Jamil Salem, part of a research on SMEs
Introduction
Since it is a major source to national economy, states assign special attention to the tourism sector. Believing that the tourism sector enhances social mobility and economic recovery, most states have enacted modern legislation that aim to attract a large number of tourists.
Important forms of tourism are available in some states. Although some states lack necessary resources, they have important religious and cultural sites. Since the rise of the three heavenly religions, Palestine has been famous of religious tourism.
The Palestinian Authority (PA) has recognised the relevance of tourism, particularly religious one. The late President Yasser ‘Arafat issued the Decree Law No. 1 of 1998 Concerning the Enforcement of the Law of Tourism No. 45 of 1965[1] as well as the Regulations promulgated in accordance with it to all Palestinian Territories (the West Bank and Gaza Strip). Therefore, the legal provisions regulating the tourist sector are unified in both the West Bank and Gaza Strip[2].
According to the Decree Law, bureaucratic procedures pertaining to tourism are diminished by transferring powers and capacities exercised by tourism authorities, such as the Tourism Authority as well as its board of directors and advisory board which was operative in the West Bank under Law No. 45 of 1965 to the [Palestinian] Ministry of Tourism and Antiquities in its capacity as the sole administrative and regulatory body of the tourism sector.
In 3 independent sections, I will address the legal basis of tourist structures and industries in Palestine as well as impediments to the business of small enterprises in the tourist sector. I will also evaluate the effective legislation on tourism and its impact on small tourist enterprises.
The legal basis of tourist structures and industries
The Law of Tourism No. 45 of 1965 and Regulation No. 46 of 1966 on Travel Offices promulgated in accordance with it are the main items of legislation that regulate the tourism sector and relevant activities in the West Bank and Gaza Strip. the Presidential Decree No. 1 of 1998 mentioned above also introduces changes to titles and transfers powers and capacities.
The Law of Tourism No. 45 of 1965
Article 2 under this Law defines the meaning of tourist industries as to include tourist and travel offices and companies, tourist transportation, shops of souvenirs and industries of the holy land, hotels, inns, restaurants, rest houses, services of tourist guides, tourist sites, water and buildings allocated by the Ministry of Tourism or any other activity which the Ministry defines.
It should be noted that tourist industries are not defined in an exclusive manner. Only some relevant industries are mentioned as an example. The Ministry of Tourism is endowed a discretionary power to introduce relevant activities under such concept. The Ministry is deemed to be the central body that regulates tourist activities and projects. In addition, it enjoys a judicial personality which authorises it to exercise its powers in conformity with the Law and within the context of its general objectives. In principle, these objectives concern the promotion and development of tourism as well as development and investment in tourist resources so as to increase the national income.
The Law also defines the obligations of the Ministry, including supervision, monitoring, regulation and development of tourist industries. In cooperation with tourist industries, the Law sets and implements comprehensive programmes on tourist advertisement.
Upon recommendation of the Ministry of Tourism, Article (14) grants the Council of Ministers the power to issue and oversee tourist industries as well as decide fees and taxes to collected from them, the manner of collection, financial guarantees to be submitted, the Financial Regulation and regulation of supplies.
The Regulation of Tourist and Travel Offices No. 46 of 1966
In reference of the Law of Tourism mentioned above, the (Jordanian) Council of Ministers approved the Regulation of Tourist and Travel Offices No. 46 of 1966, including the regulation of supplies, advertisement services and construction works for the Tourism Authority[3]; and the Financial Regulation of the Tourism Authority No. 45 of 1966[4]. The Jordanian king promulgated these 2 regulations. The first Regulation makes clear the concept of both the tourist office and the travel office and states the procedures of licensing these offices – whether they are national or foreign as well as the conditions of granting licences. In addition, the Regulation provides for the manner of the function and control mechanisms of the operation of these offices and the penalties imposed on the owners of offices who violate its provisions.
Of particular concern is the meaning of tourist and travel offices. The impact of this Regulation on these offices inasmuch as they are small enterprises will be discussed later.
Article 3 under the Regulation of Tourist and Travel Offices No. 46 of 1966 states that the meaning of travel offices covers each office, establishment and company which has the capacity to deal with travel tickets, obtain travel visas for passengers and ship passengers by sea and air to areas outside the country. Therefore, there is a difference between a tourist office and a travel office: the latter is prohibited form investing in land transportation means as well as internal tourism, whereas the former does not have the power to deal with travel tickets. The drafting of the Articles is impaired and might lead to an obscurity and misinterpretation; both provisions use the preposition from in the defining of the capacities of each office. This preposition implies division; i.e. the capacities and services of one office may overlap with the other since the tasks of either office are not determined in an exclusive manner.
