Munib al-Masri, an industrialist known as “the Rothschild of Palestine”, is back to where he started from — Nablus, a city in the West Bank. Some 65 years ago, he sheltered from Israeli biplanes dropping dynamite and decided to become a fighter pilot to fight back. Today, al-Masri has built an industrial empire and a palace at Nablus, which is set amid Palestinian refugee camps and Israeli army bases. He says his success is a symbol that “Palestinians can also have grand dreams and the tenacity to realize them.”

The 80-year-old al-Masri’s personal holdings reportedly account for a third of the Palestinian economy. PADICO, a company he co-founded, runs a swath of institutions from the stock exchange to the main telecommunications services. He is still very much an industrialist, but most of al-Masri’s time today is spent trying to bring sanity to a ravaged land. He says he has one ambition left — an independent Palestine state and peace in the region. But he acknowledges that it could be a tall order. al-Masri sketches out his journey from Nablus and back in this interview with Knowledge at Wharton.

An edited transcript of the conversation follows.

Knowledge at Wharton: What was it like growing up in Nablus?

Munib al-Masri: I came from a simple family and was the 11th child, and the youngest. I did not know my father. He died when I was one-and-a-half years old. He was a tall man with a mustache, like Zapata [a leading figure in the Mexican revolution]. He was a mukhtar [head of a neighborhood] and tried to help people with their problems. Today, when I go to the market in Nablus and people come up to me, something tells me that I am acting like my father. My mother did not want to send me to school; she wanted to keep me at home. Nevertheless, I ended up going to an elementary school. I liked the way I grew up. We had little, but it felt as if we had everything.

Knowledge at Wharton: You wanted to be a fighter pilot, but on your first flight in the U.S., where you went for higher studies, you decided your place was not in the air. What happened?

al-Masri: I wanted to be a fighter pilot because when I was 14 I used to see Israeli biplanes coming overhead and dropping dynamite on our area. While standing in the shelter, I decided I would be a fighter pilot in the Palestinian air force so that I could fight back.

I went to America by ship; in America I flew in a plane for the first time. The weather was stormy and I was scared. I decided then that flying a plane was not for me. I wanted to be close to the earth so I studied geology instead. I travel often, but I still don’t like flying.

Knowledge at Wharton: While in the U.S. studying petroleum geology at the University of Texas and studying for a master’s degree in government and geology from Sul Ross University you are reported to have changed summer jobs because the new one was offering to pay you 60 cents more. Did your business instincts start to develop there?

“Our biggest problem is the occupation. You must have free movement of goods and, if this is hampered, it results in loss of income.”

al-Masri: In Texas, they used to pay $1 per hour. I was told that if I traveled north to Chicago, they would pay $1.60 per hour. So Chicago became my target. In 1953, my first job involved working two shifts earning $1.60 per hour. I earned $1,000 by the end of summer, which enabled me to pay my tuition fees to study for a year in Texas.

Knowledge at Wharton: Your father was the mukhtar of Nablus. Did he have any business interests? Did you have to start from scratch?

al-Masri: My father was a goldsmith and was in partnership with a Christian from Nablus. They had another partner who dealt in jewelry. He also sold grains and filling material and had other diversified interests.

I started building my businesses from scratch.

Knowledge at Wharton: In 1956, when you returned to the Gulf and set up Edgo, your main business was drilling wells for water — not oil. The wells were used to develop green cities such as Dubai and Riyadh. Can you tell us a bit about the challenges?

al-Masri: In 1956, I came back from America and established a company in Jordan called Jordan Office for Geological Services, mining for minerals and drilling for water. I visited the capitals of the Arab world from Algeria to Egypt to Dubai. We could not find oil in Jordan and so started drilling for oil in Saudi Arabia. But we discovered that water was easier to find. We established one of the first privately-owned engineering companies in the region known as Edgo (short for Engineering & Development Group) and established about 1,000 water wells over 25-30 years. We were good at water well drilling, but we diversified into servicing the oil industry by installing electric pumps in the wells. 

Among the challenges was getting recognized as an expert in the field and securing contracts. It was a matter of being in the right place at the right time and lots of luck. Another challenge was drilling for water in very severe conditions. If you had enough money and the right equipment it was easy. But we did not have enough money and had also to work with equipment dating back to the Second World War. We often did not have enough to eat. Drinking water was sometimes problematic because we did not know the quality of the water we were drinking. Also, I had to devote so much time to these operations that I had very little time for my family. We had six children and I didn’t get to spend as much time with them growing up as I would have liked. It was very tough.

Knowledge at Wharton: Edgo then went into gas and power. Later, it diversified into construction, telecommunications, technology, real estate and project financing. Where do you have operations now? What is your vision for Edgo?

“To the best of my ability I feel I have contributed to the peace process, both behind the scenes and upfront, in encouraging the two opposing sides to be more flexible.”

al-Masri: At that time, we were building the airport in Riyadh and some other projects in Saudi Arabia. Edgo now operates across the Middle East and Africa, with some presence in countries outside these regions. We are diversified in numerous fields and, many years ago, I left the management of the company in capable hands. My attention now is more focused on my activities in Palestine.

