What is the Palestinian Development and Investment Co. (Padico)?
The Palestinian Development and Investment Company, or Padico, is a Nablus-based holding company registered in Liberia. Since 1994, when political control passed from Israel to the Palestinian Authority (PA), Padico has become the biggest and most influential company in the West Bank and the Gaza Strip, with interests ranging across tourism, real estate, poultry farming, plastics, pharmaceuticals, electronics and communications companies to finance and power generating. One gem is Paltel, the Mideast’s first privately owned phone company, that was granted a 25-year monopoly concession by the PA. Private enterprise and ownership has been banned in most sectors of Palestinian commerce leaving Padico as the main player in a centralization that is part of the corruption in the Palestinian Authority for the benefit of its favored leaders, especially Yasser Arafat. Trading on its unique clout, Padico dominates the PA economy through a network of confidants who are appointed as members of interlocking Boards of Directors of both Padico and its different subsidiaries.
Munib Masri, an American educated Palestinian billionaire, is at the top of Padico but the company really rests on a foundation of cronyism, nepotism and protectionism. Masri's close ties to Yasser Arafat's Palestinian Authority cements Padico's concentration of wealth in Palestinian society. Local business rivals portray Padico as an enemy of the free market and a beneficiary of political concessions. Padico's founding investors are resented by other Palestinians for their affluence, their escape to Europe or the US during troubled times (from 1967 until after the 1987 intifada), and their Westernized ways. For example, Masri's wife and six adult children are US citizens, and most senior Padico employees speak fluent English. Padico is in many ways an extension of the Al-Masri clan, West Bank millionaires who made fortunes abroad while considering Nablus their home. Almost every Padico subsidiary has a Masri or two on its board and the Palestinian Authority's trade and industry chief is another Nablus cousin, Maher Masri. The Al-Masri family owns many other economic projects in the PA, outside of Padico, such as the Palestinian newspaper, Al-Ayyam. In the relatively small Palestinian economy, which has declined significantly as a result of the al-Aqsa intifada started by Arafat in September 2000, Padico looms large. The personal wealth of its Board members is estimated in the billions of dollars and it holds a major share of all the infrastructure in the territories, such as telecom and electric companies. Padico is also the only company licensed by the PA to build projects financed by World Bank, USAID and European Union loans. Income tax payments by Padico are minimal. In 1995 Padico paid $22,261 and in 1996 $12,793 in taxes. No information about its tax payments is available for later years, but it is clear from the 1995 and 1996 figures that the company paid minimal taxes and while revenues increased, the company?s tax payments decreased. Proper tax collection could have covered some of the PA?s budget deficit that had to be made up by foreign contributors.