Munib Al Masri

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Munib Al Masri, Chairman, PADICO Holdings

The Business of Peace: The World’s Richest Palestinian Wants to Break the Impasse
By Maximilian Bleyleben

April 7, 2014

For Munib al-Masri, time is running out. Better known as the “Palestinian Rothschild,” al-Masri built a billion-dollar business empire in the world’s most unpredictable economy. Though he no longer wants to talk about business. “The time for peace is now,” al-Masri said. “If the people don’t press their politicians for a solution, there will be a big catastrophe.”

In an exclusive interview at his hilltop residence outside of Nablus in the West Bank, the most influential Palestinian you’ve never heard of talks about why—at nearly 80 years old—he’s now prepared to risk everything for peace with Israel. “Business people recognise what politicians don’t. If the status quo continues, we will end up with a one-state solution, with an opressed minority, and pariah status for Israel, like South Africa was, with boycotts damaging everyone’s businesses,” al-Masri said.

Munib al-Masri in his new mosque

We settled in to al-Masri’s library, which is filled with antiques he has been collecting over the last half-century. The windowsills are lined with framed mementos of his long relationship with Yasser Arafat, King Hussein of Jordan, Nelson Mandela, among others. Al-Masri is wearing a three-piece suit, giving his tall, lanky frame an air of seriousness, which is quickly dispelled by his deferential humour and well-practiced charm.

Al-Masri’s villa is a spectacular replica of Andrea Palladio‘s 16th-century Rotonda in Vicenza, Italy. It is perched atop 800m-high Mount Gerzim overlooking his home town of Nablus, where Jews believe that God asked Abraham to sacrifice his son Isaac. The villa is known as Beit Falasteen, or The House of Palestine.

Critics accuse al-Masri of hypocrisy for building such a lavish home alongside the poverty of Nablus and its refugee camps. The city spreads across the valley below and increasingly up the hills on either side. Just beyond its edge sits the UN refugee agency’s largest camp, Balata. It houses some 30,000 Palestinians, many of whom have known no other life in the camp’s 60-year existence.

Brushing off such criticism, al-Masri is busily creating momentum around his crusade for peace. While official talks are once again grinding to a familiar stalemate, al-Masri and several hundred like-minded business leaders from both sides are pushing ahead with their crusade. Al-Masri believes that if Israel and the Palestinians find a way to make peace, the whole of the Arab world could normalise relations with Israel, creating a new trading dynamic that would have enormous economic benefits for the region.

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Al-Masri’s idea was born in 2012. While internationally brokered peace talks were on hiatus, he surprised many by reaching out to Israel’s most famous entrepreneur, angel investor and promoter of Israel’s technology economy, Yossi Vardi. Together, they agreed to set up Breaking the Impasse, or BTI, an association of Israeli and Palestinian business leaders who put their names to an urgent appeal to political leaders to get on with the peace process. The BTI has since swelled to over 300 business-men and women. “They are a very powerful group, who have never been involved in politics before,” al-Masri said. “Today they represent some 40% of Palestinian GDP, and over 25% of Israeli GDP.”

Since then, the BTI has met several times under the auspices of the World Economic Forum (WEF), encouraged by the WEF’s founder, Klaus Schwab. Al-Masri and Vardi have actively lobbied US Secretary of State John Kerry and negotiators on both sides to return to the table. In July 2013, President Obama announced a new round of negotiations, and Kerry began to develop the concept of a Framework Agreement. The negotiations were time-boxed to nine months, and—as the April deadline looms near—continued posturing and new demands on both sides currently threaten to derail this latest effort.

Yossi Alpher is a former Israeli intelligent agent who now writes about strategic issues and advises governments. He suggests, “Kerry’s Framework plan is about maintaining a status quo, pretending to negotiate, while neither side takes any unilateral initiative to compromise. For [Israeli Prime Minister Benjamin] Netanyahu it’s useful, since he can claim to be working for peace while continuing to gobble up Palestinian land. [Palestinian President Mahmoud] Abbas will have to extend the deadline, or risk losing European financial support on which the Palestinian Authority depends.”

Undaunted by the bleak outlook for paece, Al-Masri settles back in his chair next to his beloved 17th century desk. On the hills overlooking the city are the Israeli settlements of Itamar and Bracha, guarded by an IDF garrison just 200m east of the villa. Just behind, perhaps 100m away, is a huge communications tower bristling with satellite dishes and antennas. “FBI, CIA, Mossad, they all have their piece of the tower,” he said.

