Jordan - Urban sector review

Report No. 3965-JO Jordan Urban Sector Review June 22, 1983 Urban Projects Division Europe, Middle East and North Africa Region FOR OFFICIAL USE ONLY Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  CURRENCY EQUIVALENTS 1 Jordanian Dinar (JD) US$3.0654 (1981), US$2.839 (1982) 1 US Dollar ($) J 3D 0.326 (1981), JD 0.352 (1982) MEASURES AND EQUIVALENTS - 1 Kilometer (km) = .62 miles (mi) I Hectare (ha) = 10,000 m2 or 2.471 acres 1 Acre = 4047 m2 or .405 ha. I Liter per capita per day(lcd) = .264 US gallon per capita per day (gpcd) ACRONYMS ATMDP - Amman Transport and Municipal Development Project AURPG - Amman Urban Regional Planning Group AWSA - Amman Water and Sewerage Authority CVDB - Cities and Villages Development Bank DOS - Department of Statistics HB - Housing Bank IDB - Industrial Development Bank JEA - Jordan Electricity Authority JIEC - Jordan Industrial Estates Corporation JVA - Jordan Valley Authority MMRAE - Ministry of Municipalities and Rural Affairs and the Environment MOH - Ministry of Health MOI - Ministry of the Interior MOT - Ministry of Transport MPW - Ministry of Public Works MSA - Ministry of Social Affairs NHC - National Housing Corporation NPC - National Planning Council NRA - Natural Resources Authority NRPG - Northern Regional Planning Group PMM - Peat, Marwick, Mitchell & Co. PTC - Public Transport Corporation REFCO - Real Estate Finance Company SPC - Supreme Planning Council SRP - Southern Region Project TCC - Telecommunication Corporation UDD - Urban Development Department (project agency for UDP-I) UDP-I - First Urban Development Project UNRWA - United Nations Relief and Works Agency for Palestine Refugees in the Near East WSC - Water Supply Corporation FISCAL YEAR January 1 - December 31 This report includes the findings of a Bank mission to Jordan in June 1981 led by Mr. F. Mitchell (economist) and comprising Messrs. B. Assimakopoulos (engineer/planner), J. Ladd (consultant financial analyst) and W. Shirrefs (consultant municipal engineer). The report also reflects the review by Messrs. S. Mitric (transport planner) and R. Bonney (economist), of the Amman Region Transportation Study, the findings of a brief visit to Jordan by Messrs. Mitchell and Mitric in October 1981 in connection with that review, and discussions with the Government on aspects of the report in October 1982, November 1982, and February 1983. Editorial assistance was provided by Mr. Richard Herbert.  FOR OFFICIAL INUW! nV,V JORDAN URBAN SECTOR REVIEW Table of Contents Page No. SUMMIARY . . . . . . . . o. . . . . . . . . . . . . . . . . . .................. (i-x:) I. BACKGROUND . . . . . . . . . . . . . . . . . . * . . . . . 1 A. Introduction . ... ....- . . . .. B. The National Economy . . . . . . . . . 1 C. Poverty and Income Distribution . . . . . . . . . . 4 D. World Bank Involvement in the Urban Sector . . 5 E. Summary . . . . . . . . . . . . 6 II. POPULATION, URBANIZATION, AND SPATIAL STRATEGY . . . . . . . 6 A. Introduction.... . . ... . 6 B. Growth and Migration . . . . . . . . . . .6 1. Recent Trends . . . . . . . . . . . . . . . . . 6 2. Future Prospects . . ..8 C. Rate of Urbanization .. .9 D. Spatial Patterns and Development Strategies . . . . . . . 9 1 General . . . . . . .. .. .. . . . 9 2. Existing Spatial Patterns . . . . . . . . . .. 10 3. Spatial Development Strategies . . . . . . . . . . . 12 4. Past Spatial Policies . . . . . . . . . . . . 13 5. Scope for Wider Spatial Distribution of Industry and Population . . . . . . . . . . . . . . . . . . . . 14 6. Realizing Local Potentials. . . . . . . . . . . . . . 16 7. Preponderance of Greater Amman. . . . . . . . . . . . 17 E. Summary .17 III. URBAN MANAGEMENT AND FINANCE . . . ..18 A. Introduction .. . . ... 18 B. Local Government Institutions . . . . . . . . . . . . . . 18 1. The Existing Framework . . . . . . . . . . . . . . . 18 2. Local Government Functions . . . . . . . . . . . . . 19 3. Administrative Issues 20 4. Options for Strengthening Local Government . . 21 C. Local Government Finance . . . . . . . . . . . 22 1. The Current Situation.. . . . 22 2. Future Prospects . . . . .... 23 D. The Planning Process . . . . . . . .25 1. Inter-Regional Planning . . . . . .. . . . 25 2. Regional Planning . . . . . . . . . . . . 26 3. Planning in Specific Areas. . . . . . . . . . . . . . 27 4. Local Planning. . . . . . . . . . . . . . . . . . . . 30 5. The Basic Issue . . . . . . . . . . . . 30 E. Summary . . . . . . . . . . . . . . . . . . 31 This document has a restricted distribution and mnay be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  Page No. IV. INFRASTRUCTURE SERVICES ................. . 32 A. Introduction . . . . . . . . . . . . . . . . . . . . . . 32 B. Water and Sewerage . . . . . . . . . . . . . . . . . . . 32 1. Institutions ................. 32 2. Service Provision and Basic Issues . . . . . . . . . 32 3. Water Pricing . . . . . . . ... . . . . . . . . . 33 C. Solid Waste ......... . . . . ...... .... . . 34 1. Current Practices . ........ ..... . 34 2. Organization of Solid Waste Management . . . . . . . 34 D. Transport . . . . . . . . . . . . . . . . . . . . .* . .* . 35 1o Overview . . . . . * . . .. . .. * * * .* . . .* *.. 35 2. Amman Region Transportation . . . . . . . . . . . . . 36 3. The Four Basic Issues . . . . . . . . 37 F. Telecommunications . . . . . . . . . . . . . . . . . . . . 38 Go Education . ..a.... . . . . . . ... . . . . . . . . 39 H. Health . . . . . . . . . . .. . . . . . . . . . . . . . . 39 1. Institutions . . . . . . . . . . . . . . . . . . . . 39 22. Issues . . * . . . . .. . ' . . .. . . . . .. .. .. 40 I. Social Welfare . . . . . . . . . .. . . . . . . . . . . 41 J. Summary .o... . . . . * . . . . . . . . . . . . . .. .. 41 V. SHELTER . . . . . . . . 42 A. Introduction . . . . . . . . . . . * . . . . . . . . . . 42 B. Housing Conditions . .. o .. ..... . . . . . . . . . . 42 1. Delivery Systems and Tenure . . . . . . . . 42 2. Physical Conditions. 45 C. Housing Sector Performance 46 1. Growth and Investment . . . . . . . . . . . . . . 46 2. Housing Shortages and Vacancies. 47 3. Costs and Affordability . . . . . . . . . . . . . . . 48 D. 1981-85 Development Plan Proposals and Shelter Sector Strategies trategies.... . ....... 49 1. Overview . . . . . . . ........ ... . . . . 49 2. Measures to Reduce Costs . . . . . . . . 49 3. Role of the Private Sector . . . 53 4. Increased Public Sector Participation . . . . . . . . 54 5. Provision of Shelter for Low Income Groups - Role 6. Information and Policy . . . . . . . . . . . . . . . 56 E. Summary . . . . . . . . . . 57 VI. URBAN DEVELOPMENT STRATEGY ..... . . . . . . . ... . 57 A. Background . . . . . . . . . . . . . . . .... 57 B. Policy Priorities . . . . . . . . . . . . . . . 58 C. Urban Investment Priorities . . . . . . . . . . . . . . 59 D. Summary . . . . . . . . . . . . . . . . . . . . . . . . . 62  Page No. ANNEXES ANNEX I. TABULAR MATERIAL . . . . . . . . . . . . . . . . . . . 64 ANNEX II. THE HOUSING SECTOR . . . . . . . . . . . . . . . . . . 103 ANNEX III. PLANNING OF CITIES AND VILLAGES (LEGISLATION) . . . . . 114 ANNEX IV. PLANNING ISSUES AND INFRASTRUCTURAL PROVISION IN AMMAN, IRBID, AND AQABA . . . . . . . . . . . . . . 117 List of Text Tables Table 1.1 Economic Structure and Growth . . . . . . . . . . . . 3 Table 2.1 Growth in Urban Populations (Scenario II, Assuming no Migration to Amman) . . . . . . . . . . . . . . 17 Table 5.1 Planned Housing Program, 1981-85 . . . . . . . . . . . 50 Table 5.2 Effects of Various Policies on Density of Development and on Land Prices. . . . . . . . . . . . . . . . . 52 Table 6.1 Policy Objectives, Actions, and Responsible Agencies . 60 List of Maps 16511 - Jordan: Administrative Boundaries, Regional Planning Areas, and Major Cities . . . . . . . . . . . . . . . . . . . 131 16512 - Amman-Balqa Region . . . ................. 132  JORDAN URBAN SECTOR REVIEW SUMMARY Background i. This sector review has two aims. to identify the main "urban" issues confronting Jordanian policymakers as the economy enters a more complex phase of development, and to serve as the basis of a dialogue between the World Bank and Jordan concerning urban policies and investment priorities. ii. The Hashemite Kingdom of Jordan (East Bank) has a total area of 91,000 km2, of which only 5,000 are cultivable. The (1979) population of 2.1 million is largely confined to one sixth of the area consisting of a strip including the Jordan Valley and the western highlands with annual rainfall of 200 mm or more. About 70% of the population is urbanized (living in localities of 5,000 or more). Of these, three quarters are located in the Amman region. Past Economic Growth, Prospects, and Poverty iii. The economy has been extremely buoyant under the stimulus of liberal economic policies, major investments in industry and manpower (education, training), strong regional demand for Jordan's labor and commodity exports, unique political circumstances, and high levels of aid. Services, including construction, have been the leading sector, accounting for 78% of employment and 73% of GDP in 1979 (36% and 19% respectively in government). External factors have played an important role in this; grant aid provides over 40% of government resources, and net government transfers on current account came to US$1.3 billion. 1980 GNP, at US$3.6 billion, was 24% higher than GDP (US$2.9 billion), largely due to workers' remittances. iv. Forecasts for the 1980s indicate that continued rapid growth in GDP will depend increasingly upon growth in non-government services and manufacturing. GDP growth is forecast at almost 9% per annum, employment growth at less than 4%, and domestic labor force growth at over 6% p.a. This implies either rapidly escalating unemployment or substantial adjustments in wage rates to encourage more employment unless there is exceptional success in developing the domestic economy and unless foreign markets for Jordanian workers continue to expand rapidly. v. The Bank-defined absolute urban household poverty income in 1980 was US$2,670 per year, or about $400 per capita, compared with per capita GNP of US$1,620. At least 11% of urban households in the Amman region were in poverty on this definition (data are unavailable for other areas). Given the expected worsening employment situation, the numbers of families in relative, if not absolute, poverty may be expected to rise.  - ii - Population, Urbanization, and Spatial Strategies vi. The fundamental urban challenge facing Jordan is to plan for, and invest in, cities which efficiently provide the services needed to support future growth of export-based service and manufacturing activities and to meet the needs of a rapidly rising population. vii. Depending upon assumptions about the economy and external environment, the year 2000 population may come to between 3.8 millions and 5.4 millions, compared with 2.1 millions in 1979 (average annual rate of growth of 2.7% to 4.5%). Our base forecast is for a year 2000 population of 4.3 million (growth at 3.4% per annum). Given the limited prospects for increasing agricultural employment, virtually all of the increase would be in urban population (growth at 4% p.a.). viii. The 1973-75 Development Plan stated the objectives, repeated subsequently, to decongest Amman city, and to spread the population more evenly among the regions. These objectives are in conflict, since decongestion policies will tend to make further growth of the Amman area more attractive relative to other regions. Policies have tended more to the first objective than to the second. ix. Whatever the success achieved in stimulating regionally balanced development, the Amman region will attract most economic and urban growth for the remainder of this century. Efficient provision of services there should therefore receive the highest priority. x. Defining spatial strategies, in the sense of deciding on tradeoffs among regions, cannot be done at the regional level. It requires that the authorities concerned with national investment programming introduce spatial considerations explicitly into their planning procedures. xi. If it is desired to create growth poles outside Amman region, the following points need to be taken into account: (a) location of population is determined by location of attractive income earning opportunities, rather than vice versa; (b) the location of jobs in light industry is more subject to policy influence than the location of jobs in other sectors; (c) due to limited growth in light industrial employment (750 - 3,300 jobs per year), and the existing and growing comparative advantages of the Amman region, there may be scope for only one other centre to accumulate sufficient agglomeration economies to compete effectively with greater Amman in the near term; and  (d) the prime candidate for such a centre would appear to be greater Irbid (with a 1979 population of 158,000). Aqaba (27,000) will continue to be dominated by large scale public sector investments in transport, energy and manufacturing. Its small current size, relative remoteness from existing population concentrations, rigorous climate, shortage of water and shortage of land (exacerbated by a policy of low density development), make Aqaba a less likely countermagnet. xii. In the interests of regional balance, efforts should continue to encourage resident entrepreneurs to develop productive enterprises in other cities to serve local markets and to process local resources. Efforts to develop agriculture will also play a role in this process. Urban Management, Planning, and Finance xiii. The 1981-85 Development Plan points out that Jordan's public administration suffers from many basic problems including a multiplicity of institutions with overlapping responsibilities, overcentralisation of authority, and personnel policies which make it difficult to attract and retain staff of the caliber required. There is an unavoidable tension between the strategy of establishing dynamic sectoral agencies to plan and implement programs and the need to secure adequate coordination among them. The Plan proposes a Royal Commission to review Jordan's public administration. This deserves bigh priority in the context of stimulating urban development as well as the development process in general. xiv. National policy for at least a decade has been that local governments should take increasing responsibility for stimulating development in their communities. Yet, most of the activities involving large expenditures allocated to local governments under Law 29 of 1955, have been, or, in the case of water and sewerage, are being transferred to national functional ministries or parastatal organizations. The relative unimportance of local governments is highlighted by the fact that their expenditures in 1979 amounted to 6% of central government expenditures. Since the management, organization, financing, and staffing of local governments must depend upon the functions they are expected to perform, a clarification of these functions deserves early attention. If these issues do not form part of the terms of reference of the Royal Commission on public administration, they merit a special review. Strengthening Amman's staffing and organization deserves priority attention in the light of the size and complexity of that city, its role of leadership vis a vis other municipalities, and its current efforts to upgrade its capacities. xv. Large surpluses of recurrent receipts over recurrent expenditures have enabled local governments to finance most of their  - iv - development expenditures. Increases in local governments' effectiveness and functions will require growth in their operating expenditures. There is ample scope for an increase in local government revenues, not least by placing emphasis on those sources (such as the land and building tax and betterment levies) which not only raise revenues but also encourage more economic use of land and infrastructure. xvi. Better planning and coordination of public investments in different sectors at the regional as well as city level will become increasingly important in avoiding waste and in encouraging an efficient pattern of urban development. Although existing planning legislation provides a legal framework within which government could partly meet these objectives, the potential has not been realized. There needs to be a focus on creating clear links between plans and investment decisions. xvtii. Given the vital economic role of the Amman region, and the increasing scale and complexity of services, special attention should be given to strengthening planning there. These are several institutional options. The most attractive one, and possibly the most complicated one to implement, would be the creation of a metropolitan government. This would have responsibilities for delivering some services, supervising operations of municipalities in the area, making plans, and reviewing proposed public sector investments. Urban Services xviii. The provision of most basic infrastructural and social services has expanded rapidly under the impetus of a growing economy, government concern to meet basic needs of the population, and substantial external support. One general problem has been a more scattered and less dense development pattern than would have been possible within specific urban areas, with attendant overinvestment in infrastructural networks. In greater Amman, density of population is decreasing in the built up areas. This is due to weak planning controls, exacerbated by subsidies in provision of public services, failure to collect betterment levies, and low taxes on land (reducing pressure to develop land in serviced areas). xix. Water and Sewerage: Between the 1961 and 1979 censuses, the percentage of urban households supplied with piped water rose from 49% to 87% with most of the improvements occurring in the 1970s. In 1979, only 26% of urban households were connected to sewerage systems. Ongoing programs, several with external assistance, are now raising these percentages further. Water supply is subsidized in the rural areas, while in the urban areas, progressive tariffs give an incentive to economise on the use of this scarce resource. A tariff study, which will inter alia examine a rationalized structure taking account of consumers' abilities to pay, and differences in water costs among regions, is included in the Zarqa/Ruseifa Water Supply and Sewerage project being financed by the World Bank.  xx. The most critical water problems concern its total supply, including treatment of waste water and recyling. There are uncertainties regarding basic supply data. Since water is a basic constraint to economic growth, this sector deserves priority attention. Responsibilities are fragmented among four major agencies, and, partly as a result, there is no clear strategy. The government is considering the establishment of a National Water Authority to formulate a national water policy. xxi. Street cleansing and solid waste collection and disposal are the main services, as measured by recurrent budget expenditures, still provided by local governments. Collection appears to be performed well and is appropriately provided at the local level, whether by municipalities or, potentially, private organizations. Disposal of solid waste is a problem, however, and there is a need to identify suitable disposal sites, to prepare dump procedures, and to establish arrangements for the management of garbage dumps used by several municipalities. More capital intensive, labor saving collection and disposal methods are now under consideration in Amman. Likely future relative scarcities of labor and foreign exchange should be taken carefully into account before major investments are made in the new technologies. xxii. Electricity was received by around 98% of urban households in 1979 (compared with 39% in 1961). Bank-assisted programs are underway for increasing the supply and distribution of power to keep up with projected demands. While telecommunications are still a constraint to commerce and industry, existing projects to install fully automatic electronic telephone exchange systems, and microwave lines between remoter centres (with financial and technical assistance mainly from France and Japan) should eliminate serious communications problems by 1985. xxiii. As cities' populations increase and incomes rise, urban transport becomes an increasingly critical constraint on, and determinant of, the direction, density and size of their future development. The main urban transport problems are in the Amman region, where an auto-based transport system is reaching its limits. A doubling of vehicle registrations between 1976 and 1979 has led to increasing congestion in the city centre. In spite of a major road construction program, transport bottlenecks still impede efficient industrial growth. Rapid extension of roads has facilitated a leapfrogging development pattern which is dependent on private automobiles. Insufficient attention has been given to pedestrian needs. xxiv. A number of important issues deserve attention in connection with Amman transport; a) A strategy is required for regional transport which treats the different modes as parts of one system (currently the agencies dealing with different parts of the system operate without significant coordination).  - vi - b) Transport strategy needs to relate to regional plans, including appropriate measures for decongestion. c) There needs to be more systematic application of economic criteria in deciding on transport investments, especially in the light of the low rates of return on road expansion and opportunities to increase returns from existing plant (through more attention to traffic engineering and traffic management, and through innovating methods to increase the attractiveness of mass transport relative to private automobiles). d) Policies on subsidies and transport licensing need to be thoroughly reviewed with a view to encouraging efficient service at low cost to government and consumers, and especially to achieving an appropriate balance between privately operated service (shared) taxis and buses, and buses run by the subsidized Public Transport Corporation. e) Institutional mechanisms need to be established and staffed to define and implement transport plans and policies; this could be the first step in establishing a viable regional institution for planning and investment programming more generally. XXv. Jordan's human resources investments have been a major factor in the country's success in developing its own economy, and in exporting labor and securing remittance income. Education is provided by the Ministry of Education, UNRWA, and several private institutions. Virtually all primary school aged children (excluding some in semi-nomadic areas in the south), and almost 80% of those in the preparatory school ages are enrolled. Total illiteracy, as well as regional illiteracy differentials, have decreased sharply. The government is aware of the importance of developing the country's human resources, and has defined and is implementing major programs of vocational and professional training with Bank assistance. xxvi. In the case of health, Jordan's performance (in terms of infant mortality, death rates and life expectancy) has improved significantly in recent decades and compares favorably with other countries in the region. Health services are provided by the government and UNRWA (645,000 persons are eligible for UNRWA health care). Amman's situation as measured by outputs (e.g., infant mortality rates) and inputs (physicians and hospital beds per capita) is superior to that of other governorates but imbalances are decreasing. Changes in habits and attitudes will play an increasing role in securing further improvements in health.  - vii - xxvii. There is concern in Jordan at the status of persons who are being left out of the current prosperity, and the Ministry of Social Affairs (MSA) was established in 1979 to formulate a social program. Given the likely increasing income inequality, efforts are required to identify disadvantaged groups, to establish targetted programs to assist them, and to monitor their welfare status. An initial step would be to exploit existing data sources (household surveys, data collected by the Urban Development Department of Amman Municipality (UDD)). These tasks might be taken on by the MSA, or by the municipalities. Shelter xxviii. Housing investment, fuelled by remittances from Jordanian workers abroad, considerably exceeded the 1976-80 plan forecast and came to 6.5% of GNP. In spite of serious supply constraints due to the construction boom and emigration of skilled workers, housing probably rose in step with population. The 1979 Census indicates high vacancy rates (around 16% of housing units, and 14% of completed housing units, were unoccupied). This probably reflects several factors including; (a) oversupply of high income housing; (b) rent controls (which discourage owners from renting out units they are temporarily not occupying); (c) shifts in population from rural areas; and, possibly, (d) imperfections in the census enumeration. xxix. Little information is available on housing conditions. Around 11% of the urban population live in refugee camps managed by UNRWA, another 7% in low income squatter settlements, and an unknown number in housing provided by the military for its personnel. Just under half of urban households own their accommodation. While overcrowding in the sense of number of households per housing unit is not a major issue, 41% of the urban population is housed at four persons or more per room. sxx. New privately produced formal sector housing for single family occupancy is unaffordable to the lower two-thirds of Amman income earners (unless they can make equity investments of several times their annual incomes). The basic constraints to furnishing affordable housing are high costs of land (due to land's attractiveness as an investment, low taxation of land, and large minimum site areas in building codes), and high construction costs. Rent controls and credit terms are additional but less serious impediments. xxxi. The 1981-85 Development Plan sets out reasonable quantitative targets for new housing units, although unit costs and housing investment (at 4% of GNP) are underestimated. The Plan calls for increased emphasis on housing for lower and middle income people, including a substantial increase in subsidized housing by the National Housing Corporation. NHC is unlikely to achieve its unit cost targets, even should it achieve construction targets. There may be larger gains from policies designed  - viii - to contain (or reduce) the price of land, to allow smaller plot sizes, and to make serviced land available in convenient locations at prices which enable the informal sector to construct housing affordable to the lower 40% without government subsidy. The informal sector appears to be abLe to construct shelter at 60% of the cost of large contractors working for government. The Bank-supported First Urban Development Project (UDP-I) is innovating this approach in the Amman region. Success of this policy, and improved land use patterns, will depend partly upon arresting further squatting on government land. xxxii. There is no explicit national housing policy, possibly in part because no agency is responsible for it, a gap which needs to be remedied. A study under the UDP-I will recommend a housing strategy, and address the institutional issue. Urban Development Strategy; Policies xxxiii. Many different actions can strengthen efficient urban development as a vital component of national economic growth. Defining a strategy, including priorities among different policies and agencies, is evidently a delicate task calling for sensitive judgements based on considerations which extend well beyond technical efficiency. The following actions deserve early attention; (a) early start of the Royal Commission on public administration; (b) strengthening Amman Municipality organization, staffing, and finances; (c) establishment of effective Amman region planning machinery; (d) incorporation of spatial planning considerations more systematically in NPC's procedures for appraisal and coordination of projects; and (e) increasing land taxation and betterment levies, and bringing the use of the public domain under public control. (The table on page x summarizes the relationships among basic policy objectives, policy actions, and responsible agencies). Urban Investment Priorities xxxiv. Given Jordan's high degree of urbanization, virtually all investments have urban impacts. The following paragraphs highlight a few sectors in which the amount and type of investments require special attention in the context of the issues discussed in this report.  - ix - xxxv. Clearly, water will remain the most critical constraint on development, and will also have a major impact on regional development patterns. On this ground alone, it requires attention. Development of the smaller municipalities will continue to be important for meeting the objective of regional balance. The success of the Cities and Villages Development Bank in assisting municipalities to plan and implement viable projects deserves to be carefully monitored in the context of defining whether more substantial investments would be justified in the future. Amman region transport investments deserve special attention, given their high costs, and their central role in determining land use patterns and the efficiency of the Amman region. xxxvi. In the shelter field, there needs to be careful assessment of the costs and benefits of existing public sector programs. Strengthening the institutions responsible for low income shelter projects such as UDP-I, and assuring that viable programs are in place to ensure provision of adequate shelter and services to less advantaged groups merit special attention. In the longer term, consideration should be given to investments to implement policies arising from the housing strategy study, and to encourage private developers to undertake low-cost shelter projects incorporating the standards pioneered by UDP-I.  x POLICY OBJECTIVES, ACTIONS, AND RESPONSIBLE AGENCIES 3.irahle Sesponsible Policy Obiectives and Main Findings Priority Urban-Related Actions Titing Agencies A. Develop efficient urban areas of auffi- ei<nt site to generate agglomeration economies to underpin future growtb of economy and employment; need fors 1. Decisions on priority centres for Define industrial policy with m GT,NPC growth. (If countermagnets to Amman spatial dimension. region desired, one should be selected). Introduce spatial criteria into 1 NPC (a) investment appraisals, 2. More attention to efficient development (b) approvals of industrial H ml of specific urban centres to economise investments. on costs of construction and maintenance of infrastructure and to ensure high level of service provision. Need to strengthen: - Regional planning both in terms of Establish Amman Region Planning H GT,MMRA,NPC,A defining strategies and securing /lachinery. connections between plans and invest- Develop and implement integrated S GT,A,MT,NPC ments (priority to Aomn) program for Amman Region Transport MPW,P,M - Incentives to firms/agencies to con- exercise existing planning povers H MMRA, M,G fors to more efficient development to enforce regional strategies patterns. Increase land taxes, collect S GT,A,M,WSC,AWSA betterment levies, ensure cost recovery of infrastructUres. Arrest new low density squatting S GT, A on government lands. B. Identify and develop potentials of natural R eview methods to induce more l NPC, MHRA, IDS and human resources in smaller urban centres. development in regions,, including appropriate machinery. \laborate CVDB appraisal criteria. S CVDB C. Income distribution likely to become more Exploit existing surveys to identify S MSA, DOS unequal and ensuring basic needs of disad- disadvantaged groups. vantaged will require targetted measures. Mount special surveys, identify H NSA, A, DOS programs. Special efforts to strengthen Amman S A, GT Municipality organization and staffing. D. 1. Capacity of Government (central, local, Launch Royal Commission on Public parastatal agencies) to plan and imple- Administration. S GT meet coordinated policies and investments Special study of local government will become more important as complexity functions, operations, finances H CT, MMRA of esonomy increases. (if not covered by Royal Commission). 2. Increase local government finances. g. 1. Strategy on shelter required to ensure Launch shelter strategy study as S NPC adequate service to all groups at soon as possible. uinimum subsidy. oLunch planning and building S "IRA, A 2. Serviced land for housing at affordable standards study under UDP-1 prices should be provided by private and Pursue implementation UDP-I. S NPC, A public sectors in appropriate locations together with infrastructural and social facilities. KEYs Agency Abbreviations: CT (Covernment) - Hany ministries involved, including substantive intervention by Prime Minister's office; A. - Amman Municipality; AWSA - Amman Water and Sewerage Authority; CYDB - Cities and Villages Development Bank; DOS- Department of Statistica; C - Governors; IDB - Industrial Development Bank; M - Municipalities; Ml M Ministry of Industry; NMRA = Ministry of Municipal and Rural Affairs; HPW - Ministry of Public Works; MSA M Ministry of Social Affairs; MT - Ministry of Transport; NPC - National Planning Council; P * Police; WSC - Water Supply Corporation. Desirable Timings S * Short term; M - Medium Term.  I. BACKGROUND A. Introduction 1.01 The Hashemite Kingdom of Jordan (East Bank) has a total area of 91,000 km2, of which only 5,000 km2 are cultivable. The population, which grew from 0.9 million in 1961 to 2.1 million in 1979, is largely confined to one sixth of the total area. The north-south belt of settlement includes the Jordan Valley and the western highlands with annual rainfall of 200 mm or more. About 70X of the population is urbanized (living in localities of 5,000 or more persons), and three quarters of the urbanized total is found in the Amman-Balqa region (see Map IBRD 16511). 1.02 This review represents the findings of a Bank mission to Jordan in June, 1981, supplemented by later discussions with the authorities in 1982 and early 1983, partly in the context of discussions on the Amman Transport and Municipal Development Project (ATMDP) -l With certain exceptions which are noted in the text, the report has not been updated to reflect developments since June 1981. Appropriate corrections have, however, been made in official statistics which have been adjusted since the mission. 1.03 This review has two aims. first, to analyse existing data in order to bring out the main "urban" issues confronting Jordanian policymakers; and second, to provide an input into a dialogue with the Jordanian government on urban policies and investment priorities. 1.04 Given these aims, the rest of Chapter I is given over to an outline of the national economic context, including issues of poverty and income distribution, and a summary of past World Bank involvement in the urban sector. Chapters II and III assess, respectively, the general issues of population, urbanization, and spatial strategy; and urban management and finance. Chapter IV reviews the provision of infrastructure services, and Chapter V examines shelter. Chapter VI draws together the recommendations on policy and investment priorities. B. The National Economy 2/ 1.05 In spite of limited natural resources and some interruptions due to recurrent wars and civil unrest in the region, the economy of Jordan (East Bank) has grown rapidly. Per capita GNP rose at 5.6% p.a. from 1960 1/ Report No. 4413-JO dated May 17, 1983. 2/ The report of the mission which reviewed the 1981-85 Development Plan (Report No. 4129-JO, dated May 1983) provides further information on the economy. The present section stresses points which are related directly to urbanization issues.  to 1979. Among the factors underlying Jordan's long term growth have been liberal economic policies, heavy investments in basic infrastructure and in education, migrant flows (into as well as out of Jordan), development of transport and business services to serve neighboring countries, and high levels of foreign assistance. Between the 1961 and 1979 censuses, employment in agriculture fell in both relative terms (by 26 percentage points of the total) and absolute terms (from 73,000 to 42,000 persons). The relative decrease was entirely counterbalanced by increases in the share of services (construction - plus 3 percentage points, trade - plus 3, transport and communications - plus 4, and, above all, in government and other services - plus 16 points) (Annex I, Table 2.10). A decline of 2 points in the share of mining was partly compensated by an increase of 1 point in manufacturing. 1.06 From 1975 to 1980, per capita growth in GNP accelerated to around 8% p.a., fuelled by (a) rapid growth in mining and manufacturing, (b) favorable external factors (leading to rapid growth in exports, workers remittances, and aid flows after the Baghdad Conference of 1978) and (c) high levels of investment in industry, infrastructure and housing. 1.07 Jordan's trade deficit is largely covered by worker remittances and foreign grants. Remittance income grew from JD 53 million in 1975 to JD 237 million in 1980 (Annex I, Table 1.3), when it essentially accounted for the difference between GDP (JD 869 million) and GNP (JD 1,074 million) (Annex I, Table 1.1). Net grant aid increased between the same two years from JD 138 million to JD 391 million. 1/ In the latter year, grant aid came to 43% of government resources. 2/ 1.08 The domestic economy is dominated by services, which accounted f'or around 73% of GDP in 1980 (text Table 1.1) 3 . The dominance of services is related to (a) Jordan's large commodity import surplus (which implies a high ratio of transport and trade to commodity production), (b) the Kingdom's growing regional importance as an exporter of transport services (transhipment) as well as of business and financial services, (c) the large role of government (recorded defense expenditures come to 11% of GNP), and to (d) a high level of construction activity due to high investment (around one third of GNP during the 1976-80 plan period). Mining and manufacturing have recently assumed increasing importance due largely to heavy investment in natural resource based projects and buoyant export demands. Manufactured exports are diversifying rapidly, especially to regional markets. While most industrial investment has been 1! Balance of payments estimate (Annex I, Table 1.3). 2/ The figure for grant aid in the government accounts, from which this percentage was calculated, is JD 215 million (Annex I, Table 3.2). 3/ Sixty-two percent if construction is excluded from services.  -3- Table 1.1; ECONOMIC STRUCTURE AND GROWTH Share of Sectoral Growth Rates GDP at Total of GDP at Factor Cost Sector Factor Cost Employment a/ 1975-80 (%) (1980) (X) (1979) (current prices) (% p.a.) Agriculture 7 10 20Lc Mining and Quarrying 4 1 20 Manufacturing 14 10 26 Utilities 2 1 41 Construction 11 16 38 Trade 18 10 20 Transport & Communication 9 8 26 Finance and Business Services 13 2 24 Public Administration and Defence 19 36_/ 21 Other Services 3 7 21 TOTAL 100 101 24 Source: Annex I, Tables 1.1 and 1.2. Notes; a/ Jordanians and migrants. b/ 39% of employees who are Jordanian nationals are in government service. c/ Taking an exponential trend to remove effects of the poor base year and favorable end year, this becomes 17% p.a. Total GDP rose at 23% p.a. at the exponentially smoothed rate. in large firms (with heavy public sector and foreign participation) small and medium scale manufacturers have grown more rapidly than anticipated during the 1976-80 period. 1.09 As in the past, Jordan's future growth will depend upon the market for Jordan's exports and labor, political events in the region and  maintenance of aid flows. The Bank mission which reviewed the 1981-85 Development Plan has forecast continued rapid growth during the 1980s, with GDP rising at 8.9% p.a. Given the limited opportunities for agricultural expansion, mining and manufacturing are expected to become the leading sectors, accounting for 45X of future GDP growth. Due to slackening growth in workers' remittances, GNP is forecast to rise more slowly than GDP, at 7.92 per year. Employment is forecast to rise at 3.9% per annum over the decade. Movements in the factors underlying these forecasts may be large and sudden. Maintenance of policies and institutions capable of flexible response must continue to be a major element of Jordan's development strategy. C. Poverty and Income Distribution 1.10 On the basis of income data collected in 1973/4, it was estimated that 18% of the urban population was below the Bank-defined urban poverty threshold in 1977. No national income distribution data are available for subsequent years. A 1979 household survey conducted in the Amman area (Annex I, Table 1.7) indicated that 11.5% of households were below the poverty threshold of JD 720 per household per year. 1/ The numbers were higher in the densely settled areas (refugee camps and squatter settlements registered approximately 17% of households below the poverty threshold) and in the Zarqa/Ruseifa area (19.5%). .2/ 1.11 Recent economic growth has benefitted most segments of the population. Able bodied persons willing to work have been able to earn irncomes above the poverty threshold. Wage rates for a Jordanian laborer 1/ On the assumptions that the Bank-defined absolute urban poverty threshold (based on the minimum cost of a nutritionally adequate diet containing locally used foodstuffs plus essential non-food items) defined for 1975 rose in proportion with the cost of living index, and that the average household size is 6.7, the household threshold in 1979 was JD 720 per year ($2,400) or around 26% of GNP per household of JD 2,744. On the assumption that the urban poverty threshold rose with the cost of living from 1979, it came to US$2,670 in 1980. 2/ Households in the lower income areas of Amman tended to be larger than the average. Since poverty is initially defined in per capita income terms and then grossed up to household income on the basis of average household size, if poor households are larger than average, the percentage of poor will be underestimated both because the number of poor households is underestimated, and because the size of those households is underestimated. The percentages of poor in 1979 were estimated from the distributions shown in Annex I, Table 1.7 using linear interpolations within class intervals.  - 5 - in Amman currently come to JD 3-5 per day. On the assumption of 250 working days, this amounts to JD 750 to 1,250 per annum. Since the average household contains around 1.5 workers, poverty tends to be concentrated among households with special disabilities such as health problems, having a female household head, only one -or no- income earner. For example, in the squatter settlements being upgraded under the First Urban Development Project (UDP-I), the number of workers per household is only 1.2 and 11% of households are without any worker, as compared with 8.7% in the Amman region as a whole. 1.12 The 1979 census sample (2% of the population) indicates that unemployment among Jordanians, at 8.5% of the labor force over 15 years of age, was higher than in any previous survey (6.8% in 1961, 2.8% in 1972, 2.1% in 1974, and 1.6 % in 1976). Some of the increase in employment may be due to differences in statistical coverage.Nevertheless, Jordan's growth has probably induced increased labor force participation, and has enabled more people to afford to remain unemployed while seeking suitable work. Unemployment is higher among persons of 24 years or less (56% of the unemployed) and among persons with primary education or less (66% of the unemployed). Disproportionate numbers of returning Jordanian workers are from the less-skilled categories, due to increased competition from workers from low wage countries in the labor importing areas. Competition also exists in Jordan. non-Jordanian workers can be retained at a cost, including return transport, of around three quarters of the cost of a Jordanian employee and immigrant labor accounted for 10% of domestic employment in 1979 and 17% in 1980. Employment problems may grow; the Jordanian (national domestic) labor force is expected to rise at 6.5% per annum during the 1980s as compared with employment growth of under 4%. If external and domestic demands are not very buoyant, there may be a rise in unemployment, (real) wage rates may fall in some occupations, and the proportion of families in poverty, relative if not absolute, may increase. These considerations suggest the importance of a focus on (a) employment generation, (b) improving the skills of the population, and (c) monitoring levels of service provision to low income groups. D. World Bank Involvement in the Urban Sector 1.13 Past World Bank involvement in Jordan has covered most major economic and infrastructure sectors. Recent operations have been oriented towards large export-oriented projects, and towards assisting the government with meeting its social objectives. Because of the highly urbanized nature of the country, most projects have had urban impacts. The first project with exclusively urban implications was the first credit for water supply (in Amman) in 1961. It was followed by four more water projects: a 1963 project which covered several municipalities, two for Amman (1973 and 1978), and a water and sewerage project for Zarqa/Ruseifa (1983). Two more water and sewerage projects are under consideration. In 1971, the Bank financed construction of the main motorway between the country's two main cities, Amman and Zarqa (loan of $6 million). In 1980, a loan agreement for $10 million was signed to  -6- support the new Cities and Villages Development Bank (CVDB) in providing funds and building the capacity of municipalities and villages to provide services for their populations. The primary concern of UDP-I ($21 million, also signed in 1980) is to provide improved shelter and associated services for very low income people in the greater Amman area, and also to stimulate income-earning opportunities through small business loans and vocational training (see also Chapter V, paras. 5.35 ff.). Also in Amman, ATMDP (loan of US $30 million, approved in mid-1983) will support investments in transport, road maintenance, solid waste, and municipal planning. This project was identified in the course of the urban sector review and incorporates support for several items identified by the review as meriting attention. E. Summary 1.14 These main findings concerning the national economy have special relevance for urban policies: (i) as in the past, strong economic growth will depend upon institutions and policies which will need to become more complex and formal, yet, given external uncertainties, be capable of flexible response; (ii) given limited opportunities in agriculture, mining and manufacturing must become leading sectors for economic growth and for employment generation; and (iii) unless foreign factors are extremely favorable, unemployment is likely to rise, as is the percentage of families in relative, if not absolute poverty. This implies that policies should pay attention to employment generation, and to the level of services received by the poor. II; POPULATION, URBANIZATION, AND SPATIAL STRATEGY A. Introduction 2.01 Given Jordan's resource base, the country is highly urbanized and will become more so. Development Plan statements regarding balanced development are not entirely congruent with likely future patterns. This chapter discusses issues of growth and migration, the rate of urbanization, and regional patterns and development strategies, including the continued preponderance of greater Amman. B. Growth and Migration 1. Recent Trends 2.02 Jordan (East Bank) has experienced one of the largest population growth rates of any country in the world since 1952. Growth was at 4.9X p.a. between the censuses of 1952 and 1961, and between the censuses of  -7- 1961 and 1979 (Annex I, Table 2.6). Al Much of the intercensus growth was undoubtedly accounted for by natural increase. This is currently estimated by the Department of Statistics at 3.5% (crude birth rate 48 per thousand, death rate 13 per thousand), up from 2.8% in the 1960s. 2.03 Migration has been a major factor. One-third 2/ to one-half million 3 persons moved from the West to East Bank following the 1967 war. As of 1979, around 40% of the Kingdom's population consisted of refugees, displaced persons, or their descendants (of whom almost half arrived following the 1967 war). 4/ The economic dynamism of the East Bank was also a magnet for migrants during the 1950s and 1960s. 2.04 External migration (to and from countries outside Jordan/Palestine) has also been significant. From 1968 to 1977, departures of Jordanians recorded by the immigration authorities exceeded arrivals by 418,000; the largest net departures were in 1976 (82,800) and 1977 (104,300). Since 1978, arrivals have exceeded departures by a slight margin. 5/ In 1980, there were about 300,000 Jordanians working abroad, most of them in the oil producing countries of the Gulf. -I Allowing for dependents, perhaps 500,000 to 750,000 Jordanians were living abroad, plus 45,000 university students. 1/ It should be noted that 1952 census did not include foreigners present in the country or members of armed forces and their families living in barracks, so that the growth rate between 1952 and 1961 is somewhat overstated. 2/ Department of Statistics, population estimates made in 1981. 