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Palestinian Tycoon Brings His Fortune Home
As Munib R. Masri leads visitors around his domed palace, gray-uniformed servants tend the manicured grounds, a Roman-style amphitheater and a glassed-in winter garden perched atop Mount Gerizim, the biblical Mount of Blessings. Some 2,500 feet below lies the West Bank city of Nablus, home to Balata, one of the largest refugee camps in the Israeli-occupied territories, where families scrape by on about $10 a day.
For all the grandeur and wealth on display at his Palladian villa, Masri says he’s committed to improving the lot of his fellow Palestinians – economically as well as politically, Bloomberg Markets magazine will report in its February issue.
Masri is chairman of Palestine Development & Investment Co. (Padico), the largest private investor in the West Bank and Gaza Strip. He’s met with U.S. Secretary of State John Kerry during the latest round of Israeli-Palestinian negotiations, which began in July at Kerry’s instigation.
Masri, 79, is also one of the few prominent figures who regularly confer with both Palestinian Authority President Mahmoud Abbas, who succeeded the late Yasser Arafat, a Masri confidante, and Abbas’ bitter rival, Ismail Haniyeh, the prime minister of Hamas-ruled Gaza.
As part of an effort to keep peace prospects alive, Masri joined forces with Israeli high-tech entrepreneur Yossi Vardi to put together Breaking the Impasse, a group that has grown to include about 300 Palestinian and Israeli business leaders.
Israeli authorities released Tuesday 26 long-serving Palestinian prisoners as part of the talks and Kerry returns to the Middle East Thursday, aiming to get both sides to agree on the contours of a final peace accord. Yet peace is as elusive as ever. Israeli Prime Minister Benjamin Netanyahu has pledged to continue construction in West Bank settlements, prompting the two lead Palestinian negotiators to resign.
Recent polling by the Hebrew University of Jerusalem and the Palestinian Center for Policy and Survey Research shows Israelis and Palestinians alike are skeptical that a final deal can be reached. Time is running short; the negotiations are due to end in April.
“This is our last opportunity for a peaceful solution,” Masri says, his hand grazing a marble statue of Hercules that dominates the stone rotunda of his home. “Otherwise, I am afraid of what comes the day after the peace talks fail.”
Even if they do, Masri has made his mark.
“He’s earned widespread recognition for being a true believer in the Palestinian state and for being committed to it,” says Zahi Khouri, who owns the Coca-Cola bottling franchise in the West Bank. “I envy the energy he devotes to the cause.”
From his base in Jerusalem, former U.K. Prime Minister Tony Blair, who represents the Quartet (the European Union, Russia, the United Nations and the U.S.) in the peace process, meets with Masri on official visits to the West Bank.
“It is his combination of resilience, commitment and refusal to bow to the forces of cynicism that makes his work so valuable,” Blair says of Masri.
The youngest of 11 siblings, Masri was born to a well-to-do family in Nablus, where his father was a mukhtar, or town leader. After the establishment of Israel in 1948 led to war with surrounding Arab states, the younger Masri moved to the U.S., earning a bachelor’s degree in petroleum geology from the University of Texas at Austin, where he met his American wife, Angela.
In 1956, he moved back to the Middle East and founded one of the first privately owned engineering companies in the region. The enterprise – now Amman, Jordan-based Edgo Management Group S.A., which operates in 20 countries – started drilling water wells for Dubai and other fast-growing Persian Gulf cities.
He then expanded his business, providing engineering and logistical services for oil companies. For almost four decades, he led a somewhat nomadic existence, settling temporarily in Beirut, Lebanon; Amman, and London.
In the 1970s, as U.S. sanctions forced Western companies to leave Libya, Edgo became the operator of 1,500 oil wells there, pumping 1 million barrels of oil a day, says Maher Jadallah, who now runs the company’s operations in Iraq. Today, Edgo, which Masri fully owns, generates annual revenue of about $250 million and has 500 to 600 employees, according to Jadallah.
Masri holds a 5.1 percent stake in publicly traded Padico, based in Amman. This holding, along with Edgo, give him a fortune of less than $300 million, according to the Bloomberg Billionaires Index.
Masri declines to share details about his wealth.
“The only thing I ask of you is, don’t call me a billionaire,” he says. “I hate it.”
Masri returned home from abroad in 1993, the year the Oslo Accords provided for the creation of an interim Palestinian self-government. Seizing on the optimism of the moment, he put together a group of wealthy diaspora Palestinians to form Padico, then a $160 million partnership designed to erect the economic foundations of a future state.
“He’s very good at rallying others,” says Kamel Husseini, who manages Ellam Tam, a public relations firm based in the West Bank city of Ramallah.