Based on the Law of Tourism as well as the Regulation of Tourist and Travel Offices mentioned above, it should be noted that the Israeli occupation authorities enacted a number of military orders in the West Bank . However, the Israeli military orders have not introduced a substantial change to the Law and Regulation. All these orders did was just a matter of introducing a formal amendment to both the Law and the Regulation. Some orders amended the period of the renewal of the bank guaranty submitted by the office owner[5]. Others added a definition to the content[6], in addition to other amendments[7].
The Presidential Decree No. 9 of 1998 (Bethlehem 2000 Project)
In preparation of observing the third millennium, the late President Yasser Arafat promulgated Presidential Decree No. 9 of 1998 providing for establishment of Bethlehem 2000 Project. According to the Presidential Decree, a public commission with an independent judicial personality, called Bethlehem 2000 Project was established. With its main office in the city of Bethlehem, the entity was affiliated with the PA President.
The Presidential Decree defines the capacities and organisational structure of the commission. Most prominently, the commission is empowered to approve contributions to companies and various economic enterprises so as to achieve the aims for which it was established, thereby directly supporting investment in the private sector as well as small and medium enterprises (SMEs). In order to create a sustainable tourism in Palestine, the commission is responsible for implementing various projects in several fields, including development and rehabilitation of infrastructure projects, tourist facilities, parks, development of traditional industries, rehabilitation of the architectural heritage, increase of the number of hotels and services, restoration of religious and historical sites.
It should be noted that Bethlehem 2000 Project has ambitious and advanced plans that could contribute to supporting SMEs. Some of these plans were carried out. Due to the prevalent political conditions and instability, however, other plans have not been implemented.
Estimations indicate that approximately USD 100 million were invested in private sector projects. A total of 29 enterprises were created to provide residence, accommodation and entertainment programmes as well as to develop traditional handicraft industries.
Impediments to SMEs’ business in the tourist sector
For several reasons, tourist facilities and relevant small enterprises in the Palestinian territories lack investments. The Israeli occupation authorities continue to impose closure on the Palestinian territories and restrict civilians’ movement between Palestinian cities and governorates. In addition, the Israeli authorities implement grave policies against archaeological sites, holy shrines, cultural and heritage locations throughout the Palestinian territories, especially in the cities of Jerusalem and Hebron. The Israelis have stolen many archaeological artefacts from the West Bank and Gaza Strip and transported them to Israel. The Dead Sea Transcripts are but an example. As such, Israel has violated international treaties and obligations, which prohibit the occupying power from attacking or assaulting such properties.
Contrary to many states which give a special attention to SMEs owners due to their role in national development, Palestinian tourist SMEs lack funding provided by the Palestinian government or national institutions. In addition, a policy of attraction towards SMEs is unavailable. Negligence to develop the type of technical and vocational education in developing countries, including that in Palestine, will not promote the economic development process.
Evaluation of effective legislation on tourism in the Palestinian territories
In the context of enacting modern legislation that compatible with the political, social and economic circumstances under the Palestinian self-rule, PA has ideally sought to unify the legal system between the West Bank and Gaza Strip. However, the PA’s approach was not reflected on the tourism sector despite its importance and Palestinian environment’s need to it for particular historical and religious considerations. The Palestinian legislator should have enacted a modern law on tourism that is responsive to the needs of the Palestinian territories and expectations of the outside world. Such a law should have included incentives and safeguards which would attract tourists and investors to SMEs, which tourist sector critically need.
An overview of the legislation on tourism in Palestine reveals that it needs a great deal of review. This legislation encompasses several defects. Below are a number of shortcomings which, if tackled, would support SMEs and encourage the private sector to invest in tourist industry:
- Procedures for licensing tourist industries and enterprises are not flexible and should be facilitated. Article 8/B under the Law of Tourism of 1965 provides that the Ministry is entitled to reject granting a licence for any applicant without stating reasons. Paragraph C under the same Article states that management, exercise or possession of two tourist industries may not be combined, whether directly or indirectly. Undoubtedly, this provision prevents individuals from operating their properties or investing in available enterprises.