3/ Government estimates from Al Dastour cited by Dar El Handasah, Labour Market, Task 1.6 Industrial Programming Study. 4/ United Nations Relief and Works Administration, Palestine Refugees in Jordan, January, 1980. 5/ The figures for arrivals and departures are subject to considerable uncertainty (thus, for example, migration statistics and civil aviation statistics on passengers arriving and departing are subject to substantial differences in particular years). 6/ The Ministry of Labor estimates 305,400 in all countries in 1980. Cited by Jawad Anani and Taysur Akail Jaher, Jordan's Experience and Policies in the Field of Reverse Transfer of Technology; Amman, December 1980, p. 13. 261,500 of these were in other Arab countries. The World Bank Technical Assistance Division study on "International Labor Migration and Manpower in the Middle East and North Africa" estimated that there were 139,000 Jordanians and Palestinians working in labor-importing Arab states in 1975, with 503,000 Jordanians and Palestinians living there at that time. They forecast the numbers of Jordanian workers in Arab countries at 211,000 to 263,000 for 1985, and the Jordanian population there at 1,305,000 to 1,333,000 in the same year.  -8- Considerable numbers of commercial and professional people came to Jordan following the events in Lebanon in 1976, although many of the. have left since. More recently, large numbers of non-Jprdanians have immigrated to take up low wage jobs in agriculture, construction, and services opened tip due to the investment boom in Jordan and low supply elasticity of Jordanian workers. In 1979, the Ministry of Labor issued 26,315 work permits; in 1980, 79,566. Net migration flows could easily still be adding one to two percentage points to natural increase. 2. Future Prospects I2.05 Future population trends will depend on such highly uncertain factors as; (a) natural rates of increase of Jordanians in Jordan and aibroad; (b) political events in the region; (c) the demand for Jordanian labor abroad (which in turn depends upon economic growth in the main labor importers, and the competitiveness there of Jordanians versus other nationalities); and, perhaps most important of all, (d) the growth of attractive employment opportunities in Jordan. 2.06 For purposes of assessing Jordan's future population, we have identified three scenarios which imply a range in the year 2000 population from 3.8 million to 5.4 million. 1y The low scenario assumes that the Plan review mission's 1980-90 forecast of employment growth at 3.9% p.a. will continue until the end of the century, and an increase in the employment/population ratio by 25Z to reflect higher f'emale participation and lower dependency ratios. The average annual rate of net emigration (25,000) implied by this scenario and the assumed natural rate of increase set out in para. 2.07 below is slightly lower than the average of net departures of Jordanians from 1968 to 1974 before the large increases of 1975-77. It is, however, substantially higher than the current rate, said to be around 10,000 per year. This scenario implies an average rate of population increase of 2.8% p.a. It might be considered the "most favorable" one in the sense that there would be full employment and rising per capita incomes, and continued growth in remittance income. 2.07 The medium scenario, and the base assumption for this review, assumes no net migration. With 52% of the population under 15 years old, and high fertility and declining death rates, natural increase is now high and can be expected to remain high in the medium term. Nevertheless, declining infant mortality, more education of females, and increased female labor force participation should lead to fertility declines. This scenario assumes population growth of 3.8% p.a. up to 1985, 3.42 from 1985 to 1990, and 3.0% from 1990 to 2000 (i.e., an average of 3.4% over the whole period). This implies a year 2000 population of 4.3 millions compared with 2.1 millions in 1979. If this population is to be fully employed at rising per capita incomes, special emphasis will be needed on employment generation in defining industrial strategies, in selecting technologies, etc. 1/ The Futures Group made projections of the year 2000 population of 3.8 to 5.1 millions with the variation depending upon fertility changes (each projection assumed average annual emigration of 10,000).  -9- 2.08 The high scenario (year 2000 population of 5.4 million) assumes that all Jordanians now abroad would return to Jordan and that the rate of natural increase of Jordanians abroad is 2%Xp.a. The average rate of increase implied by this scenario, 4.5% p.a., is lower than the average achieved over the last three decades. It is doubtful that the economy could support such growth at an increasing standard of living, especially as major causes of past growth have been migrant remittances and assistance from several of the countries which have welcomed Jordanian labor. This scenario would imply heavy unemployment and sharp declines in living standards. C. Rate of Urbanization 2.09 The urban population, defined as persons living in localities with populations of 5,000 or more, rose from about 37% of the total in 1952 (see Annex I, Table 2.2, for the exact definition of urban population in 1952) to 52% in 1961, and as of 1979 stood at 70%. 2.10 The rate of urbanization will continue to be high as a result of the continued decline in agricultural employment. Urban population would rise by 2 million between 1979 and 2000 on the base scenario, or at 4.1% p.a., compared with growth of 6.7% from 1961 to 1979. While expected growth is less in percentage terms than past growth, it would occur on a higher base and, because incomes are rising, it would involve a higher expected level of services. If the base scenario would require substantial urban growth management efforts, the high scenario would require truly extraordinary ones, since many more people would need to be serviced at lower per capita costs. D. Spatial Patterns and Development Strategies 1. General 2.11 The spatial objectives of the 1981-85 Development Plan are to encourage; (a) more rapid growth of rural versus urban areas, (b) more rapid growth outside than inside the Amman-Zarqa conurbation and (c) decongestion of Amman city. The main problems identified by the plan which underlie these objectives include (a) perceived increased income inequalities between different regions and within particular cities, with the extremes of wealth and poverty not only being relatively wider in large than in small centres, but with living conditions of the poor being worse there as well, (b) distraction of youth from constructive activities, (c) expectations of the urban poor rising too fast to be satisfied, (d) congestion of urban services, and (e) relative reduction in quantity and quality of social services provided to rural areas compared with urban areas. Past plans have identified several measures to bring about more balanced regional distribution including (a) commencement of regional planning (see Chapter III); (b) giving a larger role to local governments to plan and control local activities (also see Chapter (III); (c) encouragement of economic activities outside Amman, and (d) provision of better services (health, education, transport, etc.) to the remoter areas. Before discussing these matters, it is worth describing the existing spatial patterns.  - 10 - 2. Existing Spatial Patterns 2.12 The incidence of rainfall and availability of water generally has resulted in confinement of most of Jordan's population to the northern and western areas of the country. Within this area, the towns of Irbid, Amman, Zarqa, Karak, Tafila, and Ma'an are located on an axis running almost due north-south (see Map IBRD 16511). In the soutb lies the town and port of Aqaba, the country's only sea outlet. Urban populations are highly concentrated in a few major centres. The largest municipality, Amman, accounts for 29% of the national population, and 41% of the urban population (1979 figures). The 12 next largest settlements with populations of 20,000 or more account for 31% of the country's population (Annex I, Table 2.5). The next largest centre has only 12,495 people. Nine of the large centres, with an aggregate of 1.1 million people, or about half the total population of Jordan and almost three quarters of the urban population, are located in the Amman-Balqa region, whose preponderance is thus overwhelming. 2.13 Although reliable comparable economic data are unavailable on different regions or cities, it is possible to sketch briefly the patterns and determinants of their growth. -/ The first and most outstanding spatial fact is the high and increasing primacy of the Amman area. 2 Amman governorate's share of the East Bank population increased from 37% in 1952, to 48% in 1961 and to 55% in 1979, while the share of all other governorates declined. _/ 2.14 The primacy of the Amman region was based initially upon Amman's status as the capital, and consequent location there of government offices, military installations, diplomatic representatives, and bulsinesses serving these agencies. In 1961, fully 42% of employment in l! More detailed information concerning development patterns and planning issues in Amman, Irbid, and Aqaba will be found in Annex IV. 2/ Consistent statistics are not available for all years for the same areas. In 1979, the population of the Amman-Balqa region was approximately 1.3 million or 62% of the national total. Its urban population was 1.125 million or 75% of the total urban population. The Amman-Zarqa conurbation, including the immediate suburbs of Amman and the communities between Amman and Zarqa, accounted for approximately 49% of the country's population, and 67% of its urban population. Amman governorate had a population in 1979 of 1,185,700 (1,046,800 urban), which was 55% (69%) of the national total. The longest series of data is available for Amman governorate, and so figures for it are used in the text. 3/ The census assigns to their governorate of birth members of the Armed Forces and their dependents' who are living in military installations. This probably tends to overstate population of areas outside Amman, and understate Amman's population.  - 11 - Amman governorate was in government and miscellaneous services (Annex I, Table 2.10); the next highest percentage was in Ma'an (26%). The transport and communications links associated with the capital provided a base for trading, commercial and industrial activities. Government employment does not underlie the growth of Amman's primacy since 1961, however. Indeed, Amman is the only governorate in which the share of government employment in total employment declined between 1961 and 1979, to the point that it is now the lowest of any governorate. The location of several refugee camps in the region after 1948 and 1967 was an important source of growth. Rural-urban migrants were attracted by the area's employment opportunities, and the presence of an increasingly diverse pool of labor in turn acted as an additional incentive to invest there. At present Amman enjoys substantial agglomeration economies. Eighty three percent of industrial value added was produced in Amman in 1979. The concentration of growth in the suburbs next to Amman Municipality, rather than being spread more widely throughout the region, provides additional evidence of the importance of agglomeration economies in the capital city. 2.15 Irbid is Jordan's third largest town (the second, Zarga, is only 20 km from Amman and is best treated as part of the Amman region). Including surrounding villages, greater Irbid had a 1979 population of 158,000. It is the main service centre for the country's largest agricultural region, it has a well educated population, and possesses some light industry (building materials, repair services). It is also the location of Yarmouk University, about 10 km from Irbid city. With limited employment growth in agriculture, without major advantages in terms of raw materials, Irbid's future development will depend heavily upon growth of industrial activities. 2.16 Aqaba with an estimated 1981 population of 40,000 (up from 27,000 in 1979), is the third largest town outside the Amman region. It has grown rapidly since the opening of the port in 1957. The upsurge in traffic to Iraq following the outbreak of hostilities between that country and Iran provided a major growth impetus. Aqaba's development will continue to depend on port-related activities and on the establishment of major industries which secure advantages from location near the port. Beach-based tourism potentials are limited by likely pollution from heavy industry and port activities. Aqaba may realise some agglomeration economies 1/ although its location away from major domestic markets and labor supplies, and its hot climate, do not make it an especially attractive location for small industries. Potential shortage of land (aggravated by the low density housing developments noted in Annex IV), and competition for water with a major proposed phosphate development at Shidiya, impose further constraints. 1/ The Southern Region Project (SRP) report (see para. 3.29 below) projects the year 2000 population of Aqaba at 150,000.  - 12 - 3. Spatial Development Strategies 2.17 The basic facts which need to be borne in mind in considering opportunities for government to affect spatial development patterns are that: (a) population distribution will tend to follow employment opportunities (rather than vice versa); (b) numerous activities which generate large amounts of employment, such as construction, personal services, repair services and many financial services, follow rather than lead population concentrations; the effect of policy on their location is largely indirect; (c) some employment is necessarily located near to specific natural resources (agricultural, mining, and transport employment particularly); "spatial" considerations may affect the timing of the development of these resources, but not their location; (d) the activity whose location is probably most subject to direct policy influence is light industry; (e) expected increases in employment in light industry are limited, and will depend critically upon Jordan's success in competing for regional export markets; (f) the most important locational incentives for light industry are good transport and communications, a large pool of appropriately skilled labor, and availability of a variety of infrastructural, financial and repair services; in essence, the availability of properly planned, and efficiently run urban centres of sufficient size to attract diverse economic activities and generate agglomeration economies; and (g) given the large scale of greater Amman and the small size of other urban settlements, the main "spatial development" questions are whether there is significant scope for promoting light industrial development outside the Amman region, and, if so, where, and at what cost. 2.18 The objective of decongesting Amman by alleviating pressures on services is in conflict with the objective of locating activities away from Amman. Existing programs for increasing Amman's water supplies,  - 13 - servicing additional land for industry, and improving the capacity of Amman's transport system, all of which are now underway, automatically increase the attractiveness of Amman relative to other centres. 2.19 Arriving at a clear policy on these matters requires national economic planners to take explicit account of spatial considerations. These matters are not, and cannot be, dealt with by regional planning as it has been practiced to date, i.e. by focusing on development prospects for specific regions, one region at a time. There is no substitute for the autbority responsible for developing national plans (i.e. NPC) to concern itself explicitly with spatial issues. 4. Past Spatial Policies 2.20 To date, the government has had more success in spreading social services than in spreading employment opportunities. Educational opportunities have been increased over the last two decades to the point that virtually all children complete primary education and regional differences in illiteracy have declined. Health services have also become more widely available, although infant mortality remains higher in rural than urban areas* Major programs for improvements in roads, electricity, and telecommunications have brought those services to many formerly remote places. Government's efforts are also apparent from the pattern of budgetary expenditures. Annual public sector investments per capita rose less rapidly in Amman than other governorates during the 1970s and towards the end of the decade were lower there than elsewhere. The 1981-85 Development Plan proposes that total investment per capita will be less than half as much in Amman as other governorates (although a large share of "national" investments, which come to 46% of the total, may accrue to Amman (see Annex I, Table 2.8)). 2.21 The spread of educational opportunities to the remotest areas, and improvements in transportation and communications links, have been successful in enabling rural people to participate in the wider economy by migrating to Jordanian cities or abroad, where they can earn substantially higher incomes than in agriculture. To this extent, they have improved the distribution of the benefits of development at a personal level, while stimulating increasing imbalances in population among regions. 2.22 As noted above (para 2.14), the wide regional distribution of government employment has not stopped the concentration of population in and around Amman. The government's success in affecting the spatial distribution of non-government employment is limited. Interest in spreading development has been one element in decisions to proceed with several large-scale projects based upon site characteristics outside Amman (i.e. Rashadiya Cement Project at Tafila, potash at the Dead Sea, phosphates at Al Hasn, the fertiliser and timber factories at Aqaba). In only one major case, however, location of the glass industry at Ma'an, have regional balance considerations overridden normal investment criteria. Incentives to private firms to locate outside Amman are minor;  - 14 - two years extra tax boliday, and favorable Industrial Development Bank loan terms 1/. The results of these incentives have been modest, and most investments continue to be concentrated win the capital area. (See Annex I, Table 2.7, for the regional distribution of IDB operations.) 2.23 On the other hand, government has not used some potentially powerful tools to accomplish spatial distribution objectives. Locational considerations enter industrial licensing decisions only to the extent that they affect financial profitability. Government-sanctioned investments in industrial estates are in apparent conflict with the more general objective of regional distribution. Thus, the Jordan Industrial Estates Corporation (JIEC), which was established in 1980, is conistructing a massive industrial estate at Sahab, a south eastern suburb of Amman. 5. Scope for Wider Spatial Distribution of Industry and Population 2.24 As regards employment distribution, given greater Amman's predominance in light industrial activities, the questions are whether it is feasible and desirable to allocate to alternative centres enough of the future investment in those activities to enable the designated cenitres to achieve self-sustaining growth within a reasonable period of timae. 2.25 Available data on costs and constraints of different spatial paltterns do not provide clear guidance on these questions. The most significant physical constraint is water. In general terms, the main population centres in the northern part of the country now, or soon will, draw their incremental water supplies from the same sources (Azrak wells, Yarmouk River). It is possible that the supply of water to Amman via the proposed pipeline from the East Ghor Canal will be significantly more costly than water delivered to the northern areas, due to heavy capital and pumping expenditures. In the south, water supplies are more discrete, and water availability places more definite limits on the growth of specific towns (e.g. the types and amount of industry which can be developed at Aqaba will be constrained by development of phosphates and associated water use at Shidiya). 2.26 Data on proposed infrastructural investments are insufficient to permit any judgement whether unit costs of urbanization differ systematically among towns. The widespread perception that Amman is suffering major congestion has some truth. The accuracy of the perception 1/ The IDB participates in around 80% of industrial projects employing 5 persons or more, and since 1978 has offered a 12 lower interest rate, and 1 to 1 1/2 years longer grace period, no commitment fee, and a debt equity ratio of .65/.35 compared with the normal 1/1 to enterprises establishing in "undeveloped" areas (i.e. outside Amman, Aqaba, and the Baq'aa depression).  - 15 - that the remedy is immediate "high" expenditure on a variety of infrastructures is, however, more questionable. Providing much improved services in smaller centres may also involve high per capita costs due to low population densities and the desire for costly standards. 2.27 So far as the benefit side is concerned, Amman is not so large that it would be economically necessary to start countermagnets elsewhere. Nevertheless, it is useful to explore the likely outlines of an effective policy to pursue that goal. 2.28 The scope for increased employment in light industry -- the natural focus for affecting spatial distribution of employment -- is quite limited. The Plan review mission has forecast annual growth of GDP in "other manufacturing" (excluding chemicals, and non-metallic mineral production which is dominated by cement) by 12.7% p.a., and of employment by 2.12, during the 1980s (jobs increasing by only 7,500 or 750 per year). I The forecast rate of productivity increase (10.3% p.a.), which is based on recent trends, may be too high, as recent productivity increases may have resulted partly from replacement of informal sector by formal sector firms, a development which cannot be repeated on the same scale in the -future. If productivity increases by only 5% p.a., however, the increase in "other manufacturing" jobs during the decade would come to 33,000 or 3,300 per year. Assuming that all "other manufacturing" investments were located in industrial estates and a (modest) ratio of 150 workers per hectare, the annual demand for serviced land would come to 5 ha to 22 ha on the above forecasts. The existing and planned expansion of serviced industrial land at Sahab (77 ha by 1984 costing JD 15 million, 257 ha by 1990) Zarqa (11 ha costing JD .75 million) and Amman Municipality (JD 8.25 millions are included in the 1981-85 Plan), imply that the scope for significant light industrial expansion outside the Amman region is limited in the near term if a large-scale surplus of serviced industrial land is to be avoided. 2.29 There is no incontrovertible rule about what constitutes sufficient size to realize agglomeration economies, let alone optimal city size. Given the above forecasts and projects being planned, and the importance of agglomeration economies for light industry, however, it may be prudent to introduce a policy of building up centres to compete with Aman by commencing with one centre. This would enable the authorities to focus effort on the package of policies and investments required, and -inimize the delays until the critical mass for self-sustaining growth was achieved. Other centres could be considered later, if the initial experience were successful. 1/ In 1980, employment in other manufacturing was estimated at 31,900, compared with 4,700 in petroleum and chemical manufacturing and 6,700 in non-metallic manufactures.  - 16 - 2.30 The main choice of centre lies between Irbid, where creation of industrial employment opportunities would reduce migration from the region, and Aqaba, which has clear advantages as regards international transport, but whose growth will require immigration of workers from other parts of Jordan (or abroad). Provided uncertainties about demand for its services could be reduced, the Irbid Industrial Estate would appear to provide a sound initial step in promoting Irbid 1/. 2.31 Other possible centres, such as Ramtha (1979 population of 27,292), Mafraq (21,399), Tafila (12,495), Karak (11,805) and Ma'an (11,308) are less well located than Irbid and Aqaba, or have smaller existing populations, making them less attractive as potential industrial growth centres to serve national and international markets. 