising the indigenous Palestinian population.

At the political level, the British-Zionist partnership had broken down by the end of World War II, with Britain eventually relinquishing its Mandate over Palestine in May 1948. But the economic alliance between Zionism and the British Empire would prove an enduring asset to the newly formed state of Israel. During the war of 1948–49, Zionist control over Palestine’s key natural assets, as well as its essential infrastructure, was a crucial factor in the defeat of the Palestinian resistance. It was not by chance that Zionist forces were so heavily concentrated in Haifa, allowing Israel access to the city’s oil refineries, Palestine’s biggest harbor, and the central hub of the country’s rail network. The Dead Sea development, meanwhile, lay in ruins by the end of the war, but it was not long before Israel re-established Palestine Potash as the Dead Sea Works at the southern end of the Dead Sea, forming a vital source of raw materials for the Zionist state’s military–industrial complex. What had started as an alliance between British imperialism and the nascent Zionist movement had now provided the economic foundations for Israel’s ongoing colonization of Palestinian lands.