- The Presidential Decree, which unifies the Law of Tourism in the West Bank and Gaza Strip, annuls the advisory board included in the effective Law No. 45 of 1965 in the West Bank. The advisory board comprises representatives of the owners tourist enterprises, like hotels, tourist and travel companies and chambers of commerce. The Presidential Decree, however, transfers their powers to the Ministry of Tourism and Antiquities, thereby endowing centralism to the process of decision making related to these enterprises and restricting their efficiency and development.
- Effective legislation does not adopt a policy to support, promote, and fund small enterprises nor does it provide for customs and tax exemptions.
- General provisions regulating tourist SMEs have not been put forward. Tourist industries are not regulated properly. Only tourist and travel offices are regulated. Still, these offices are not regulated in a manner that supports the private sector in its tourist investments.
- The Regulation Concerning Tourist and Travel Offices immunises the decisions taken by the Licensing Authority at the Ministry of Tourism against challenges raised before competent judicial authorities. Such a conduct should not be adopted with reference to such enterprises.
[1] Palestinian Official Gazette, Issue No. 22, November 26, 1998, p. 5. The President exercised his legislative powers because PLC at a recess.
[2] The Law of Tourism No. 45 of 1965 was effective in the West Bank, whereas Law No. 12 of 1962 Concerning the Regulation of Travel and Tourist Companies, Offices and Agencies was operative in the Gaza Strip. The latter law was repealed under Article 7 of the Decree Law mentioned above. The Decree Law applies the law enforced in the West Bank to the Gaza Strip as well.
[3] Jordanian Official Gazette, Issue no. 1921, May 21, 1966, p. 865.
[4] Ibid, p. 869. These regulations will not be addressed as they are not related to this study and merely regulate administrative and financial issues.
[5] Flyers, Orders and Announcements (The Israeli Occupation – the West Bank), Issue no. 64, May 18, 1984, p. 89.
[6] Ibid, Issue no. 52, December 22, 1982, p. 83.
[7] See, the Regulation Concerning Tourist and Travel Agencies (Judea and Samaria) of 5736-1975, ibid, p. 45; and Order No. 917-5741-1981, ibid, Issue no. 49, September 20, 1982, p. 61.
Introduction
Since it is a major source to national economy, states assign special attention to the tourism sector. Believing that the tourism sector enhances social mobility and economic recovery, most states have enacted modern legislation that aim to attract a large number of tourists.
Important forms of tourism are available in some states. Although some states lack necessary resources, they have important religious and cultural sites. Since the rise of the three heavenly religions, Palestine has been famous of religious tourism.
The Palestinian Authority (PA) has recognised the relevance of tourism, particularly religious one. The late President Yasser ‘Arafat issued the Decree Law No. 1 of 1998 Concerning the Enforcement of the Law of Tourism No. 45 of 1965[1] as well as the Regulations promulgated in accordance with it to all Palestinian Territories (the West Bank and Gaza Strip). Therefore, the legal provisions regulating the tourist sector are unified in both the West Bank and Gaza Strip[2].
According to the Decree Law, bureaucratic procedures pertaining to tourism are diminished by transferring powers and capacities exercised by tourism authorities, such as the Tourism Authority as well as its board of directors and advisory board which was operative in the West Bank under Law No. 45 of 1965 to the [Palestinian] Ministry of Tourism and Antiquities in its capacity as the sole administrative and regulatory body of the tourism sector.
In 3 independent sections, I will address the legal basis of tourist structures and industries in Palestine as well as impediments to the business of small enterprises in the tourist sector. I will also evaluate the effective legislation on tourism and its impact on small tourist enterprises.
The legal basis of tourist structures and industries
The Law of Tourism No. 45 of 1965 and Regulation No. 46 of 1966 on Travel Offices promulgated in accordance with it are the main items of legislation that regulate the tourism sector and relevant activities in the West Bank and Gaza Strip. the Presidential Decree No. 1 of 1998 mentioned above also introduces changes to titles and transfers powers and capacities.
The Law of Tourism No. 45 of 1965
Article 2 under this Law defines the meaning of tourist industries as to include tourist and travel offices and companies, tourist transportation, shops of souvenirs and industries of the holy land, hotels, inns, restaurants, rest houses, services of tourist guides, tourist sites, water and buildings allocated by the Ministry of Tourism or any other activity which the Ministry defines.