6. Realizing Local Potentials 2.32 While there may be a case for attempting to concentrate "footloose" light industrial investments, this should not conflict with raising incomes and stabilizing populations in smaller places by identifying and realizing the economic opportunities which exist there. The effectiveness of sprinkling major industries to stabilize existing populations in rural areas is dubious. Such industries draw most of their management and professional staff from elsewhere. Most of their requirements for construction labor are met by imported labor; so are those for operational labor, unless special training programs are mounted. On the other hand, efforts to stimulate the efforts of entrepreneurs native to and resident in those areas to take advantage of local resources and market opportunities may engender a more satisfactory development pattern. The Cities and Villages Development Bank intends to assist its borrowers (village and municipal councils) to encourage productive activities. A study on types of activities and investment criteria will be partly financed by the Bank-supported CVDB Project. There may also be scope for focusing more attention on identifying and supporting resident entrepreneurs and reducing constraints on their initiative. These issues will receive further discussion in the report of the Bank mission which studied opportunities for regional development in Jordan. 7. Preponderance of Greater Amman 2.33 However successful policies to locate industry outside greater Amman may be, the scope for securing major changes in population distribution in the medium term is limited, given Amman's size, comparative advantages, and limited absorptive capacity of other towns. For example, on the assumptions that the natural increase of Amman's urban population is identical to the national figure, and that Amman's growth is restricted to its natural increase, other urban centres would face extremely high rates of growth (see Table 2.1 below). I/ Hashemite Kingdom of Jordan, Feasibility Study of Irbid Industrial Estate (Japan International Cooperation Agency) Draft Final Report, May 1981.  - 17 - Table 2.1: GROWTH IN URBAN POPULATIONS (Scenario II, ASSUMING NO MIGRATION TO AMMAN) 1979-85 1985-90 1990-2000 A. Percentage Growth per Year Amman Governorate 3.8 3.4 3.0 Other Governorates 7.6 5.9 4.5 B. Growth ('000 per year) Amman Governorate 43 48 53 Other Governorates 42 47 52 2.34 If this extreme strategy were successful, Amman governorate's share of the urban population would fall from 69% in 1979 to 58% in 2000. But the annual increases in Amman's urban population would still exceed those of all other urban centres combined for the remainder of the century. Management of Amman's growth will therefore continue to be the major task of urban development in Jordan for the next couple of decades. E. Summary 2.35 The basic findings emerging from this chapter may be summarized as follows: (i) population growth will depend on numerous factors, many of them external, and there is a large range of possible outcomes; (ii) if incremental population is to be fully employed at rising per capita income, special emphasis must be given to employment generation, especially through light industry and business service activities. These activities depend upon efficient provision of services in urban areas of sufficient size to realize significant agglomeration economies; (iii) greater Amman is the powerful urban agglomeration that will be the main engine driving future Jordanian development. Ensuring an efficient greater Amman will have a major impact on growth of the national economy; (iv) there is only limited potential for self-sustaining development of countermagnets to greater Amman in the near term. Realization of this potential, if desired, would benefit from initial emphasis on building up one urban centre outside Amman, the adoption of a national strategy for industrial location, and the creation of effective mechanisms for its implementation; and (v) better exploitation of resources in smaller localities would benefit from a focus on encouraging and developing local entrepreneurship there.  - 18 - III. URBAN MANAGEMENT AND FINANCE A. Introduction 3.01 The Jordanian government is strongly committed to economic development and has successfully implemented strategies enabling the Kingdom to progress in spite of a tumultuous external environment. The public administration apparatus which has accomplished this is highly centralized. Responsibility for many activities has been allocated to quasi-independent corporations under the leadership of energetic individuals. The dynamic tension between, on the one hand, the need for coordinating such corporations, and, on the other, the desirability of giving clear responsibilities for planning and implementing specific sectoral programs to specific agencies, will never be finally resolved. Yet, given the increasing importance and complexity of the economy, there may be gains from attempting to give more weight to considerations of coordination and balance, especially in greater Amman. 3.02 The evolution towards specialized implementation agencies has been due partly to fundamental factors such as economies of scale in the provision of certain services, and partly to administrative weaknesses of the agencies initially entrusted with providing them. The 1981-85 Development Plan diagnosis of general public administration problems applies equally to local governments. As stated in the plan, these problems include a multiplicity of institutions with overlapping responsibilities, overcentralisation of authority, difficulties in coordinating different agencies, lack of efficient management systems, and a series of weaknesses in personnel policies, including inadequate payscales. The plan proposes that these issues be reviewed by a Royal Comuission. This is the most important single plan proposal for strengthening government's capacity to deal with the problems of growth and development. 3.03 Given the importance of strengthening public administration in general, this chapter focuses on local government institutions, local government finance and the planning process as it impinges on urban development. B. Local Government Institutions 1. The Existing Framework 3.04 For purposes of local administration, the country is divided in two major ways. First, under the Ministry of the Interior (MOI), five governorates (with sub-governorates, districts, and sub-districts) are concerned with security matters, provision of services outside municipal areas, and some regional planning functions. Second, reporting to the Ministry of Municipalities and Rural Affairs and the Environment (MMRAE)  - 19 - there are around 125 municipalities (officially with minimum populations of 2,500 but sometimes less), and over 200 villages (with minimum populations of 1,000). The MMRAE is also responsible for regional planning. The Amman Municipality is in a separate category, as its mayor carries ministerial rank. There are approximately forty government corporations or authorities providing services (e.g. three major agencies providing water) or coordinating functions (e.g. the NPC). 3.05 Municipal and village councils normally comprise 7 - 12 councillors. In accord with a government desire to widen the basis of decision-making, councillors in most areas (Amman is the exception) are now elected, although governors and the MMRAE also appoint some council members. Chairmen (mayors) are appointed by the Prime Minister, usually from nominees by the councillors from among their number. The size of municipal staffs varies depending upon the size of the municipality. In the case of most smaller centres, regional delegations of the MMRAE assist councils in technical tasks (e.g. planning, designs) and budgetary procedures. Departmental organization of municipalities is subject to decision by the councils. The dynamic Irbid council has, with the assistance of staff from Yarmouk University, defined an organization structure together with job descriptions suitable for its functions. In Amman, efforts are underway to implement recommendations by international consultants l/. Elsewhere, administrative arrangements appear to have evolved in a less sophisticated fashion. 2. Local Government Functions 3.06 Under Law 29 of 1955, municipalities were allocated a wide range of functions (listed in Annex I, Table 3.1). At least since the 1973-75 Development Plan, central government has stated that local governments should play a major and expanding role in supplying services to local populations and stimulating local growth, especially in the smaller centres. Simultaneously, however, many major municipal functions have been or are being ceded to central ministries or special agencies (e.g. water and sewerage, electricity, education, health, emergency services, and buses). The most significant public services involving major budgetary expenditures which continue to be provided by all municipalities are construction and maintenance of local roads and garbage collection and disposal (see Chapter IV). Local governments outside governorate and district capitals are responsible for initiating the establishment of health and education facilities in their areas as they finance one half the investment cost of such facilities (the remainder of the investment cost, and all recurrent costs, are supported by the relevant ministries). Increasingly, the most significant remaining municipal tasks are regulatory; municipalities have responsibilities for a wide range of licensing activities, including, most importantly in the development context, planning and building controls. 1/ Peat, Marwick, Mitchell & Co., Municipality of Amman, Organization and Financial Study, 30 November, 1978.  - 20- 3.07 The loss of local government functions has been partly due to growth and developments economies of scale in providing specific services (e.g. water, electricity) to a growing population, and demands for a higher and more consistent quality of services as incomes have risen, have made creation of special agencies more efficient than continued reliance on multi-functional local governments. Special agencies have also benefitted from not being subject to many legislative, financial and personnel constraints which apply to local governments. 3. Administrative Issues 3.08 Jordanian authorities are aware of the administrative problems facing local governments. The diagnosis made for Amman by Peat, Marwick, Mitchell & Co. (PMM) also applies to other larger municipalities. Major problems identified by PMM included; absence of formal job descriptions or statements of authority allocated to different posts, little real delegation of responsibility, highly centralized procedures (requiring signatures on even minor matters at the most senior levels), poor internal coordination among departments, little formal medium or long term corporate planning, lack of management information or formal management reports, low salaries, lack of adequately qualified staff, inadequate training, absence of career structure and poor staff motivation. 3.09 The main recommendations followed clearly from the diagnosis; an articulation and streamlining of organization (more council committees, with committees to concern themselves more with policies and strategies than day-to-day business; introduction of three main divisions grouping different municipal departments, reporting to a new chief executive officer, with the Lord Mayor retaining responsibility for strategy, policies, raising funds, etc.; creation of a management committee of senior department heads to improve coordination), better financial planning, development of larger revenues from fewer and more elastic sources, complete overhaul of staffing arrangements including training and career development programs and a new salary scale (independent of the government structure). On salaries, PMM estimated that attracting amd retaining appropriately qualified senior staff in competition with opportunities abroad, in the private sector, and in public sector agencies would require at least doubling existing salary levels; the wage bill overall (including increase for other staff and costs of additional staff required) would need to rise by 60x. PMM's analysis indicated that these costs could be covered by their recommended improvements in tax collection and tax increases. 3.10 In brief, PMM recommended a complete overhaul of every aspect of municipal government. Such an overhaul would evidently require concerted attention and action at the level of central government as well as the municipality. This has not as yet been forthcoming. Although public sector salaries were raised by 25% in 1979, this was not  - 21 - sufficient to make them fully competitive and public sector salaries have since become less competitive. The Lord Mayor appointed in 1980 made strenuous efforts to increase the efficiency of municipal operations but his proposal to improve salary scales remained unimplemented a year and a half after it was submitted to the government. He tended to continue the pre-existing style of centralized administration (see Annex I, Table 3.5A) with a greater attention to immediate problems than to long-term planning. His successor (appointed in February 1983) has been making organizational changes along the lines recommended by PMM (Annex I, Table 3.5B). He is also seeking to deal with the staffing problem through improving salaries and appointing some key staff on contract. 4. Options for Strengthening Local Government 3.11 The priority assigned to strengthening local government administration depends upon how many and how important are the functions assigned to them. There are also choices as to the allocation of responsibilities among different central government ministries. On the face of it, there would appear to be gains from reducing the number of agencies (e.g. in water) and allocating some responsibilities more clearly (e.g. between the MOI and MMRAE for planning and local services, between the NPC and MMRAE for regional planning, etc.). 3.12 The existing system, complex, confusing, and inefficient as it might seem to outsiders, may meet political needs which transcend narrowly defined efficiency objectives. It may also reflect local aptitudes more accurately than would an ostensibly more "streamlined" system. Thus, for example, there are serious difficulties in delegating responsibilities within many organizations. This places strict limits on the number of functions which any single organization can perform efficiently and is a factor which tends to lead to institutional proliferation. Placing implementation agencies under the control of dynamic individuals who draw their support from the highest political levels, while it ensures that they are highly motivated and responsive to government's demands for development, also means that decision-making depends heavily upon personal contacts among a restricted group of persons. As the country grows and interdependencies among agencies increase, the need for more systematic coordination, informed by skilled staff work, will become ever more apparent. The extent to which local governments (through their planning functions) will play such a coordinating role in specific areas needs to be assessed. 3.13 The proposed Royal Commission on administrative reform could deal with these questions. It could profitably carry out a specific sub-study on local government functions and an action program to enable local governments to perform them. Such a study could, inter alia, examine the scope for further differentiating between the functions performed by different sized municipalities. In the meantime, given the large size and complexity of Amman, its role as a leader which can be emulated by other municipalities, and the existence of concrete proposals for improvements, the government should provide maximum support to Amman  - 22 - Municipality in defining and implementing the changes in its organization, staffing, and finances required to enable the Municipality Ito perform its planning and service supply functions efficiently. C. Local Government Finance 3.14 The two fundamental local government finance issues concern (a) the amount of finance required and (b) the means for efficiently raising the required revenues. The first issue requires a decision upon the functions to be carried out by local governments, and a decision upon whether they will be allowed to pay the salaries necessary to attract and retain staff of the caliber required. These points have been discussed above. Before turning to the second issue, it is worth summarizing the existing status of local government finance so far as this can be assessed from scarce available data. I. The Current Situation 3.15 Consistent with their modest role, local governments have minimal budgets, with total revenues amounting to only 6% of the central government budget (compare Annex I, Tables 3.2 and 3.3). Total local government revenues in 1979 came to JD 24 million, or JD 16 per capita of the estimated urban population. Amman's receipts came to JD 10 million, or 40% of the total, and are slightly lower on a per capita basis (JD 15 per capita) (Annex I, Table 3.4). In 1979, 63% of local government revenues were "'ordinary revenues" of which around two fifths were in the form of taxes collected by central government but earmarked in whole or in part for local governments, i.e. land and building rental tax, and "fuel tax" (which includes a portion of fuel taxes, import duties and registration taxes on vehicles allocated to local governments), and the balance in the form of a variety of locally raised fees and charges. The remaining 37% were in the form of government grants (around one third) and loans (mostly from the Municipal and Villages Loan Fund, since become the Cities and Villages Development Bank). The land and building tax is paid net of collection costs to the municipalities where it is raised. "Fuel" tax is distributed among municipalities following an annual cabinet decision which is based upon population, amount of revenue collected in the specific municipality, and needs of municipalities. 3.16 Local government budgets are controlled meticulously by the central government (MMRAE and Ministry of Finance) with a minimum of autonomy left to individual municipalities. Surpluses and deficits, and expenditure patterns, therefore reflect central government views as much as those of municipal officials. Apart from Amman Municipality, the mission found no forward financial planning of municipal finances, or analyses of expenditure implications of different programs. Instead, the main emphasis of financial planning and control within local governments is upon keeping within approved budgets rather than assessing needs, formulating financial plans to implement desired programs, setting appropriate levels of fees for services provided, or using financial  - 23 - information to monitor performance in implementing programs. No reliable information is regularly available on total local government receipts and costs and the figures in Annex I Table 3.3 need to be treated with caution. 3.17 The main basis for central government review of recurrent budgets appears to be comparison of proposals with the previous year's approved estimates, with allowed variations depending upon the anticipated effects of price and salary changes, rather than discussion of growth or decline in specific programs. On the side of investment expenditures, the MMRAE brings the attention of municipalities to specific problems (e.g. street paving, replacing rental buildings with owned ones, fitting in with regional plans, encouraging productive projects), and so exercises some influence over municipal investment programs. No systematic analysis apparently goes into defining the items to receive priority, however. In the future, when large fractions of development expenditures will be underwritten by the CVDB, more explicit criteria will be brought to bear upon local government investment decisions. 3.18 Information is not available on the uses of recurrent and development expenditures by activity. From interviews with municipal officials in Amman, Aqaba, Irbid and Zarqa, it appears that collection and disposal of solid waste is the most important single recurrent cost item for the larger municipalities. The 1981-85 Development Plan forecasts indicate that the largest local government investment expenditures are on transport (Annex I, Table 3.6). There are important differences in the relative importance of other items among different municipalities, however. Twenty-seven percent of Amman's planned capital expenditures are on slum upgrading and sites and services under the Bank-supported UDP-I, an innovative activity which naturally does not yet appear in plans of other local governments. Construction of schools and public buildings are more important in the other municipalities and the villages. 2. Future Prospects 3.19 From 1976 to 1980 (the only period for which data are available), ordinary revenues and recurrent and investment expenditures all rose rapidly; recurrent surpluses fluctuated from 68% in 1978 to 51% in 1980 (Annex I, Table 3.3). The 1981-85 Development Plan forecasts ordinary receipts to rise from JD 23.8 million in 1980 to JD 48 million in 1985, and recurrent expenditures from JD 11.7 million to JD 26 million, implying a decrease in the recurrent surplus from 51% to 45% of ordinary receipts. 3.20 The adequacy of the increase in recurrent expenditures (about 8% per year in real terms) could not be assessed in the context of this study. Certainly, substantial increases will be necessary. Urban  - 24 - populations are rising rapidly, as are desired service standards. As noted earlier, salary levels will need to increase, especially for some technical and managerial staff if they are to be attracted to public service and motivated to give it their full-time energies. 3.21 Ordinary revenues are forecast to rise at the same rate as central government receipts. Although the percentage increase seems somewhat optimistic, there is scope for substantial increases in municipal revenues. Property values have not been reassessed since 1966, and the yield of land and building taxes amounted to only JD 2 million in 1979. The 1981-85 Development Plan indicates that property will be reassessed. Such a reassessment could easily result in tripling the contribution of this tax from 12% of ordinary revenue/ in 1979, and also raising ordinary revenues by more than a third. 1 It is important that this be done, not only for revenue purposes, but also in order to stimulate denser and more economic development patterns in urban areas. Liberalization of rent control would also serve to increase revenue from this source. Powers under the 1966 planning law to levy betterment charges to recover costs of developments could also be exercised. Means for increasing the collection of household solid waste charges could also be explored. 3.22 Consideration should be given to having at least the larger municipalities take responsibility for assessment and collection of property taxes. Officials in Amman and Irbid suggested that the larger the proportion of their revenues under control of the municipalities, the more likely are they to engage in responsible planning of their development and operating activities. They may also be more willing to raise necessary revenues than central government, which is further removed from the needs to be served. 1/ Land tax is assessed at 10% of rental value (actual, or imputed at 6% of market value of the land) and building tax at 17% of the rental of buildings. (There is an additional 3% tax for education and 4% for sewerage for the first twenty years after connections are made.) Assuming an average tax rate of 14% on land and buildings together would imply a total property value of JD 143 million. Revenues from the 10% tax on the value of land transactions came to JD 14.4 million in 1979 implying that land sold in that year was worth JD 144 million (probably more, if prices were understated). Another comparison is to note that if the above total national land and building taxes were collected from only the 60 km2 built up area in the Amman region, this would imply a property value of only JD 2.4/m2. The price of unserviced land on the margins of the Amman conurbation was around JD 5/m2 in 1979. If account is taken of the much higher values of built lands, and of the value of buildings upon them, it is likely that updating assessments and improving collection of land and building taxes could yield a several-fold increase in tax revenues. The text assumption is that reassessment, without changing tax rates, would quadruple land tax receipts. It is likely that securing such increases would also require efforts to strengthen collection procedures.  - 25 - 3.23 Local governments may secure revenues from a number of activities related directly to governmental responsibilities (e.g. fees for market stalls, various license fees, returns from land development for residential or industrial use). According to recent development plans, the government also intends that local governments should play a role in stimulating income raising and revenue earning activities. While governments have an essential function in establishing the infrastructures to support investments, and in providing an appropriate framework of legislation and regulations, their competence as investors in profit making activities is questionable. 3.24 With the strengthening of local administrations and their revenue base, most local governments, and certainly those in the more rapidly growing areas, would be in a position to increase the proportion of their investments financed with borrowed funds as contrasted with recurrent surpluses. The CVDB will have an important role to play in this process. As this institution develops the staff and policies required to make sound appraisals of projects submitted for finance, it should become more capable of mobilizing non-government funds for local governments. Given exposure limits on CVDB, larger municipalities may need to explore other sources of funds, such as the local bond market and overseas funding agencies, as Amman has already done. D. The Planning Process 3.25 The need for efficient urban development to support growth of the national economy will place an increasing premium on defining spatial and investment strategies within as well as among regions and on securing appropriate balances between locations of jobs and residences, ensuring adequate infrastructures, and ensuring that transport networks fit within, and encourage, efficient patterns of urban development. The regional planning study now under preparation will contain a more extensive analysis of planning machinery and options. At this point, the institutional arrangements for planning at various levels are summarized. 1. Inter-Regional Planning 3.26 As noted in Chapter II, there is currently no institutional machinery for taking systematic and explicit account of inter-regional distributional considerations in national investment programming or economic policy formulation. Remedying this would require that either (a) the authorities responsible for investment programming equip themselves with staff to deal with the regional implications of investments, I/ or (b) more cumbersomely, the establishment of an l/ Public sector investments are determined by the budget which is passed by the National Consultative Council after review by the Development Committee comprising the Ministers of Transport and Finance and the President of the NPC and the Cabinet as a whole. There is no single agency which reviews all projects in terms of standard criteria, and certainly not their conformity with spatial criteria.  - 26 - agency which would deal with these questions and would be closely consulted by NPC and the Ministry of Finance during planning and budget formulation. 2. Regional Planning 3.27 The 1966 Law for Planning Cities, Towns and Buildings provides a comprehensive framework for intra-regional and urban planning.!/ The centrepiece of the law is the building permit, without which the agencies responsible for water, sewerage, telephone and electricity services are not supposed to connect households. Permits are only issued for buildings which meet specified standards and which are located in masterplanned areas. Masterplans are in principle prepared by the local authorities to fit within regional plans prepared by the Cities and Villages Development Department of the MMRAE. 3.28 The MMRAE has not made the regional plans which would provide the framework for masterplans for local areas. Part of the problem has been institutional, given the split of responsibilities between the MMRAE (responsible for incorporated areas) and MOI (in charge of governorates). At least equally important was the fact that planning has been conceived exclusively in physical terms and has been the province of physical planners; as a result, the powers within the law to make use of economic and financial criteria in defining plans or taking planning decisions have not been used. Possibly because of these factors, when it was decided in 1977 to formulate a regional plan for the Amman-Balqa region, a special agency, the Amman Urban Regional Planning Group (AURPG), was set up under the aegis of the NPC. Similar arrangements were made for the Northern Regional Planning Group (NRPG) in 1978 2/ (see Map IBRD 16511 for the boundaries of the regional planning areas). 3.29 Unfortunately, there was no formal connection between these planning groups and normal administrative procedures for physical or investment planning. Even the planning regions with which they were concerned were not coterminous with the governorates. The groups therefore tended to atrophy when the donor support for technical assistance personnel came to an end. In 1979, AURPG and NRPG were transferred to a new Regional Planning Department in the MMRAE. The responsibilities of this Department vis a vis the Cities and Villages Planning Department of MMRAE, and the NPC, remained unclear. Plans have 1/ Annex III contains a summary of the main types of plans and institutions set out in the law. 2/ The AURPG was partly supported by USAID, and the NRPG by the Japan International Cooperation Agency. Their reports were; AURPG, Planned Development in the Balqa-Amman Region 1981-1985, Interim Implementation Report 1979; and Japan International Cooperation Agency, Integrated Regional Development Study of Northern Jordan, Final Report, March 1980.  - 27 - recently been formulated (with German technical assistance) for the southern area by the Southern Region Project (SRP) under the Regional Planning Department of MMRAE. I/ 3.30 All of these planning groups attempted to define development strategies for their regions, and to identify investments to implement those strategies. The NRPG identified only three major projects - tourism, ring roads in Irbid town, and extensions to Irbid industrial estate. The AURPG and SRP presented more comprehensive lists of projects. Without regular channels for integrating these proposals into physical or investment plans of central, regional, or local governments, or the parastatal agencies concerned with infrastructure provision, however, these planning efforts have had limited impact, although there have been follow up studies on some issues for which donor finance was available (i.e. feasibility studies for the Irbid Ring Roads and Industrial Estate, studies on tourism and industrial development at Aqaba). The AURPG also devoted considerable space to discussion of policy issues such as appropriate planning machinery, and the need to review infrastructure and planning standards in the light of resource constraints. 3. Planning in Specific Areas 3.31 Jordan Valley: The Jordan Valley provides an example of effective regional planning in the sense that plans have been implemented. There, the Jordan Valley Authority (JVA) was given responsibilities for planning and implementing a comprehensive set of investments starting from a very low base. This model is not replicable in areas with large existing populations and diverse economies. Moreover, now that the JVA has implemented basic infrastructures in the Valley, these are being gradually handed over to relevant local government and central government agencies. 3.32 Amman: Given the scale of development now occurring there, regional planning is becoming increasingly urgent in greater Amman. In response to pressures by developers who have acquired relatively cheap land in outlying areas, areas far in excess of likely demands have been masterplanned. _/ Some of the most important developers are public agencies which, lacking a sound regional strategy, have no real basis for 1/ Draft Regional Development Plan for the Southern Region, MMRAE and German Agency for Technical Cooperation (GTZ) Interim Report, May 1981. 2/ AURPG estimated in 1979 that 455 km2 had been masterplanned (and hence were potentially available for building) as compared with only 60 km2 built up area in the Amman region. They estimated a growth in demand for built up area of 52 to 64 km2 by the year 2000, implying no need for any further masterplanning in the region.  - 28 - taking an informed account of the impact of their decisions on the urban fabric. Examples include the industrial estate at Sahab developed by JIEC, the Abu Nuseir New Town and Marj El Hammam teacher's housing scheme development by NHC, and other cooperative and company housing schemes. The result is leapfrogging development, a patchwork of masterplanned areas, excessive infrastructure cost, reductions in population density, 1/ and a lower than necessary quality of life due to inconvenient access to services. 3.33 The potential waste involved might still be avoided in part if building permits were issued, and infrastructure networks were expanded, only in accord with well-defined strategies for regional development, analysis of economic costs and benefits, and full cost recovery from beneficiaries. This is not the case. Building permits are issued on the basis of conformity of proposals to physical criteria. Developers get approvals for subdivisions if they show that plots will have access to masterplanned roads, but they are not responsible for installing roads or other infrastructures within the subdivisions. Infrastructure agencies plan expansion of their networks according to their own forecasts of demand and their own criteria, as well as demands by prospective clients, without explicit reference to any overall pattern or to plans of agencies providing complementary services. The JIEC is particularly anomalous, as its charter restricts it to developing industrial estates outside the boundaries of municipalities (and so outside the normal planning approval process). In the words of an official of one infrastructure agency, I'llanning follows development" rather than vice versa. 3.34 Price incentives for more orderly development patterns are also underutilized. With the partial exception of Amman Municipality, betterment taxes allowed under the 1966 law to recover costs of public services are not levied. Water and sewerage are heavily subsidized, as are connections to new developments. Land taxes are left at low levels, so reducing the incentive to develop land, including land near infrastructures. In these circumstances, it is not surprising that the AIRPG estimated that 54% of serviced land in greater Amman in 1979 was undeveloped. 3.35 The most rapid growth in the region has been occurring outside Amman Municipality. There would be benefits from developing and enforcing strategies for supply of water, sewerage, transport and location of job opportunities relative to residential areas at a regional level. The uncertainties regarding future growth imply the desirability lj' Densities in the built up areas of Amman Municipality alone declined from around 199 persons/hectare in 1972 to 145 in 1979. The basis for this estimate is the AURPG (Chapter III-3-8) which showed the built up area and population in these two years at 21 km2 and 43 km2 and 550,000 and 823,000 respectively. The density estimates of 199 and 145 reduce both figures to reflect the 1979 Census total of 624,000.  - 29 - of a focus encouraging infill and on developing new areas in coordinated, incremental fashion, avoiding excess investments for growth which may not occur, yet following schemes which will allow even more rapid growth, should that eventuate. 3.36 Meeting these objectives would require establishment of institutions with appropriate powers and staffing. An effective regional planning body should be empowered to coordinate the preparation of investment plans for its area of concern, to review specific investment plans and possibly review specific budget proposals as well as to carry out strategic physical and investment plans. Such a planning body should also be capable of dealing with policy questions (e.g. on pricing of services, role of public transport, etc.) and financing issues. It would therefore require a staff with solid qualifications in economics and finance as well as engineering and physical planning. 3.37 Several institutional options could be considered. They include (a) elaboration of the Supreme Planning Council's powers, (b) establishment of a special Cabinet committee to control development in the capital region, (c) extension of Amman Municipality's boundaries to include the major areas of service interdependencies (in water, sewage, transport), (d) establishment of a metropolitan authority with some form of (possibly devolved) representation from the 23 municipalities and 51 villages in greater Amman (as defined by the 1981-85 Development Plan), and (e) establishment of an Amman region planning agency within NPC with responsibility for approving all proposed public investments in the area. Option (d) has been discussed by MMRAE, and has substantial attractions, as a metropolitan government could usefully perform regional service functions (i.e. solid waste disposal, rodent control, traffic engineering, etc.) and monitor performance by municipalities of their functions in addition to its planning tasks. If such a solution were to avoid creating inefficiencies by interposing another level of government, the metropolitan agency might have to be given many of the functions (especially those connected with approvals of investments and budgets) now exercised by the MMRAE vis a vis the municipalities in the region. Ideally, the metropolitan authority would enjoy a status similar to that currently assigned to Amman Municipality. 3.38 In the case of Aqaba, an agreed planning framework is required to coordinate several major transport (port, railway, road) and industrial (fertilizer, timber) investments under study or construction within and outside the town. The need for planning is made even more acute by the scarcity of building land in the area, and by the competition between tourism (based on water sports and coral gardens) and potential pollution from port and industrial activities. Responsibility for planning in Aqaba town, and sale of government land there, rests with the Aqaba Town Planning Authority, a special committee set up under separate legislation with representation from the principal ministries and agencies concerned with Aqaba (the head of the Port is its Chairman). The south coast, which is the site of several major proposed investments, is under the control of another inter-ministerial committee. Given the interdependencies between the two areas, there is a clear case for bringing both under one planning body.  - 30 - 3.39 If it is decided to make Irbid a major development centre, conlsideration should be given to extending the municipal boundaries, a step which should probably be considered in any event as most land within the town is developed. Development of appropriate plans for the town and its surroundings would be an early stage of any major effort to give Irbid growth pole status. (The plan prepared by the NRPG for Irbid is based on inadequate data, and recommends overly ambitious investments (e,,g. three ring roads for a reasonably densely populated town of only 120,000 people).) 4. Local Planning 3.40 If regional planning has so far failed to channel investments within regions, so has local masterplanning within municipalities. Masterplans have been made with minimal attention to economic questions such as apppriate physical standards (as regards sizes of roads, ratios of land for different uses, plot sizes etc.) or efficient timed strategies for developing specific areas. 3.4I1 Shortage of planning staff impaired the effectiveness even of the physical aspects of masterplanning. While municipalities are in principle responsible for drawing up their own plans, their lack of qualified staff has required the MMRAE to undertake this task for most of them. The MMRAE has seen the professional planning staff of its Cities and Villages Planning Department decline from 20 five years ago to 4 at the time of the mission, apparently due to declining attractiveness of salaries offered. The MMRAE is attempting to make good this shortfall by contracting out masterplanning exercises to consultants. 3.42 Plan enforcement is also a problem. The penalties for plan infractions are low (JD 20 for building without a permit), and while buildings may be destroyed if they are built on land planned for other use, a common response to cases where construction takes place in cotntravention of plans (e.g. building on a right of way or on land zoned for public use), at least in smaller centres, is to change the plan rather than the building. 5. The Basic Issue 3. 43 Lax enforcement is better than rigorous enforcement of poor plans. The fundamental question is whether strengthening planning (in terms of quality as well as of powers) at the local, regional, and national levels is likely to yield benefits commensurate with the costs involved. The nature of the benefits has been discussed above. The costs would include, importantly, the difficulties associated with making institutional changes. It is to be hoped the Royal Commission on public administration will devote some attention to the planning problem. The two priorities are (a) incorporation of more explicit concern with spatial and regional considerations in investment programming at the NPC, and (b) development of institutions better able to plan and coordinate development in the greater Amman area.  -31- E. Summary 3.44 The importance of developing efficient urban areas, and the increasing complexity of planning and managing them, make necessary a serious review of existing institutions responsible for these functions. More specifically: (i) as regards urban management, it is recommended that the Royal Commission on administrative reform should, inter alia, devote attention to the role of local governments via a vis central government ministries and autonomous agencies; (ii) based on this review, it will be possible to ascertain more clearly the requirements in personnel and finances of local governments; the case of Amman deserves priority in the light of the greater complexity and national importance of Amman's problems; (iii) there is scope to increase resources available to local governments, especially through increases in land and building tax, betterment levies, and cost recovery from beneficiaries of infrastructural investments. - In addition to raising revenues, such increases would provide stronger incentives for private investors to fit their projects within more rational development patterns; and (iv) planning deserves more serious attention in developing efficient urban areas in the face of increasing financial pressures. Special attention should be paid to: (a) creating and strengthening planning institutions through attracting and retaining high caliber staff, and ensuring a strong positive link between plans and actions; (b) in the case of greater Amman, where the need for stronger regional planning is most acute, there are several institutional. choices, among which creating a metropolitan government may offer the largest potential gains (as well as the most complicated institutional change); (c) incorporation of spatial considerations into evaluation of specific investment proposals by the body responsible for investment programming (NPC); (d) formulating regional plans which go beyond physical masterplans to include recommendations on appropriate standard of services and timed investment programs; and (e) making local masterplanning, subdivision, and building permit approvals contingent on their conformity to development strategies, in addition to simple physical masterplans.  - 32 - IV. INFRASTRUCTURE SERVICES A. Introduction 4.01 The provision of most basic infrastructural and social services has expanded rapidly under the impetus of government concern to meet basic needs of the population, a growing economy, and substantial external support. Annex I, Table 4.1 summarizes indicators of service provision for which comparable data are available from the 1961 and 1979 censuses. The following discussion reviews issues and prospects for each of eight subsectors providing urban services. B. Water and Sewerage 1. Institutions 4.02 The Natural Resources Authority (NRA) was the first national agency responsible -for water. It is concerned mainly with monitoring water quality, water resources services and planning and licensing wells. Municipalities were responsible for supply and distribution of water to their inhabitants. In 1973, three additional agencies were established: the Jordan Valley Authority (JVA), which was responsible for water in the Jordan Valley (and water transfer from the Valley, including the pipeline from the East Ghor Main Canal to Amman), the Amman Water and Sewerage Authority (AWSA), which is responsible for water distribution and sewerage in Amman, and the Water Supply Corporation (WSC), which was responsible for bulk supplies and for supervising and advising local water supply councils. WSC is now responsible for all municipal water supply and sewerage systems outside Amman and the Jordan Valley and is gradually taking over remaining independently operated municipal systems. As water demand has grown to the point at which it impinges seriously on supply, and as inter-basin water transfer becomes more necessary, there is an increasing need for coordination among the three major water agencies. The government is considering the establishment of a National Water Authority to formulate national water policy and to provide necessary coordination in the sector. 2. Service Provision and Basic Issues 4.03 The most critical water and sewerage problems concern shortages in total supply, uncertainties about future exploitation and use of sources, apparent losses in distribution and pollution of supplies. Economic pricing of water and manpower planning for the sector are also important issues. The Bank's water supply sector study (report under preparation) will elaborate upon these questions and discuss an investment program for the sector and proposals for institutional development.  - 33 - 4.04 Between 1961 and 1979 the percentage of urban households supplied with piped water rose from 49% to 87% with most of the improvements occurring in the 19709. As of 1979, only 16% of households (26% in the urban areas) were connected to one of the three existing public sewerage systems (in Amman, Salt and Aqaba), while 79% (73% of urban households) depended on cesspits. Surface sewerage effluent from cesspits in areas where the absorption capacity of the soil has been exceeded, and where households cannot afford frequent pumping, constitutes a serious health threat. Sewerage is also contaminating water supplies in some areas. Ongoing projects are now dealing with these problems through extension of sewer networks and expansion of treatment facilities. They include upgrading of squatter slums under the First Urban Development Project (UDP-I), the third Amman Water and Sewerage Authority (AWSA) project, and the Zarqa/Ruseifa Water Supply and Sewerage Project by the World Bank; water projects in Irbid and Aqaba supported by USAID, the UK government, and the Arab Fund for Economic and Social Development; and the United Nations Relief and Works Administration (UNRWA) program for upgrading official refugee camps. Additional sewerage projects for Amman and for four southern and five northern cities are under consideration by the Bank. The costs of conventional projects are high. Efforts to ensure they fit within carefully they formulated regional and urban plans would go some way towards ensuring maximum coverage for the resources expended. 3. Water Pricing 4.05 Although rural water supplies are subsidized, water is charged for in urban areas at sharply progressive block rates, with the highest rates approximating average incremental cost. This gives an incentive to consumers to economize on water use. There is currently a sewerage charge of JD 0.03/m3 of water in Amman. This does not reflect costs of operation and maintenance of sewerage disposal facilities. Should it be decided to seek cost recovery through taxation measures, this needs to be examined in the context of other claims on local taxes. Connection charges have a role to play in improving development patterns. The consumer pays the full cost of water connections in WSC areas, using either his own or contract labor under WSC supervision, or paying the WSC actual cost. AWSA, on the other hand, charges a deposit of JD 40 plus a charge for the connection from the main. If the connection is a long one, AWSA contributes one third of the cost where a number of households share the connection, and one half if it is to a single household. This is one of several factors which encourage leapfrogging development. Sewerage connection charges are collected both ditectly (25% of rental value at time of connection) and indirectly (through a 4% assessment on building rental value for the first 20 years 1/). Water and sewerage tariffs will be reviewed by a study under the Zarqa/Ruseifa Water Supply and Sewerage project. 