Throughout our interview, Al-Masri made repeated references to the economic argument Netanyahu echoed in his recent speech to the American-Israeli Public Affairs Committee (AIPAC): “The combination of Israeli innovation and Gulf entrepreneurship, to take one example, […] could catapult the entire region forward.”

This is not as far-fetched as it seems. In 2002, the Arab League presented the Arab Peace Initiative (API), which offers Israel normalised relations with 57 Arab and Muslim states in exchange for a two-state solution based on the pre-1967 borders and a negotiated agreement on the refugee issue. Al-Masri is seeking to catalyse a real discussion of the API: “This is the plan I’ve been pushing Kerry to incorporate into his framework.” The Arab League re-affirmed the API on repeated occasions, most recently in the spring of 2013.

While the API sounds pragmatic on the face of it, it suffers from a number of serious handicaps. Its birth was terribly inauspicious, having been announced the day after a Hamas bombing known as the ‘Passover massacre’ in 2002. At the time, the Arab League should have held back from unveiling the plan, but they didn’t (and failed to condemn the bombing), so creating an unfortunate association in Israeli minds.

The plan is vague on the critical question of Palestinian refugees and their descendants, who number some 6m abroad. Scaremongering is rife on both sides of this debate, but as Alpher explains, “We can easily navigate around the issue of resolution 194, because the Israeli reading of it is that there is no right of return [for refugees].”

Finally, the API was positioned as a take-it-or-leave-it proposal referencing the exact pre-1967 borders of the territories. This does not accommodate Israel retaining any of its settlements, nor address its strategic requirement to protect Ben-Gurion airport and coastal cities. However, this too can be seen as a red herring. Several Arab leaders have indicated that land swaps – which are part of the current peace negotiations – could be incorporated into the API. Al-Masri confirmed, “If the Palestinians accept land swaps, the Arab states will also accept it. We organised a workshop at the BTI to look at this question, and concluded that with a maximum of 2.9% of land swaps you could solve the whole problem.”

The tragedy is that—while the current round of negotiations based on the Kerry Framework look set to founder—no one in the Israeli government has engaged publicly with the API to date. Alpher adds, “Most Israelis don’t know what the API is. When they’re told about it, they seem to be relatively favourable. But the Arab leaders have failed to sell it to the Israeli public. What is needed is a direct appeal, like in 1977 when [Egyptian leader] Anwar Sadat came to Jerusalem and addressed the Knesset. That would blow the public away.”

And yet, where the press has been cynical about Netanyahu’s recent meeting with Obama, al-Masri sees hope. During his speech to AIPAC, Netanyahu said, “Peace with the Palestinians would turn our relations with [the Palestinians] and with many Arab countries into open and thriving relationships.” Al-Masri seizes on this as an opening. He is convinced that—given an opportunity to talk to the same audience about the API, he could be persuasive of its merits to even the most hardline supporters of Israel.

He said, “I want to develop the whole region, including Israel. We know what Israeli entrepreneurship is capable of. Now imagine if we could bring that together with the tenacity and creativity of Palestinian businessmen: an economic powerhouse in the Middle East. That is what is driving the business leaders behind the BTI.”

But Alpher is skeptical: “This notion that you can create the foundations for peace through economic integration has completely flopped. It has been tried many times before. This is a political, not economic conflict.”

After our first interview, Al-Masri led me down the 25-step spiral staircase to the modest dining room attached to the kitchen. He sometimes seems slightly unsteady on his feet. And yet he works day and night, subsisting on 3-4 hours sleep, leaving his resident biographer perennially exhausted.

Al-Masri earned his credibility and the ear of the powerful through decades of active engagement in the region. Educated as an oil engineer at the University of Texas in the 1950s, he founded EDGO Group in Jordan, an oil services company. He returned to Palestine in 1956 to a region in turmoil with a subsistence economy barely able to sustain its inhabitants. During the decades that followed al-Masri would combine proactive entrepreneurship with an understated but highly influential political role in the region.

He was a close advisor to PLO leader Yasser Arafat until his death, and served as a minister in the PLO’s first government, helping establish the institutions of a fledgling state. In 1971, as a minister in the Jordanian government, al-Masri helped Arafat and the PLO relocate to Beirut following the Black September massacre of Palestinian refugees. “Mr Arafat asked me three times to be prime minister of Palestine, but I always said no. I was always more interested in philanthropy and business.”

Through the war of 1967, the occupation of the West Bank that followed, several uprisings and now Israel’s gradual but relentless expropriation of Palestinian lands through settlement building, al-Masri has built 35 companies, responsible for perhaps a third of the territories’ $7bn economy. But more important than his own companies is the infrastructure he has put in place that enables other businesses to exist.