It should be noted that tourist industries are not defined in an exclusive manner. Only some relevant industries are mentioned as an example. The Ministry of Tourism is endowed a discretionary power to introduce relevant activities under such concept. The Ministry is deemed to be the central body that regulates tourist activities and projects. In addition, it enjoys a judicial personality which authorises it to exercise its powers in conformity with the Law and within the context of its general objectives. In principle, these objectives concern the promotion and development of tourism as well as development and investment in tourist resources so as to increase the national income.
The Law also defines the obligations of the Ministry, including supervision, monitoring, regulation and development of tourist industries. In cooperation with tourist industries, the Law sets and implements comprehensive programmes on tourist advertisement.
Upon recommendation of the Ministry of Tourism, Article (14) grants the Council of Ministers the power to issue and oversee tourist industries as well as decide fees and taxes to collected from them, the manner of collection, financial guarantees to be submitted, the Financial Regulation and regulation of supplies.
The Regulation of Tourist and Travel Offices No. 46 of 1966
In reference of the Law of Tourism mentioned above, the (Jordanian) Council of Ministers approved the Regulation of Tourist and Travel Offices No. 46 of 1966, including the regulation of supplies, advertisement services and construction works for the Tourism Authority[3]; and the Financial Regulation of the Tourism Authority No. 45 of 1966[4]. The Jordanian king promulgated these 2 regulations. The first Regulation makes clear the concept of both the tourist office and the travel office and states the procedures of licensing these offices – whether they are national or foreign as well as the conditions of granting licences. In addition, the Regulation provides for the manner of the function and control mechanisms of the operation of these offices and the penalties imposed on the owners of offices who violate its provisions.
Of particular concern is the meaning of tourist and travel offices. The impact of this Regulation on these offices inasmuch as they are small enterprises will be discussed later.
Article 3 under the Regulation of Tourist and Travel Offices No. 46 of 1966 states that the meaning of travel offices covers each office, establishment and company which has the capacity to deal with travel tickets, obtain travel visas for passengers and ship passengers by sea and air to areas outside the country. Therefore, there is a difference between a tourist office and a travel office: the latter is prohibited form investing in land transportation means as well as internal tourism, whereas the former does not have the power to deal with travel tickets. The drafting of the Articles is impaired and might lead to an obscurity and misinterpretation; both provisions use the preposition from in the defining of the capacities of each office. This preposition implies division; i.e. the capacities and services of one office may overlap with the other since the tasks of either office are not determined in an exclusive manner.
Based on the Law of Tourism as well as the Regulation of Tourist and Travel Offices mentioned above, it should be noted that the Israeli occupation authorities enacted a number of military orders in the West Bank . However, the Israeli military orders have not introduced a substantial change to the Law and Regulation. All these orders did was just a matter of introducing a formal amendment to both the Law and the Regulation. Some orders amended the period of the renewal of the bank guaranty submitted by the office owner[5]. Others added a definition to the content[6], in addition to other amendments[7].
The Presidential Decree No. 9 of 1998 (Bethlehem 2000 Project)
In preparation of observing the third millennium, the late President Yasser Arafat promulgated Presidential Decree No. 9 of 1998 providing for establishment of Bethlehem 2000 Project. According to the Presidential Decree, a public commission with an independent judicial personality, called Bethlehem 2000 Project was established. With its main office in the city of Bethlehem, the entity was affiliated with the PA President.
The Presidential Decree defines the capacities and organisational structure of the commission. Most prominently, the commission is empowered to approve contributions to companies and various economic enterprises so as to achieve the aims for which it was established, thereby directly supporting investment in the private sector as well as small and medium enterprises (SMEs). In order to create a sustainable tourism in Palestine, the commission is responsible for implementing various projects in several fields, including development and rehabilitation of infrastructure projects, tourist facilities, parks, development of traditional industries, rehabilitation of the architectural heritage, increase of the number of hotels and services, restoration of religious and historical sites.
It should be noted that Bethlehem 2000 Project has ambitious and advanced plans that could contribute to supporting SMEs. Some of these plans were carried out. Due to the prevalent political conditions and instability, however, other plans have not been implemented.
Estimations indicate that approximately USD 100 million were invested in private sector projects. A total of 29 enterprises were created to provide residence, accommodation and entertainment programmes as well as to develop traditional handicraft industries.