1/ Revenues from this source are negligible relative to costs due to underassessed rental values (see also para. 3.21).  - 34 - C. Solid Waste 1. Current Practices 4.06 Street cleansing and solid waste collection are the main services, in terms of recurrent budget expenditures, now provided by local authorities. At least in Amman, Irbid, Zarqa and Aqaba, collection appears to be effectively carried out, albeit by differing methods. The general impression, even in smaller towns and villages, is one qf an acceptable standard of cleanliness in the streets. Consultants 1 who studied solid waste management in greater Amman (defined for that study as the area within a 30 km radius of the centre of Amman), made two basic technical recommendations: (a) a shift to more labor saving and capital intensive collection practices (involving kerbside rather than household collection) and (b) creation of major new disposal sites at some distance from the city and establishment of transfer stations at which refuse would be transferred from collection vehicles to large trucks for transport to the disposal sites. The desirability of the collection recommendations is questionable in the light of the implicit reduction in services offered to households and also the likely size of manpower cost savings (most menial tasks are performed by migrant workers at low wages) compared with the costs of additional equipment. 4.07 The main problem is undoubtedly that of disposal. Dumps are badly sited and poorly controlled, and consequently constitute public nCuisances and hazards to public health through rodent infestation and potential pollution of water sources (although pollution of water sources needs to be handled in the larger context of cleaning up overflows from cesspits). The identification of suitable disposal sites involves not only technical considerations, but also good public relations as most Iesidents do not welcome garbage dumps as neighbors. The preparation of codes of practice of tipping or dumping procedures, and the design and implementation of enforcement procedures, is also an urgent need. Recycling of solid waste does not seem to offer any savings over landfill ast this time. 2. Organization of Solid Waste Management 4.08 The above cited study suggested that collection and disposal of stolid waste in the Amman region might best be placed in the hands of at special department of Amman Municipality which would be financed by general taxes. This recommendation deserves careful review. General siolid waste collection services are best performed by local organizations, whether private or municipal. Having households pay for I/ Hashemite Kingdom of Jordan, Municipality of Amman, Solid Waste Management and Disposal System for the Greater Amman Region Feasibility Study (Watson Hawksley - ERC in association with Middle East Engineering Services) Final Report, January 1980.  - 35 - collection (as they do at present, although they do not pay the full costs of collection) may also lead to more pressure by the public to secure efficient service than would otherwise occur. Increasing the degree of cost recovery through user charges would also give more incentive to identify efficient collection methods. Regional solutions may be more appropriate for disposal since in most areas dumpsites would serve several municipalities. Whether some form of regional authority is established, or whether one municipality undertakes dump operation in return for user fees from other municipalities, needs to be determined. AI D. Transport 1. Overview 4.09 A National Transportation Study is being carried out by consultants to review overall transport needs (excluding Amman, see 4.13 below) and to set priorities for investments and future institutional arrangements. Governmental responsibility for transportation outside the urban areas is currently divided between two ministries, the Ministry of Public Works (MPW) for highways, and the Minister of Transport (MOT) for the corporations in charge of ports, railways and airports, and for other transport corporations (Public Transport Corporation (PTC), Syria-Jordan and Iraq-Jordan Transport Companies). The Royal Jordanian Airline (ALIA) maintains a high degree of independence. There is one port, Aqaba, and one narrow gauge goods railway running from the northern border with Syria near Mafraq to Amman and from Al Hasa to Aqaba. With the exception of phosphates, virtually all goods traffic is moved by road. Good highway communications are important both from the national and the international point of view, the latter particularly since the reopening of the Suez Canal and the upsurge in economic activity in the Middle East generally. Passengers are carried by private motor vehicles or privately owned buses, mini buses, and service taxis licensed by the Central Traffic Committee chaired by the Minister of Interior (MOI). The MPW has a program involving substantial improvements to the main roads connecting the major urban.centres, as well to Iraq and to Saudi Arabia. 4.10 Construction and maintenance of roads within villages and municipalities are the official responsibility of local governments, although the MPW takes responsibility for major highways passing through them. For the most part, towns are small and traffic light, with most problems being subject to amelioration by appropriate minor works at intersections and one way systems (where streets are narrow). 1/ The ATMDP includes a solid waste component under which the Amman Municipality will (a) review efficiency of its existing collection practices, (b) establish and manage four dump sites in the region and (c) establish a mechanism for recovery of costs of collection and disposal from households and other municipalities using the dump sites.  - 36 - 2. Amman Region Transportation 4.11 Amman transportation depends exclusively on roads. The badly deteriorated condition of roads in the municipality was substantially upgraded as a result of JD 4 million in contracts for road resurfacing since 1979. Maintaining investments in road plant will require substantial improvements in road engineering and maintenance practices, including development of an inventory of road conditions, establishment of cost effective treatments, formulation of systematic maintenance programs, and stronger quality control over force account and contract works. These improvements will in turn require strengthening of staff and municipal budgets devoted to maintenance functions. 4.12 Serious problems arise from the basic topography of the area. Roads tend to radiate from the city centre along valley floors or ridges with few transverse links due to steepness of slopes (15% of roads have gradients of 5% or more). As a result, large amounts of through traffic need to pass through a few critical intersections and the city centre with attendant congestion. 4.13 The private automobile is the primary mode of transport (44% of motorized trips in 1979). Public transport, with 49% of trips, is split between service (shared) taxis (26% of the total), regular taxis (11%), and scheduled private and public sector buses (12%). The remaining 7% are carried in school and company buses. A transport study commissioned by the government i/ indicated that Amman's transport system provided a reasonable level of service to residents, more so to those with an automobile available (there was one car per three households in 1979). Problems requiring attention include lack of access and inadequate parking in the downtown area, safety (fatality/registered vehicle ratios ten times those in Europe and higher than in neighboring countries with especially high child mortality due to accidents), irregular service by public transport, and dispersed responsibilities for transport planning and management. The study did not deal with pedestian traffic. It is clear, however, that provision for pedestrians takes second place to movement of vehicles in most parts of Amman. 4.14 The study forecast an 85% increase in travel by 1990, and made recommendations for meeting future demands through a mix of traffic engineering, restructuring and strengthening public transport, and highway investments (to cost JD 42 million in 1980 prices, of which JD 32 million would be inside the Amman Municipality). The study's major recommendations were accepted. The 1981-85 Development Plan includes JD 17 million for road work and interchanges in Amman Municipality, including JD 7 million on works which had already commenced before the plan period. Approximately JD 20 million will be spent on roads and interchanges within the Amman-Balqa region (excluding local segments of major inter-regional roads and agricultural roads). l/ Halcrow Fox and Associates, Jouzy and Partners, Amman Region Transportation Study (several volumes, Draft Phase II Final Report, February 1981).  - 37 - 3. The Four Basic Issues 4.15 Four major transport issues need to be addressed. First, policies need to consider the transport system as a whole and there should be appropriate machinery to formulate such policies. This would be in contrast to the existing situation in which projects and programs emerge piecemeal for parts of the system from several agencies, including the MPW, MOI, MMRA, MOT, and also Amman Municipality and the PTC (Annex I, Table 4.2 summarizes the agencies concerned with transport planning and management in Amman). The interagency transport study steering committee provided a precedent for coordinated consideration of transport issues which the government intends to keep in being. Effective follow up will require engagement of appropriately qualified personnel in one or more of the concerned agencies. (The recruitment of transport planners by Amman Municipality under ATMDP is expected to go some way towards meeting this need.) 4.16 Second, given the critical interactions between transport and regional development patterns, transport planning should be carried out in the light of more general regional planning considerations, and vice versa. The absence of such a framework for the Amman Transport Study, which required the consultants to formulate their own implicit regional plan, constitutes one of the main weaknesses of the study. 4.17 Third, to avoid waste and inefficient urban patterns, economic criteria should be systematically applied to evaluating proposed road investments. Attempts to meet future travel growth largely through continued expansion of the highway network, without significant increases in persons per vehicle, are likely to be uneconomic (especially because of high highway construction costs due to the difficult nature of the terrain). The transport study indicated that the rate of return on many of the road segments and interchanges it recommended were modest. On the other hand, substantial investments are justified to improve capacity of some critical modes in the network with heavy congestion. Although the study's recommendations assumed some switch from smaller to larger public transport vehicles (i.e. from taxis to buses), measures to increase the attractiveness of public transport relative to private automobiles need to be actively explored (e.g. corridors with bus/taxi priority, cordon pricing). While traffic management measures have been employed with considerable success in Amman, there is plentiful scope for their extension and refinement to improve traffic flows and postpone some road network expansion. 4.18 Fourth, more explicit review is needed of several public transport policies (on tariff levels, licensing of different modes, subsidies, and the role of the public versus the private sector). The issue of government-owned versus privately-owned public transport deserves attention. The PTC was established in 1975 partly in an effort to draw passengers from service taxis which, it was felt, were causing congestion in parts of Amman. Although the PTC receives substantial financial assistance from government (low interest loans for purchase of  - 38 - equipment, permission -- denied to service taxis -- to use untaxed diesel fuel) it has a potential for becoming financially viable. It should be set in that direction before it becomes too large and dependent on government handouts. Yet, the PTC fleet has already been doubled (from 228 buses in 1979 to 437 in 1982), without any thoroughgoing program for realizing operating improvements, route structures, or financial planning. The 1981-85 Development Plan provides JD 13.39 million for PTC investments, including depots and additional buses to enable the Corporation to expand its inter-urban services on a countrywide basis. Given the high level of entrepreneurship in Jordan, the relatively small scale at which public transport services can be run efficiently, and the tneed to avoid unnecessary drains on the government budget, opportunities for encouraging the expansion and upgrading of private in-city and interurban services deserve more careful consideration. Thus, service taxis serve many areas which could be only inefficiently served by buses, and they have the advantage of operating without subsidy. Many of their inconvenient features could be alleviated through appropriate measures (e.g. establishing parking areas, requiring minimum service frequencies, vehicle inspection, and allowing private minibuses on higher volume routes). E. Electricity 4.19 Electricity was received by around 98% of urban households in ]979 compared with 39% in 1961. The important issue now is to increase supplies to rural households. Peak demands on the electricity supply system have doubled in the past five years and the responsible supply authority, the Jordan Electricity Authority (JEA) has, with Bank assistance, responded with a program designed to increase power supply and distribution throughout inhabited parts of the country. New generating plant has been installed bringing overall capacity to over 300 MW, and peak demands are easily met. The transmission system has been improved with high voltage lines and extensions to the medium and low voltage networks with the object of establishing a national grid to ensure flexibility and reliability of supply. The JEA is required by law to maintain earnings at a minimum rate of 9% on revalued assets; it has succeeded in so doing. F. Telecommunications 4.20 Inadequacy of the telecommunications system has been an important past impediment to industrial and commercial development. The old electrico-mechanical exchanges are, however, being replaced by fully automatic electronic telephone exchange systems from Japanese and French sources. The cost to users of an efficient service is not a limiting factor. It is expected that by 1985 the Telecommunication Corporation ITCC) will operate fully automated exchanges throughout the country providing direct digital dialing facilities to its subscribers. By that time also, automatic dialling will be available to most major international centres.  - 39 - G. Education 4.21 A well educated labor force is crucial to Jordan's development. Public education is based on a three level system comprising primary (grades 1-6), preparatory (grades 7-9) and secondary (grades 10-12) schools. Government schools accommodate 80% of students. The balance is provided by UNRWA (about 7%) and private schools (13%). Government's objective is to achieve the education of all children to preparatory level. Recent years have seen great progress to that end with gross enrollments at 97% of the age group for primary and 76% for preparatory classes and no significant disparity by region or sex. Adult illiteracy is still high, at 35% of the population, although special corrective classes have been introduced with some success. 4.22 Secondary education has traditionally followed the British pattern of academic curricula, but efforts are underway to increase its technical content. University education in the past has largely been obtained abroad because of lack of facilities and capacity in the existing University of Jordan in Amman. The new Yarmouk University is placing special emphasis on science, agriculture, engineering and medical education. With a target student population of 20,000 by 1985, it will do much in the medium term to reduce dependence on foreign universities and to provide the technical and health professionals needed for the proper direction of graduates from the polytechnics, the secondary schools with reoriented curricula, and from the apprenticeship and skill upgrading programs of the Vocational Training Corporation. All of these expansions of educational facilities have brought, and will bring to bear, stresses on the teaching force of the country, as well as accentuating shortages of accommodation. Teacher qualification is generally low by the government's own standards, much accommodation is rented and in poor condition. The continuing correction of these deficiencies has meant and will mean that more of the country's budgetary resources will be directed to education, which it is anticipated will preempt over 10% of the total by 1985. External financing has been available from several agencies including USAID and the Bank, which has financed five education projects. H. Health 1. Institutions 4.23 Infant mortality in Jordan was estimated at 141 per 1,000 in 1976 with, however, a large range from Amman (63) to Ma'an (256). Life expectancy at birth, at over 60 years, was similar to that of other countries in the region. Public sector health care is provided by three main agencies. the Ministry of Health (MOH) provides hospitals, manages 67 maternal and child health centres, and runs public health programs (including a child immunization program which started in 1978 and had achieved 75% coverage of its target group by the end of 1981); the Royal Medical Service (RMS), as its name implies, provides care for the military, retired military personnel, and their dependents, living near  - 40 - RMS installations; and the University of Jordan, which includes a teaching hospital capable of providing specialized services. The health services are open to all (subject to availability) and while many pay the whole or part of the fees either directly or through subscription schemes, those unable to pay use the service free subject to assessment by the Ministry of Social Affairs (MSA). The MSA and some municipalities provide local centres with limited health care facilities; 645,000 persons are eligible for UNRWA - provided health services. The private sector includes both profit making and charitably supported health institutions. 2. Issues 4.24 Jordan's overall health service resources and performance are characterized by uneven application in terms of geographical spread and functional disposition. For example, the supply of physicians at one for approximately 2,000 persons is good, but most doctors practice in the cities (although road improvements have increased access to services by most rural residents). There are some 3,750 hospital beds, which means t'here are only about one and three quarter beds for every 1,000 persons which is below standards in neighboring countries. As might be expected, t'he best services are available in Amman. This is reflected by the relatively low infant mortality rate, higher provision of hospital beds and the greater number of doctors per capita in practice there which is roughly double the rate elsewhere in Jordan. Imbalances are, however, decreasing. 4.25 Health status varies substantially by income groups. Preliminary findings of the 1981 health surveys in the low income squatter settlements being upgraded under UDP-I show substantial variation in infant mortality and child health problems (e.g. parasites), depending mainly upon family income, education of the mother, and provision of shelter (including access to water and sewage, standard of house, etc.) It is, however, interesting to note that the average estimated infant mortality rates and life expectancies in these generally disadvantaged areas, at 68 per thousand and 60.5 years respectively, were similar to the above-cited averages estimated for 1976. Perhaps the most striking finding of these surveys is the significantly inferior health status of girls relative to boys. Improved health status will depend as much upon securing changes in attitudes and habits as provision of more services. 4.26 Although the health chapter in the 1981-85 Development Plan recognizes the "large disparity in the distribution of medical services in the cities, rural and nomadic areas" the thrust of proposed expenditure is towards increasing hospital facilities in the cities, c'hiefly in Amman, Irbid and Zarqa. Despite a program to improve, increase and rationalize the disposition of health centres in the rural areas, this may further distort the balance between city and rural services. Lastly, there seems greater concern for curative medicine and relatively little for preventive medicine.  - 41 - I. Social Welfare 4.27 Although Jordan has enjoyed a period of unprecedented prosperity for the last several years, there is concern in the government that some groups are being left behind. The Ministry of Social Affairs (MSA) was established in 1979 to define a social program. There is a range of government and private organizations which provide social services, and assist severely needy families. In 1978, the Queen Alia Fund counted 220 voluntary organizations, many with charitable functions. As of 1980, UNRWA distributed monthly rations to approximately 300,000 refugees, and to approximately 150,000 displaced persons on behalf of the government. The MSA makes payments of JD 4 to JD 20 per month to hardship families, of which there were around 6,000 in 1980 (1,500 in Amman). The size of the severely disadvantaged population, and the effectiveness of programs to deal with it, are known only imperfectly. One side-effect of UDP-I has been to generate data on the economic and health status of residents of low income squatter slums. It is important that these data be exploited to define more clearly the characteristics of the most disadvantaged groups to provide a firm basis for developing programs to assist them. Information from the 1980 household expenditure survey should also be exploited from this point of view. Based on this experience, it would be worth designing more general and continuous data systems to monitor welfare status of the population. Another interesting side-effect of UDP-I is that it is providing an institutional framework within which private agencies can develop and implement specific programs in the squatter areas. J. Summary 4.28 The main conclusions which emerge from this review of eight urban service subsectors are that; (i) the amount and quality of infrastructural and social services delivered in the urban areas have improved very significantly in recent years; (ii) with the growth in urban areas, rationalization and coordination of plans for major services such as water and sewerage, transport, and solid waste are becoming more important; (iii) special efforts are required to improve urban transportation in greater Amman. These efforts should include, especially, establishment of transport planning and policy institutions which treat the transport system as a whole in the context of regional strategies, can evaluate the economic returns from transport investments, and explore measures to ensure that the private sector plays its optimal role in meeting transport objectives; and (iv) problems still remain in identifying, and in providing for the needs of, the disadvantaged.  - 42 - V. SHELTER A. Introduction 5.01 This chapter describes the housing delivery system, analyses housing conditions and overall housing sector performance, and reviews 1981-85 Development Plan proposals and shelter sector strategies, in,cluding Bank involvement. At the outset, it is worth noting that in spite of shelter's importance for the welfare of Jordanians, /reliable comprehensive data on the shelter subsector are unavailable.! Annex II contains more details on (a) formal sector institutions in housing and (b) costs and affordability of different types of houses. B. Housing Conditions 1. Delivery Systems and Tenure 5.02 Most housing in Jordan is privately owned and consists of one to th,ree storey detached buildings, often with provision for vertical extension in the lower and middle income urban areas. Construction is cairried out by small contractors in the main. Flats are normally bought before construction commences, with relatively little "on spec." construction by developers (the exception is construction of high income rental housing). Buildings are typically constructed to a high standard, and include stone facing which adds 30% to construction costs as well as presenting significant seismic risks. 