“When we set up Padico Holding, we looked at building the economic infrastructure, not to compete with local businesses. We built hotels, housing, an industrial zone, set up the first mobile telecoms operator, and created the Palestine Stock Exchange.” And yet, he laments, only four of his companies are profitable, the remainder hobbled by the costly side effects of Israeli occupation.

On the ground it’s not hard to see why Israelis and Palestinians find it so difficult to communicate rationally about a solution. The short drive into the West Bank from Tel Aviv puts the emotive issues on stark display. The edge of the West Bank is just 10km from the airport, and 20km from Tel Aviv, fueling Israeli concerns about keeping its sliver of land secure next to a potential Palestinian state.

On the flip side, the drive through the West Bank—on slick 4-lane highways which Palestinians are not allowed to use—takes us past Arab towns in the valleys, overlooked by Israeli settlements and army posts on the hills. This divided landscape, increasingly surrounded by the Israeli ‘separation barrier’ – an 8m high concrete wall in places, is a stark reminder to Palestinians of their lack of control and the encroaching facts on the ground that make any peace deal seem impossible.

From Padico’s office tower in Ramallah, CEO Samir Hulleh describes the challenges of doing business in the occupied territories. Palestinian companies cannot get immigration visas for foreign consultants or experts. Israel controls the borders, the air and the natural resources under ground. Companies who need to import raw materials do not know how long their shipments will be held up at the border, making supply chains long and expensive. “So we try to avoid requiring inputs from abroad and make more use of local goods,” he says.

Al-Masri adds, “It is tough, you are swimming against very heavy current. The per-capita income of Israel is $30,000 while for Palestinians it is $1,000, and we buy the same things, so it’s very difficult. Every day I’m working 18 hours. Out of this time I spend 14 hours extinguishing fires.”

And yet, al-Masri and the many Palestinian business leaders who joined the BTI continue to invest and create new companies. His telecoms operator, Paltel, is growing and profitable, in spite of Israel denying it the 3G spectrum nearly every country in the world now has. Padico’s most ambitious new project is Jericho Gate, a multi-billion dollar commercial and residential development near the historic ruins of Jericho, the world’s oldest city and “a symbol of tolerance, because Jericho goes beyond Judaism, Islam, Christianity—it was born before those religions,” according to Hulleh.

But in working with the business leaders of the BTI, al-Masri and his partners are steering clear of the emotional red lines. He confirms that the BTI is not going to put forward a plan for peace, nor is it taking a position on the major sticking points: “We are not negotiatiors. We’re business people seeking peace for economic development.”

The one thing these business leaders do agree on is the need for a two-state solution. Speaking on a panel at the Middle East Institute last November, Yossi Vardi said, “I admit that there are different versions of the vision of what the two states should be and Munib’s version is probably not my version.”

Even that position is not without risks for the participants—extremists on both sides would take issue with the stance that these leaders are taking. But al-Masri is supremely pragmatic, which has earned him respect on both sides of the debate: “We’re not going to throw the Israelis into the sea and they are not going to push us into the desert. There is enough room for both of us. But there has to be a will to do it together.”

In spite of the firefighting and the challenges, al-Masri is not bitter. His path has always been one of inclusion and optimism, even when the violence reaches his own family. In July 2011, his grandson, an American citizen, was purportedly shot in the back by Israeli soldiers while protesting for peace on the Lebanese side of Israel’s northern border. The younger Munib survived, but lost his spleen and kidney to the incident.

For al-Masri, his villa – the House of Palestine – is both a personal statement of resistance and perseverance, as well as a national project. Just below the residence, a new white and blue mosque—financed by al-Masri—is rising from the hillside. Below it a hanging public garden will flow down toward the edge of town. Adjacent to the house, he plans to break ground soon on an annex that will house a research institute for visiting scholars. Standing in the central rotunda of his villa, under the vertigo-inducing ‘Dome of Tolerance,’ next to an imposing statue of Hercules he acquired in Paris years ago, he says, “Like Hercules, we stand here with perseverance and humility.”

The next morning, al-Masri, awoke at 5am, walked on his treadmill and began preparing for the day. Later he led me on a stroll through the warren-like alleys of Nablus’ old town. Shopkeepers emerge to shake his hand deferentially. We bumped into the leader of the Samaritan Jewish sect, who embraced al-Masri and spoke of their decades-long friendship. Behind him the walls were papered over with peeling posters of teenagers posing with automatic rifles, the martyrs of the Intifada. “After all, we have to think we are all the children of Abraham,” he said. “We really are.”

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