points. In addition to departing from a lower poverty base, this slower decline is also partly due to internal migration towards the capital. This has exacerbated poverty especially given that the migrants appear to be predominantly poor<sup>22</sup> .

The good performance of the Northern governorates<sup>23</sup> , in terms of greater growth in consumption and a greater decline in poverty, cannot be solely explained by the catching-up effect. Three contributing factors can be noted. First, these governorates benefitted from their geographical position as being at the intersection of trade activities between Jordan and its neighboring countries, mainly Syria, Iraq, West Bank & Gaza (WBG) and Israel. In effect, cumulative trade with these countries increased from US$1.8 billion in 2002 to 2.3 billion in 2010<sup>24</sup> . Second, they have benefitted from increased public expenditure. In effect, according to the household surveys, 10.7 percent of households in Northern governorates have received at least one kind of public transfer<sup>25</sup> in 2002, a ratio that has increased considerably to 68.3 percent in 2010. This compares to 7.1 and 50.5 percent in those respective years for household in the rest of the Kingdom<sup>26</sup> . Additionally, public investment seems to have been directed towards these regions. In the absence of historical data, more recent official budget figures for 2009-2011 proxy the level of government focus provided for these governorates. Figures indicate that an average of 43.5 percent of total capital spending allocated for governorates has in effect been disbursed in these areas compared to 28.4 percent for the other regions (excluding Amman)<sup>27</sup> . Hence such government attention has had positive spillover effect on welfare growth and poverty reduction in these regions. Third, public sector employment has been used as a tool to alleviate

> 22 Refer once again to the poverty and population distribution figures in Table 2.

> 23 The Northern governorates are specified in this study as the governorates of Zarqa, Irbid, Jarash, Mafraq and Balqa. 24 The largest growth in trade was with Syria. Figures from the Jordanian Department of Statistics indicates the following changes in trade activities by the respective countries:

> _* Jordanian Imports (2002 vs. 2010):_ US$97 mln vs. US$377 mln from Syria, US$752 mln vs. US$234 mln from Iraq, US$12 mln vs. US$37 mln from WBG, and US$126 mln vs. US$89 mln from Israel.

> _* Jordanian exports (2002 vs. 2010):_ US$70 mln vs. US$258 mln from Syria, US$605 mln vs. US$1131 mln from Iraq, US$27 mln vs. US$62 mln from WBG, and US$137 mln vs. US$107 mln from Israel.

> 25 The Household Income and Expenditure Surveys of 2002 and 2010 present three categories of transfers: the National Aid Fund, other government transfers, and other types of public transfers.

> 26 Excluding Amman, the ratio is calculated at 14.9 and 68.9 percent respectively in 2002 and 2010.

> 27 Figures are taken from the official 2011 and 2012 official budgets published on the website of the General Budget Department <u>www.gbd.gov.jo. It should be noted that the figures in the text do not reflect all capital spending in</u> Jordan but projects that are governorate specific. In effect, capital spending in the Northern governorates averaged 15.4 percent of the overall investment spending in the Kingdom (2009-2011), compared to 10.1 percent for Amman and 10.3 for the rest of governorates. A significant average of 64.2 percent of total capital spending is actually allocated for what the budget regional classification labels as “central expenditures”, which represent investment spending conducted on projects that cater for the whole Kingdom and are not regionally focused.

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