1/ Most information in this report is drawn from Jordan Department of Statistics, Modified Preliminary Estimates of the Housing and Population Census on November 10, 1979 in the Governorates of the East Bank (hereafter referred to as Preliminary 1979 Census Estimates), Main Findings of Advance Tabulation: Housing and Population Census 1979 (hereafter referred to as 1979 Census Sample Analysis), Halcrow Fox and Associates and Jouzy and Partners, Jordan Urban Project, ISR-2 Review of Current Situation (April 1979), Interim Report (May 1979), Interim Report 2 (July 1979), and Land Use Planning Data, Technical Memorandum Number 9, Amman Region Transportation Study (July 1980), Amman Urban Region Planning Group, Planned Development in Balga-Amman Region 1981-1985, Interim Report (September 1979), (hereafter AURPG Report), Ministry of Municipal and Rural Affairs (MMRAE), Southern Region Project Team, Progress Report Parts II and III (May 1981), and reports of the National Housing Corporation and Housing Bank. The data situation should improve considerably with the complete analysis of the 1979 Housing and Population Census, the analysis of the 1980 Household Expenditure Surveys, and the completion of the housing policy study which is to be undertaken under UDP-I.  - 43 - 5.03 Around 11% of the urban population lives in official refugee camps under the control of the United Nations 7elief and Works Administration for Palestinian Refugees (UNRWA) 1/. Camp housing consists mainly of prefabricated buildings, many of which have been improved by their occupants over time. 5.04 Housing only 7% of the urban population, high density low income squatter settlements are less widespread in Jordan than in many other developing countries. There are perhaps 85,000 persons in such areas in greater Amman, most of them overflows from official UNRWA refugee camps onto adjacent private or government land. Another 15,000 people live in the Shellalah settlement in Aqaba (on government-owned land). In the latter case, many squatters are residents of old Aqaba whose houses were demolished in the course of urban renewal, and who have preferred squatting near the business centre to occupying the alternative sites provided in more remote planned estates. Many of them earn a major part of their incomes by renting space to temporary immigrant laborers. Squatter housing is constructed by the residents themselves, and varies from temporary materials (East Wahdat) or very inferior construction (Shellalah) where landowners have exercised their demolition rights, to substantial permanent structures (sometimes including multistorey apartment blocks) where de facto tenure is more secure. 5.05 Lower density squatting has started recently and is spreading rapidly on government-owned land near Amman east of Marka and west of Ruseifa. Unlike previous squatter settlements, which have been allowed to persist for lack of alternative arrangements for very disadvantaged people, the new settlements appear to reflect insufficient government action to control its valuable land assets, as well as a lack of serviced land affordable to low and middle income people. A serious disadvantage of the new settlements is that they are being settled at low density in areas which would be extremely expensive to service so that an upgrading program would be unlikely to recover its costs. The mission was informed that a decision had been taken to sell squatted government land in the Yajouz road area to squatters at two thirds of its value. This policy is the opposite of what is required in the pursuit of rational land use. 1/ Based on data from UNRWA and the Preliminary 1979 Census Estimates, official UNRWA camps accounted for 167,463 people, or 11% of the urban population (126,400 in greater Amman). The estimates were arrived at as follows. According to UNRWA Briefing Notes dated 31-12-1980, the population of official refugee camps on September 30, 1980 was 228,928. Those camps which were separately reported in the Preliminary 1979 Census Estimate had a population of 99,281 on November 10, 1979 and 135,720 according to UNRWA on 30 September 1980. Multiplying the ratio of the Census to UNRWA figures by the total UNRWA figure yields the estimate for all camp residents ((99,281/135,720)228,928 = 167,463).  -44 - 5,.06 Most formal sector finance for mortgages and housing construction is provided by the government controlled Housing Bank (HB). Established in 1974, the HB has, though aggressive competition with private banks for deposits, become the largest bank in Jordan measured by number of branches, second in terms of size of its deposits, and has the largest number of loans outstanding of any specialized cred,t institution. HB has followed conservative lending criteria 1 , resulting in an extremely low rate of loan losses or arrears (e.g. only JI) 5,400 in arrears out of JD 23,856,900 accruing in 1980). HB is involved in financing between one fifth and one third of new housing units constructed each year, mostly for families in the upper half of the income distribution. As a corporation with several privileges (tax advantages, government guarantees), the HB has had obligations which extend beyond maximizing profits. It has shown itself willing to rise to these challenges. In addition to mobilizing individuals' financial savings more effectively than any other institution, it has played an important role in developing the housing financial market and encouraging private sector competition. It has also been willing to experiement with ways of reaching lower income target groups, and is now providing support for the upgrading and sites and services for the lowest income groups being developed under the UDP-I (see paras. 5.35 ff. below). Although tthe HB faces the normal risk of an institution which borrows short and lends long, it expects to avoid serious losses in the event of a rise in interest rates through a combination of (a) using profits on a rapidly growing equity portfolio to cross-subsidize interest rates, (b) increasing its share of lending to more lucrative borrowers, (c) borrowing from the Central Bank (should deposits fall), and, as a last re!sort not yet encountered, (d) raising rates on existing loans (all loan contracts provide that HB may raise the rates it charges). 2/ 5.07 Government, through the National Housing Corporation (NHC), constructs some housing (around 1,500 units per year currently) for outright sale (to members of cooperatives, for example), or to companies for sale to their employees on a tenant purchase basis. NHC housing is highly subsidised and although the Corporation is required to deal with tlte "limited income" group, this category appears to include families up to the 80th percentile. Most NHC housing goes to public sector employees, and is mostly in apartment blocks of two to four storeys, with individual flats of 60 m2 or more. It is constructed by larger contracting firms. 1/ Especially for individual loans at the lowest lending rate of 8.5% for up to 15 years maturity. For this type of loan, the RB will lend up to 75% of the cost (maximum of JD 7,000) to borrowers who already own the land (which often is worth one half the total cost of housing), have a building permit, and who either have a regular income large enough to handle repayment (usually by employer deduction) or can find a guarantor who has such an income. 2/ Annex II contains further information on the HB as well as other formal sector housing institutions.  - 45 - 5.08 Housing cooperatives are formal sector institutions whose influence on total housing market is less than their influence on development patterns. Paying the prescribed JD 255 membership fee, members pool their resources to buy land, mostly in outlying areas where land prices are low, and depend on the cooperative to take care of having the area masterplanned, getting infrastructure connections installed, and often securing assistance from NHC in financing and construction. The cooperatives are a major mechanism for overcoming market incentives in favor of denser, less spread out, development patterns, and for giving their members access to government subsidies. Since members of cooperatives are often influential (engineers, doctors, judges, university professors, etc.), controlling their activities through stricter application of planning laws is likely to be difficult unless it is supplemented by reductions in subsidies in provision of infrastructure and housing finance. 5.09 The 1979 Census Sample Analysis indicated that 54% of the urban population reside in housing owned by the head of household (versus 89% in the rural areas), and 48% of urban households own their accommodation (Annex I, Table 5.11). Ownership has risen over time; the percentage of households in owner occupied housing in 1961 (including the West Bank) was 37% (Annex I, Table 4.1). Households which rent are on average smaller than households which own, and analysis of the census data should indicate whether there is a pattern of new families renting, and buying later as their family sizes increase. The census analysis should also clarify whether the majority of renters are in owner occupied buildings with two or three housing units (as suggested by casual observation) or whether they live in larger apartment blocks. 2. Physical Conditions 5.10 There are no clearly established links between housing conditions (as contrasted with provision of services such as water, sewerage, etc.) and health or productivity or other indicators of welfare. Nevertheless, government interventions in the housing field are often predicated on the perceived need to improve conditions. Good information on housing conditions is not available. Census data on physical conditions of the housing stock have not yet been analyzed. Overcrowding in terms of households per occupied housing unit, at 1.023, does not seem to be a major problem nor does it seem to be associated with general rates of urbanization or urban growth (Annex I, Table 5.3). 5.11 Bearing in mind that the average family size is 6.7, that half the houses are under 50 m2 1/ and that 80% of low-income persons occupy houses with only one or two rooms 2/, overcrowding in terms of space 1/ Department of Statistics, The Multi-purpose Household Survey 1976, (cited by AURPG Report, II1-6, p. 40), found that 16.5% of houses were under 25 m4, 34% between 25 and 50, 19.2% between 51 and 75 m2, 14.2% between 76 and 100 m2, and 15.6% over 100 m2. 2/ 1972 Survey for UNESCO cited by AURPG Report and Halcrow Fox and Associates ISR-2.  - 46 - per person may be a problem. Overcrowding is greater in the refugee camps and squatter settlements, where household sizes are larger than average (Annex I, Table 1.7). The national average number of persons per rooxm was approximately 2.6 in 1979 (Annex 1, Table 5.6), compared with 2.5 in 1972. It was 3.2 to 4.2 persons in the low income squatter areas covered by UDP-I. (By way of comparison, in the United States, more than one person per room is taken to represent overcrowding. The number of persons per room in Egypt in 1976 was around 2, in Morocco in 1971 was 2.5, and in Tunisia in 1980 was 2.4.) 5.12 According to the 1979 Census Sample Analysis, 84% of the total population (82% of the urban population) share housing at the rate of two or more people per room and 41%, or 888,000 people (412 of the urban population or 615,000 people), at the rate of four or more. Considering the high proportion of young people in the population (52% under 15 years of age), levels of crowding of two or three per room may be acceptable; bul: levels of four and more per room are undoubtedly a source of stress. There is some regional variation in the room occupancy figures; urban Balqa has the lowest percentage of population sharing 4 per room (24%); 42% of the population in Amman shared at a rate of 4 or more persons per room. At the other end of the scale, only 18% of the urban population occupies housing with less than 2 persons per room (19% in Amman). C. Housing Sector Performance 1. Growth and Investment 5. 13 The housing sector has been buoyant. The 1976-80 Development Plan called for the construction of 31,000 housing units at a total cost of JD 83 million (JD 2,677 per unit on average), with priority to be givren to government employees and other limited income groups. Annex I, Table 5.1 attempts to reconcile available information on actual performance. Total units accounted for there amount to nearly 30,000. According to HB officials, the maximum annual production was 8,500 units during the period, which would imply an upper limit of 42,500 units. Another indicator of expansion is building permits; between 1974 and 1980, the square meters covered by building permits in Amman and Zarqa for solely residential buildings rose at a (smoothed trend) rate of 20% per annum (Annex I, Table 5.2). If all permits resulted in completed construction two years later, construction for sole residential use in these two cities alone would have amounted to 2.5 million m2 during the plan period. If the average unit area were as much as 100 mi2, this would imply 25,000 newly officially registered units in those two cities alone. If we note that those cities accounted for 40% of the country's population, and that the above statistics do not include unregistered housing, it is possible that over 50,000 units were constructed. 5.]14 Total investment in housing during 1976-80 amounted to JD 250 million (approximately 6.5% of GNP). This implies an average cost per housing unit of JD 5,000 to 8,333. Commitments by the formal sector  - 47 - credit institutions described earlier amounted to around JD 140 million implying that at least JD 110 million was financed from private sources. (This is a minimum, since disbursements of the credit institutions were less than commitments, and since commitments include construction as well as mortgage finance, so involving some double counting.) Officially recorded remittances amounted to JD 868 million during the plan period (the actual total may have been larger). Since housing expenditure is believed to be a major destination of remittances, this figure also suggests that private housing investment may have been somewhat higher than shown above. 2. Housing Shortages and Vacancies 5.15 Of the 378,815 housing units recorded in the 1979 census, 64,565, or 17%, were unoccupied. Around 10% of these were under construction (Annex I, Table 5.3). Vacancies were systematically higher in rural than urban areas, and in Karak and Ma'an than elsewhere, wbere they may reflect outmigration from smaller centres, and possibly construction in those centres of second homes by persons working elsewhere. Even in urban areas, however, vacancies exceeded 10% of completed units. 5.16 The disparity between measured vacancies and felt shortages needs explanation if the shelter "problem" is to be identified and policies defined to deal with it. First, there may have been some systematic bias in the census enumeration (although bias of this magnitude is believed unlikely, given cross checks carried out by the census staff). Second, the landlord and tenant legislation, which gives tenants strong tenure rights and prohibits rent increases without tenant consent, may have dissuaded owners (such as emigrants) from renting out properties which they wish to use themselves later. Additional surveys would be desirable to establish the characteristics of vacant units and their owners. Third, there are surpluses of luxury housing in Amman built in response to the 1975-76 boom when substantial immigration from Lebanon was experienced. Nevertheless, the size of the surplus found by the census, its widespread. distribution in the country, and the fact that Amman had the lowest vacancy rate, suggest that it affects more than luxury housing. Finally, Jordan's housing shortage may not be a true shortage (excess demand at market price, including key money), but a "perceived" shortage (unavailability of units of "adequate" quality at "fair" prices, with notions of adequacy being influenced by rising aspirations, and fairness being judged by past prices, controlled rents on existing apartments, and subsidized prices of public housing). 5.17 Housing costs have risen more rapidly than incomes of salaried employees and perhaps of low-income persons more generally. The AURPG found that land costs rose by 500% (1970-74), construction costs by 170% (1970-76), while civil servants' incomes rose only 50%i/. Housing Corporation construction costs per square meter rose by 250% from 1970 to 1/ AURPG, Interim Report, III-6, page 5.  - 48 - 1978 from JD 15/m2 to JD 53/m2. The wholesale price of construction materials in Amman rose 101% between 1975 and 1981, compared with an increase in prices of principal consumer goods of 52%. While incomes of persons in the upgrading areas of the UDP-I appear to have risen by about 17.5% between 1979 and early 1981, estimated costs (including land) of one of the sites and services components (for which designs were most advanced) rose by 47%. The wholesale price of construction materials rose about 22% during the same period. Deterioration in the amount of housing affordable by limited income groups, in spite of rising real incomes, has undoubtedly generated frustration and perceived shortages. 3. Costs and Affordability 5.18 The crux of the housing problem is cost. Comprehensive data are unavailable on actual costs of different types of housing units and expenditures on housing by different classes of people. In order to understand the problem better the mission has estimated the cost of different types of housing (in mid-1981 prices), broken down between initial cost (land price, on-site infrastructure, and construction), operating costs (utilities, and taxes), and financing charges according to different financial arrangements, and the percentile of the population which could afford each type of house, on the conventional criterion that a maximum of 25% of monthly household income can be devoted to housing exlpenditures including loan repayments, taxes, and utility charges (see Annex I, Table 5.4 and Annex II paras. 26-32). 5.19 The picture that emerges is that unsubsidized housing at conventional standards financed according to HB criteria is affordable only by families in the upper third of the income distribution, which can make downpayments of twice or more their annual incomes. If downpayments of 10% of housing cost were allowed, the lowest cost single family detached housing would be affordable only to the upper 21% of the income diistribution. New formal sector apartments (to buyers or renters) even if financed on favorable terms, are unlikely to be affordable to many families in the lower half of the income distribution. The lowest cost NHC houses (assuming unit cost targets are achieved) would be affordable by families at the 9th percentile with subsidy (35th percentile without subsidy). 5.20 In partial mitigation of the above picture of unaffordable housing are two major factors. First, opportunities to earn high incomes in the Gulf have led to substantial accumulation of assets in Jordan, and many families with modest domestic incomes possess wealth which can be used for housing. Secondly, the 25% ratio of affordable payments assuming fixed annual repayments understates the true affordability of housing in a situation in which incomes are rising. Nevertheless, the widespread perception of housing shortage and the high rate of crowding reflect a real problem, especially for lower income people.  - 49 - D. 1981-85 Development Plan Proposals and Shelter Sector Strategies 1. Overview 5.21 The 1981-85 Development Plan projects completion of 86,041 housing units at a total cost of around JD 300 million in current prices (see text Table 5.1). At around 17,000 units per year, this target appears reasonable. On the assumption that households rise by 11,000 to 14,000 annually, and depending upon the rate of reduction in vacancy rates, the rate of demolitions and their replacement, and the rapidity and extent to which overcrowding is reduced, housing "need" amounts to between 12,000 and 27,000 per year (Annex 1, Table 5.7). Actual performance will, of course, depend upon effective demand and supply and policies. 5.22 The plan's cost and financing estimates appear less realistic. Planned housing investment, at around JD 300 million (or just over 4X of GNP), is too low. The plan suggests that official housing will cost JD 5,500 per unit, and other housing JD 2,800, or substantially less than in the previous plan period. When account is taken of Housing Bank forecasts of its lending (on the basis- of its likely resources), the plan document implies an unrealistically low private sector investment (see note c to text Table 5.1). 5.23 The plan stresses expansion of housing for lower and middle income groups, in line with its general distributional objectives. This objective may be particularly important, if, as seems likely, the relative position of low income groups worsens in the medium term (see para. 1.12 above). 5.24 The plan's proposals to stimulate housing supply include measures to reduce costs, to induce more private sector activity, to increase the role of the public sector, and to implement further urban development projects. These are discussed in turn. 2. Measures to Reduce Costs 5.25 In the case of land costs, the objectives are both to reduce land prices, and to reduce the amount of land per housing unit. The plan proposes reassessment of the land and building tax base (last revalued in 1966); a specific tax on undeveloped serviced land; taxation of capital gains from land sales (which might be of questionable value due to widespread evasion and/or have the perverse effect of discouraging rather than encouraging land transactions); and revising planning standards to permit denser development patterns. Some building code changes now in draft in Amman would permit smaller lots and narrower roads; but the benefits from these changes would be counterbalanced by increases in minimum frontage/depth ratios of plots to almost unity, whereas 1/2 tends to make more efficient use of land and infrastructure. Other measures which have been proposed seriously include; exercise of existing laws on  - 50 - Table 5.1: PLANNED HOUSING PROGRAM: 1981-85 (dwelling units, current JD) Type of Housing Official Sites and Units Services a/ Others Total A. Number of Units 23,073 5,000 60,000 88,073 (of which new starts) (19,532) (5,000) (60,000) (84,532) B. Finance (JD'000) Housing Corporation 23,502 - - 23,502 External Loans/Aid 28,183 3,543 - 31,726 Budget 16,570 2,000 - 18,570 Ind'l Dev't Bank 430 - - 430 Housing Bank 54,399 4,164 (138,437)b/ (197,000)b/ Private/Mixed - - (28,704)c/ (28,704)c/ Total: (JD'000) 123,084 9,707 167,141 299,932 (of which new starts) (107,445) (9,707) (167,141) (284,293) C. Cost per new unit (JD/Unit) 5,501 1,941 2,786 3,363 Source: Annex I, Table 5.5. Notes: a/ Under UDP-I. Excludes costs of off-site infrastructures and community facilities to be comparable with other types of housing. UDP-I includes JD 3.4 million to upgrade housing for 1,660 households accommodating 11,211 people, but this is excluded from the table. b/ Based on preliminary forecasts by Housing Bank. c/ Calculated as a residual. Housing Bank forecasts include construction loans and loans to final borrowers, so that the value of housing financed is less than the amount of finance. If we reduce HB commitments to "other" housing by half, private finance still rises to less than JD 100 million, or less than estimated private housing investment in the previous plan. betterment levy (which, in addition to capturing for the public part of the increased land value from public investments, would also stimulate landholders to realize cash returns on their investments through development); and establishment of a Land Improvement Fund (a land banking and development corporation, for which the mission understands draft legislation is under consideration).  - 51 - 5.26 Text Table 5.2 lists the above (and other) policy measures and indicates the likely direction of their effects on the objectives of (a) increasing density of land use (though infill of serviced areas, and securing higher densities within developed areas) so as to economize on infrastructures and transport services, as well as to provide more affordable accommodations and (b) reducing land prices. The analysis is necessarily crude, as the effects of measures will depend upon location, implementation details, and upon which other measures are employed. Nevertheless, the table does provide a framework for reviewing possibilities. 