Knowledge at Wharton: In 1993, you co-founded the Palestine Development and Investment Co (PADICO), whose primary goal is to develop the infrastructure of Palestine. What has PADICO achieved so far? You have said that 30 out of the 34 PADICO businesses are losing money? What are the four businesses making money? More importantly, what makes you persist with PADICO as you are losing money in Palestine?

al-Masri: The main achievement despite the tough Israeli occupation is that the capital has grown 10 times from the original $200 million. We have 8,650 shareholders, and the company contributes about 20% to 25% of the Palestinian economy in the fields of tourism, telecommunication, real estate, energy, manufacturing and agriculture. PADICO has succeeded in paying between 5% and 6% dividend annually to its shareholders for the past 20 years. It’s not very much as it is a national company; but the main purpose is to build the country.

The reasons for the 30 companies losing money are attributable directly to the occupation. The four companies that are making money include the telecommunications company Paltel, the stock exchange and a manufacturing company.

I persist with PADICO because it is a national cause. Our biggest problem is the occupation. You must have free movement of goods and, if this is hampered, it results in loss of income. The main obstacle we face is getting goods from the ports through the Israeli checkpoints.

Knowledge at Wharton: You have built a large house — Beit Felasteen — on Mount Gerizim, overlooking Nablus. It also overlooks an Israeli Army base, and what are regarded as the illegal settlements of Itamar and Bracha. And close by are also Palestine refugee camps. Isn’t there an essential incongruity in grandeur amid discord?

al-Masri: There is a lot of contradiction in it, but when I went to Chicago in my youth I dreamt of having a place like this. I built it as a monument and proof to the Israelis, and those in the rest of the world, that Palestinians can also have grand dreams and the tenacity to realize them. The name Beit Felasteen (meaning the House of Palestine) was given by Yasser Arafat. I plan on making the house a research center to bring in 15 or 20 professors every year to teach at the local universities. My biggest problem each day is going past the Israel army base and the settlement of Bracha. The settlers stop me and say to me “this is not your land” and when I return in the evening it is repeated. But two days ago I gave somebody a ride from Bracha and he could not believe that a Palestinian would give him a ride. We want to talk to them, but they won’t talk to us.

Knowledge at Wharton: You work 12 hours a day. Are you still hands-on in your various businesses?

“The hopes are long term. I think Israel is starting to realize that this cake has to be split and that we have to live together.”

al-Masri: I wake up at four every morning and go to bed at midnight. I devote two hours to television to follow the news and current events, four hours for private matters, four hours for PADICO and 10 hours for the peace process and Palestinian problems. I’ve been trying for 55 years to end the conflict. Ending the conflict is my biggest concern. I want a better life for all my children but until now I have not yet found an Israeli partner for peace. [Israel prime minister Benjamin] Netanyahu will never be a partner as long as he has this coalition. 

Knowledge at Wharton: What are the problems of doing business in occupied territories and a violence-prone region?

al-Masri: The main problems are the roadblocks and Israeli control over all of our borders. You cannot export and it is nearly impossible to import. Goods and people have to be moved and, as long as you have these restrictions, efficient business is hampered. You need hope and determination.

Knowledge at Wharton: What has been your role in the peace process and do you really see any hopes on the horizon?

al-Masri: To the best of my ability I feel I have contributed to the peace process, both behind the scenes and upfront, in encouraging the two opposing sides to be more flexible. All those who have a link to the conflict, and especially those who are successful and can contribute meaningfully, have a duty to be involved, and give what they can to achieve peace and secure the future of generations to come.

Knowledge at Wharton: Your grandson, also Munib, an American citizen, was shot in the back by Israeli soldiers firing across the Israeli-Lebanese border. He is now confined to a wheelchair. How has this impacted your personal peace initiatives?

al-Masri: It’s very tough but it has given me more determination to try to put a stop to the conflict and stop the suffering on both sides. I’m sad because it needs the Israeli public to stand up and say “enough.” Munib has just graduated. He said that despite his wheelchair, he will always resist the occupation.

The hopes are long term. I think Israel is starting to realize that this cake has to be split and that we have to live together. In the Oslo agreement, Arafat agreed to 22% of the land for a Palestinian state and they agreed to a solution to the refugee issue in terms of article 194 of the United Nations. We need the Israelis to wake up and accept the peace initiative. The Saudis through King Fahd in 1981 tried to initiate an agreement, which became a plan for 57 Arab countries to normalize political and trade relations with Israel provided that Israel would accept living side by side with the Palestinians.

The framework is there. We need Netanyahu to believe that he has a real partner. He knows that the elements exist for a peaceful solution. So far he has not been a partner. He can be a partner, but as long as he has his coalition it seems unlikely to happen. If he and his coalition cannot do it, the Israeli public must wake up and recognize that they must elect a government to represent them and protect their interests, which is achieving a stable peace with their neighbors, and also to act ethically and end this terrible occupation that Israel is inflicting on the Palestinians. We can be good neighbors and we can provide a legacy for generations to come. Nothing is impossible.