Impediments to SMEs’ business in the tourist sector
For several reasons, tourist facilities and relevant small enterprises in the Palestinian territories lack investments. The Israeli occupation authorities continue to impose closure on the Palestinian territories and restrict civilians’ movement between Palestinian cities and governorates. In addition, the Israeli authorities implement grave policies against archaeological sites, holy shrines, cultural and heritage locations throughout the Palestinian territories, especially in the cities of Jerusalem and Hebron. The Israelis have stolen many archaeological artefacts from the West Bank and Gaza Strip and transported them to Israel. The Dead Sea Transcripts are but an example. As such, Israel has violated international treaties and obligations, which prohibit the occupying power from attacking or assaulting such properties.
Contrary to many states which give a special attention to SMEs owners due to their role in national development, Palestinian tourist SMEs lack funding provided by the Palestinian government or national institutions. In addition, a policy of attraction towards SMEs is unavailable. Negligence to develop the type of technical and vocational education in developing countries, including that in Palestine, will not promote the economic development process.
Evaluation of effective legislation on tourism in the Palestinian territories
In the context of enacting modern legislation that compatible with the political, social and economic circumstances under the Palestinian self-rule, PA has ideally sought to unify the legal system between the West Bank and Gaza Strip. However, the PA’s approach was not reflected on the tourism sector despite its importance and Palestinian environment’s need to it for particular historical and religious considerations. The Palestinian legislator should have enacted a modern law on tourism that is responsive to the needs of the Palestinian territories and expectations of the outside world. Such a law should have included incentives and safeguards which would attract tourists and investors to SMEs, which tourist sector critically need.
An overview of the legislation on tourism in Palestine reveals that it needs a great deal of review. This legislation encompasses several defects. Below are a number of shortcomings which, if tackled, would support SMEs and encourage the private sector to invest in tourist industry:
- Procedures for licensing tourist industries and enterprises are not flexible and should be facilitated. Article 8/B under the Law of Tourism of 1965 provides that the Ministry is entitled to reject granting a licence for any applicant without stating reasons. Paragraph C under the same Article states that management, exercise or possession of two tourist industries may not be combined, whether directly or indirectly. Undoubtedly, this provision prevents individuals from operating their properties or investing in available enterprises.
- The Presidential Decree, which unifies the Law of Tourism in the West Bank and Gaza Strip, annuls the advisory board included in the effective Law No. 45 of 1965 in the West Bank. The advisory board comprises representatives of the owners tourist enterprises, like hotels, tourist and travel companies and chambers of commerce. The Presidential Decree, however, transfers their powers to the Ministry of Tourism and Antiquities, thereby endowing centralism to the process of decision making related to these enterprises and restricting their efficiency and development.
- Effective legislation does not adopt a policy to support, promote, and fund small enterprises nor does it provide for customs and tax exemptions.
- General provisions regulating tourist SMEs have not been put forward. Tourist industries are not regulated properly. Only tourist and travel offices are regulated. Still, these offices are not regulated in a manner that supports the private sector in its tourist investments.
- The Regulation Concerning Tourist and Travel Offices immunises the decisions taken by the Licensing Authority at the Ministry of Tourism against challenges raised before competent judicial authorities. Such a conduct should not be adopted with reference to such enterprises.
[1] Palestinian Official Gazette, Issue No. 22, November 26, 1998, p. 5. The President exercised his legislative powers because PLC at a recess.
[2] The Law of Tourism No. 45 of 1965 was effective in the West Bank, whereas Law No. 12 of 1962 Concerning the Regulation of Travel and Tourist Companies, Offices and Agencies was operative in the Gaza Strip. The latter law was repealed under Article 7 of the Decree Law mentioned above. The Decree Law applies the law enforced in the West Bank to the Gaza Strip as well.
[3] Jordanian Official Gazette, Issue no. 1921, May 21, 1966, p. 865.
[4] Ibid, p. 869. These regulations will not be addressed as they are not related to this study and merely regulate administrative and financial issues.
[5] Flyers, Orders and Announcements (The Israeli Occupation – the West Bank), Issue no. 64, May 18, 1984, p. 89.
[6] Ibid, Issue no. 52, December 22, 1982, p. 83.
[7] See, the Regulation Concerning Tourist and Travel Agencies (Judea and Samaria) of 5736-1975, ibid, p. 45; and Order No. 917-5741-1981, ibid, Issue no. 49, September 20, 1982, p. 61.