“He’s a wealthy guy, but he uses his wealth to position himself in the greater cause of public service. Not everyone likes it – some people think it’s harassment – but he’s pretty relentless in his networking.”
Padico established the Palestinian stock exchange in Nablus; Paltel Group, the territories’ first telecommunications service provider; a construction company; and a chain of luxury hotels.
“Our vision was that we would function a bit like the Jewish Agency did for Israel, helping to build up the state of Palestine with state-of-the-art companies,” Masri says, referring to the 84-year-old Jerusalem-based not-for-profit organization. “We would come to invest in areas that were seen as undesirable by other investors.”
The Palestinian economy still depends on billions of dollars in aid from the EU, Saudi Arabia, the U.S. and others. Gross domestic product growth was projected to slow to 4.5 percent in 2013 from 5.9 percent in 2012, with the unemployment rate forecast to reach 24.1 percent for all of 2013, up from 23 percent the year before, according to a Sept. 12 International Monetary Fund forecast.
The IMF chided the PA for running up large deficits as donor financing has declined and blamed Israeli restrictions on trade and the movement of people for further crippling the economy.
Mahmoud Darwish, who runs a taxi company in Ramallah, says Masri’s economic and political initiatives have done little to improve the lot of Palestinians.
“He can talk the big talk,” Darwish says, “but Palestinians are sick of promises and declarations when, all around us, we see occupation, poverty and corruption.”
Samir Hulileh, Padico’s chief executive officer, says Masri has put financial considerations aside in his business calculations.
After the militant Islamist group Hamas took over the Gaza Strip by force in 2007, Padico’s board met to decide whether the company would go ahead with construction of a luxury beachside hotel, the ArcMed Al-Mashtal. Hamas is classified as a terrorist organization by Israel, the U.S. and European Union for carrying out deadly attacks on Israeli civilians.
Some board members proposed ending or freezing the project on grounds that the hotel would be a doomed business venture in Hamas-controlled territory.
“He told them, ‘We have to keep the hope alive,’” Hulileh says. “If we were to leave Gaza, what kind of message would that send? For him, Padico is an instrument of change, of growth, for Palestine.”
The hotel, which finally opened in 2011, exemplifies the precariousness of doing business in the Palestinian territories, where rival factions vie for power and the lack of final border agreements with Israel makes it hard to move goods or people.
Its first guests were 150 or so of the 1,000 Palestinian prisoners released that year in a swap with Israel for kidnapped Israeli soldier Gilad Shalit. With its marble lobbies, five restaurants and palm-studded lawns, the hotel rarely reaches capacity.
The perils of business deals in the occupied territories aren’t limited to Gaza, Masri says.
“I don’t make money at all in Palestine,” he says. “I brought money to Palestine. Out of 34 Padico businesses, 30 are losing money because of the difficulties of doing business.”
Masri was introduced to Palestine Liberation Organization chief Arafat in 1963 by Khalil al-Wazir, Arafat’s deputy, who was killed at his home in Tunis, Tunisia, by Israeli commandos in 1988. Masri says three of his six children actively supported the PLO during Israel’s invasion of Lebanon in 1982.
Masri says his grandson, also named Munib, is now in a wheelchair after Israeli soldiers shot him during a 2011 demonstration marking the anniversary of what Palestinians call the Nakba, or catastrophe, referring to their displacement in 1948 as a result of the creation of the state of Israel. While Israel says its soldiers opened fire that day as protesters tried to cross the border, Masri says his grandson was shot in the back after taking part in a peaceful demonstration.
Slender, with blue eyes, Masri belongs to a generation of Palestinians whose parents were wealthy traders and farmers who sent their children off to attend universities from Beirut to Texas.
Today, members of his extended family control businesses throughout the Middle East, Africa and the U.S. Sabih Masri, a cousin, is chairman of Amman-based Arab Bank PLC, Jordan’s largest lender. Bashar Masri, a nephew, runs a real estate company that’s building the West Bank’s first planned city, Rawabi.
Masri credits his success in life to industriousness. “I’m not a good businessman, but I’m a hard worker,” he says. “I work like a donkey.”
Masri says he’s accomplished all of his dreams except one: the establishment of a Palestinian state.
“Before I die, I want to see peace,” he says. “It’s not only the Palestinians that need it. The bonus for Israelis would be immense. They would be able to normalize political and economic relations with more than 20 countries.”
Unfortunately for Masri, that kind of logic doesn’t always get very far amid the passions that inflame the Middle East conflict.
David Wainer, Jonathan Ferziger
The Daily Star