5.27 Table 5.2 (Item A.1) indicates that strengthening planning controls along the lines suggested earlier would tend to raise land prices largely by reducing the amount of land available. Hence, meeting affordability as well as planning objectives is likely to require a combination of measures. Table 5.2 suggests that allowing higher residential densities and collecting higher annual taxes on land (preferably based on market price rather than rental value so long as rent controls remain in effect) are the two most attractive single measures from the point of view of density and affordability criteria. Allowing higher densities would increase affordability of housing through reducing the amount of land per housing unit. It might also decrease land prices through reducing the aggregate demand for land relative to supply. Increasing land taxes would have the additional benefits of increasing financial resources of local governments and causing investors to seek more productive investments. To the extent that land prices are 'excessive" (i.e., not justified on the basis of likely future rental values), an increase in taxation could have a particularly dramatic effect on reducing prices. 1/ 5.28 Fears have been expressed that a decision to increase land taxes would reduce emigrant remittances, and the basic balance in the balance of payments (by a smaller amount, since a portion, possibly substantial one, of proceeds of land sales to emigrants is now placed abroad or leaks into imported consumer goods). To the extent that emigrants would still purchase land when they returned to Jordan, higher land taxes might simply cause emigrants to defer their purchases, and the appropriate economic comparison would be between the interest emigrants would earn on 1/ While increases in land taxes will reduce land prices compared with a lower tax situation, it is not self-evident that these price reductions will make land more affordable, since the price decrease would normally be expected to equal the present discounted value of the extra taxes which would have to be paid by the buyer. To the extent that buyers have higher discount rates than sellers, affordability would improve. A more important factor is that tax increases would force landowners to seek cash by liquidating other assets or by earning incomes from development or sale of their property. This would force a careful assessment of the returns from holding land, and, possibly a sharp downward adjustment in its price.  - 52 - Table 5.2: EFFECTS OF VARIOUS POLICIES ON DENSITY OF DEVELOPMENT AND ON LAND PRICES Policy Effect on Density Effect on Prices of Through Encouraging; Planned Land Unplanned Infill More dense Unserviced Serviced (Unserviced) development Undev- Dev- land of developed eloped eloped plots Desired Outcomes + + - - - A. Planning Measures 1. Restrict "planned areas" to amount consistent with estimate of development needs and ensure infra- structure services are provided in rational coordinated fashion. + ? + + + - 2. Refuse building permits in planned areas which are as yet unserviced. + ? - + (+) ? 3. Allow higher residential densities. + + - ) ?- 4. Additional restrictions on sale of unplanned land (e.g. raising minimum size of plot whose sale can be registered)(+) + + + - 5. Require developers to put infrastructure on land. + ? - + + - B. Tax/Subsidy Measures 6. Raise annual land tax rates. + + - - - - 7. Special tax on serviced undeveloped land + ?-) - (-) (-) 8. Give special loans/grants for infill projects. + ? ? + - - 9. Reduce subsidy element in infrastructure connec- tion charges. + + - + + _ 10. Tax capital gains on real estate transactions. ? ? - - - - 11. Levy betterment taxes when infrastructure networks are installed. + + - + + _ C. Other Measures 12. Loosen rent controls + ? + + + ? 13. Introduce public land banking Effect depends Initial effect to raise prices. (a) for public projects only, on purposes of If combined with increased (b) develop land, and/or resale, poli- density of development permitting (c) resell raw land with cies followed, residential demand to be met with building covenants. especially less land and aggressive policy regarding of sales (increasing supply on densities. market), effect could be to reduce prices. Key. + Increase - Decrease ? Uncertain (+) (-) Weak effect.  - 53 - balances held abroad versus the return which would be earned locally or abroad by land sellers. The most serious problems connected with policies designed to reduce land prices are political. Such measures would be perceived as threatening the wealth of many Jordanians. This is no reason for doing nothing, however, but reason enough for starting as soon as possible on a program (including a public education campaign) for increasing land taxes. 5.29 As regards construction costs, the plan proposes that local building materials industries be strengthened, that attempts be made to reap economies of scale in these industries and in construction, and that building regulations be reviewed. The mission has not analyzed opportunities for cost savings through changes in the construction industry. This industry appears to be reasonably competitive, however, and its practice of importing workers and materials on the margin should imply an elastic supply, even if at somewhat higher prices than prevailed before the boom of the 1970s. Specific events can have a large effect on construction supply and costs in the short term. Rises in Iraqi imports through Aqaba led to sharp reductions in reliability of Jordanian supplies from the port (since truckers make larger profits from long than short hauls). Also, large firms employing foreign workers are unable to substitute for smaller Jordanian firms in carrying out smaller works in urban areas. 11 An analysis of the constraints on output of very small scale construction firms would be particularly useful to identify possible actions to stimulate supply of low income housing. Review of building regulations is the major objective of a study being funded under the UDP-I. 3. Role of the Private Sector 5.30 The plan proposes to induce more private interest in the housing sector through (a) creation of a secondary market for mortgages, (b) encouraging savings to go to savings and loan institutions, and (c) grant of incentives to firms investing in housing (making them eligible for industrial investment tax incentives). There are as yet no specifics on these proposals. In general, policies designed to increase tbe, supply of physical inputs into housing (i.e. improving availability of suitably located serviced land, training persons in construction trades) may have surer- effects than policies directed mainly at financial incentives to formal sector housing which appears to cater for only a minority of the population. 1/ Thus, no responsive bids were received for the first tranche of the UDP-I works, apparently because the large contractors invited to submit bids felt unable to carry out upgrading work in slum areas. On the other hand, when separate bids were invited for the upgrading and sites and services components, there were several responsive bids from local firms for individual upgrading contracts, and from major local and foreign firms for constructing the sites and services areas.  - 54 - 5.31 The plan states that employers will be encouraged to provide housing for their employees. The extent to which employer provided housing can be depended upon to solve the general problem (as contrasted with specific situations where employers in remote areas need to provide housing as an inducement for workers to locate there) is doubtful. Employers are unlikely to build as cheaply as specialist enterprises or small investors marketing their output to the ultimate beneficiaries. By far the largest employer is the government (almost 40% of Jordanian employees), and the government has no plans to launch a housing program of scale sufficient to provide all its new employees with shelter. Nor would this be desirable. 5.32 Liberalization of the landlord and tenant legislation would probably improve the allocation of the existing housing stock by making iit more costly to owners to keep units empty. Reform might also lead to iimprovements in housing quality. For example, one reason for the low rate of connections to water and sewerage systems is said to be that landlords have no way of recovering the connection charges from existing tenants. Rent controls probably also repress revenues from the land and building tax. On the other band, this legislation does not impede all building of rental housing, especially as landlords are free to set iinitial rental levels, and key money is also sometimes charged. 4. Increased Public Sector Participation S.33 Third, the plan proposes to increase public sector participation in shelter through the HB and the NHC. The HB is to devote more attention to the provision of low and middle income housing. Like other parts of the plan document, detailed strategies to back up these general objectives have still to be formulated. Initial forecasts by the HB made in June 1981 indicate that business will continue much as before with larger increases in commercial loans (to contractors, and/or commercial properties) than in loans to individuals. While the HB could increase its business by liberalizing its criteria (i.e., lending for a longer period, using graduated repayment mortgages, etc.), such liberalization would, as noted earlier, bring limited benefits to persons in the lower two-thirds of the income distribution. It may be preferable for the HB t:o maintain its criteria for normal loans, to continue to support the development of private savings and loan associations for upper middle income customers, and to support specific programs, such as UDP-I, designed to assist the lower income groups. 5.34 The plan proposes that the NHC should construct 17,500 new houses during the plan period. The details are not yet defined. Being the recipient of significant subsidies both in investment cost and financing t:erms, NHC housing could prove very attractive to the market if units were well located and provided with necessary infrastructural and social slervices. Were there no supply constraints, the NHC could probably sell around 75,000 units during the 1981-85 period to householders between the 9th and 80th percentiles, at a cost of at least JD 415 million. Sales  - 55 - receipts could amount to JD 305 million, implying a subsidy of JD 110 million. The capitalized value of the interest subsidy proposed by NHC (compared with terms offered by the HB) would add another JD 60 million. In fact, NHC would be unable to handle a program on this scale. It will be fully stretched to increase its output from the current 1,500 units per year to 4,000. Moreover, much NHC housing is very expensive; dividing the 3,500 units to be constructed during this plan period in Abu Nuseir by their cost (excluding land) as given in the Development Plan yields a cost of JD 12,500 per unit, or more than eight times the median household income in Amman. While some government housing will be required (for government servants in remote areas, for persons forcibly relocated due to public works), the justification for an expanded government housing program is not clear. It is unlikely to handle the needs of more than a small proportion of low income salaried formal sector (mainly government) employees (see Annex I, Table 5.8, for an estimate of the number of employees and households by type of job). 5. Provision of Shelter for Low Income Groups - Role of UDP-I. 5.35 The plan also provides for a JD 17 million urban development project designed to assist poorer target groups than served by other programs. The UDP-I will upgrade conditions of around 11,200 residents of low income squatter areas (out of a total of 100,000) and provide serviced sites for about 30,000 people between the 10th and 50th percentiles. The major innovations in this project which enable it to reach such low income groups are that it will provide smaller plots than previously allowed, with consequent savings in costs, and that beneficiaries can borrow up to 95% of the cost of building and land at 8.5% over 20 years. Over 40% of the funding is being provided by the HB at regular HB interest rates (the remainder is being funded from the government budget and a World Bank loan). The project is expected to be particularly attractive to families without large accumulated assets who are willing to save and invest over time in expanding their housing units. Perhaps the most important feature is that full cost recovery will be achieved, so holding promise for widespread future replication. (Costs of social facilities such as schools and health centres will be financed from regular budgetary sources.) 5.36 In addition to providing shelter for these income groups, which are mostly excluded from other formal sector programs, the project will ensure adequate provision of social services to beneficiaries. As such, it includes a strong element of urban planning and management as well as shelter. 5.37 The main problems which have so far been encountered are escalation in land prices (as much as doubled between appraisal and actual acquisition to JD 5-10/m2) 1/ and construction costs, and reassessment by government of the standards it would allow (forcing delays 1/ Equivalent to US$60,000 to US$120,000 per acre.  - 56 - of around one year in project execution, and effectively placing the sites and services sites out of reach of many persons in the initial target group (households in the 10th to 33rd percentiles)). The first beneficiaries of sites and services are expected to move onto their sites in mid-1984. The UDP-I experience will need to be carefully monitored in order to ascertain what measures are required for efficient replication and for serving the needs of households with even lower incomes than tDP-I reaches. 5.38 The shelter components of the UDP-I are being implemented by the Urban Development Department (UDD), a specially created department of the Amman Municipality which reports directly to the Lord Mayor. Replication of the project will require institutional modifications to facilitate work in municipalities outside Amman and to make it easier to engage and rietain qualified staff. The legislation on the NHC was changed in late 11982 to enable it to undertake upgrading and sites and services projects. NHC's past specialization in the provision of complete houses at subsidized rates runs counter to the fundamental objectives and modus olperandi of upgrading and sites and services, and special care will be needed to ensure that the organization effectively carries out its new functions. Finding means for NHC to make use of the expertise developed in UDD will be one element in this process. 5.39 The possibility of encouraging the private sector to develop and market plots affordable to low income groups should be explored once the initial government schemes are in operation. The essential government contributions to such an effort would be to give planning permission for small plot sizes and low-cost infrastructures, and to provide social siervices. It might also assist by making appropriate land available. 6. Information and Policy 5.40 Sound information is one critical input into sound policies. As noted earlier, there is a need for better information on the existing status of the housing stock, the types of tenure by different types of families, the role of the UNRWA camps in affording shelter to some of the poorest groups, patterns of movement from the camps to other accommodations, and financing mechanisms (including the role of remittances in the housing market and vertial extension of existing utnits). Several of the issues discussed above merit more detailed analysis and decision based on such information. One underlying issue is to ensure that the government effectively performs those functions which are necessarily government's, and reassesses its participation in activities which can be efficiently performed by the private sector. A factor which has led to a lack of clear priorities in the shelter field is that while there are many agencies in the sector, no agency is charged with responsibility for formulating a shelter policy, or monitoring its implementation. Consideration needs to be given to bridging this gap. The study on a national housing strategy under the UDP-I will cover several of these issues, and should provide a basis for defining future policies and institutional arrangements for the sector.  - 57 - E. Summary 5.41 The preceding discussion has examined the shelter sector in detail because of its considerable importance in the Jordanian urban system as a whole, and its importance for the welfare of individual Jordanians. Among the more significant conclusions are; (i) there is a need to define a housing policy and to allocate responsibility for formulating housing policies and monitoring their implementation; (ii) although there has been large-scale housing investment, the urban families in the lower half of the income distribution have not been well served and fully 41% of them live in units with 4 or more persons per room; (iii) through refinement of a series of policies (including planning, control of land use, land taxation, and development of appropriate standards) the private sector could be induced to provide better housing for a wider range of the population in suitable locations; and (iv) given the uncertainties regarding the speed and effectiveness with which general policies can be modified and implemented, there is also scope for public investments focused on providing serviced land and basic utilities affordable to lower income groups without subsidy in areas which complement and reinforce sound urban development patterns. VI . URBAN DEVELOPMENT STRATEGY A. Background 6.01 Earlier chapters have identified many problems related to urban development, and lines along which solutions to them might be sought. Definition of a urban development strategy depends upon judgements which extend well beyond technical matters, especially when it is a question of such delicate political issues as spatial strategies, planning procedures, targetting public expenditures to serve the needs of specific groups, and the allocation of institutional responsibilities. 6.02 When it comes to a discussion of problems and solutions, it is often possible to lose sight of the things which are going right. Therefore, it is necessary to reiterate that the Jordanian administration has proven remarkably successful in identifying and in meeting difficult challenges in the past, both at the level of managing the economy in the face of difficult external events, and also at "ground level" in improving the provision of many basic services (water, education, health, electricity) to all segments of the population.  - 58 - 6.03 The challenges will be no less in the future. Maintaining growth of real incomes, avoiding growing unemployment, and ameliorating the most serious consequences of likely increases in income inequality, will require continuing efforts. The task of guiding economic development will become more complex due to the increasing scale of the economy. Efficient development of urban areas will have special importance in providing a basis for internationally competitive service and manufacturing activities. 6.04 As noted in earlier chapters, realising the country's potential for increasing production, and for providing a high standard of living for its inhabitants, will require a more concentrated approach to planning, specifically taking more account of the spatial dimension and of economic costs and benefits of public investments and policies, ensuring more coordination among different public sector agencies, and in,creasing efforts to stimulate and to channel the considerable energies and talents of the private sector into productive pursuits. Because these activities cut across many sectors, many of the most important elements of an "urban" strategy involve the major central ministries. Distinguishing an "urban" strategy from the general strategy for economic growth becomes difficult since the former consists in part of the spatial dimension of the latter. The following ideas are advanced tentatively as elements deserving attention in the elaboration of a strategy. A summary of basic policy objectives, proposed policy actions, and responsible agencies is provided in Table 6.1 below. B. Policy Priorities 6.05 Strengthening planning involves securing technically qualified personnel and clarifying the institutional framework which connects plans with actions. The proposed Royal Commission on public administration could clarify this question, as well as the roles of local versus central government, and review the need for change in public sector remuneration, organizational and budgetary regulations, etc. 6.06 The NPC, as the agency charged with investment programming, should introduce spatial and regional considerations more explicitly into evaluating proposed investments and determining policies. (At a minimum, there is a need to avoid overinvesting in competitive industrial estates, putting up housing estates where they cannot open due to a lack of water and sewerage connections, putting infrastructural lines into new areas before existing lines are operating at reasonable capacity, etc.). 6.07 Greater Amman's strategic importance for future national growth justifies this area's receiving special attention, and options for improving planning and management of the area should be actively pursued (paras. 3.13, 3.36 and 3.37). 6.08 Many of the policy recommendations made above (improvements in land taxes, making masterplanning and building permits more dependent on  - 59 - development strategies, removing rent controls, better control and management of the public domain, improvements in cost recovery, etc.) pose substantial political challenges and will require substantial amounts of time to accomplish. A start should be made on them, however, since they are essential elements in establishing a framework within which pricing policies and public investments can bring a closer conformity between private behaviour and public objectives. 6.09 Land taxation, collection of betterment levies, and ensuring cost recovery from users of infrastructure deserve priority on account of their incentive effects and revenue-earning potential. Tightening up the administration of government-owned land should also have high priority, not only to avoid a loss of government resources, but also as one element in a policy designed to encourage more economic development patterns. 6.10 The study on shelter strategy (being implemented under UDP-I) will generate policy recommendations in that sector. At this point, the most constructive policy directions would appear to be reduction in relatively untargetted subsidies for shelter provision, more attention to providing appropriate infrastructures in suitable areas for the use of private housing developers, and adoption of planning and building standards which would be more affordable to low income groups. 6.11 The emergence of a serious threat of unemployment and lagging growth in the incomes of poorer households argues for (a) more careful identification of disadvantaged groups, (b) more careful monitoring of changes in incomes and identification of the welfare conditions of disadvantaged groups, and (c) formulation of interventions targetted to meet specific deficiencies. C. Urban Investment Priorities 6.12 Given Jordan's high level of urbanization, virtually all investments, public and private, have strong urban implications. The following paragraphs highlight a few areas of public sector investment which impinge most directly on Jordan's urban development as discussed in this report. 6.13 Water and Sewerage Water constitutes the most critical single physical constraint on Jordan's future growth patterns as regards the tradeoffs between agriculture and other activities, the tradeoffs between different types of industries, and the tradeoffs between developing different areas. The availability of clean water supplies and the proper disposition of effluents also have major health implications. Ensuring that water and sewerage schemes fit within sound spatial development plans, both inter-regionally and intra-regionally, taking account of plans for other complementary infrastructures and rational land use, should assume more importance in identification of projects and in project design.  - 60 - Table 6.1; POLICY OBJECTIVES, ACTIONS, AND RESPONSIBLE AGENCIES Desirable Responsible Policy Objectives and Main Findings Priority Urban-Related Actions Timing Agencies A. Develop efficient urban areas of suffi- cient size to generate agglomeration economies to underpin future growth of economy and employment; need for: 1. Decisions on priority centres for Define industrial policy with H GT,NPC growth. (If countermagnets to Amman spatial dimension. region desired, one should be selected). introduce spatial criteria into M NPC (a) investment appraisals, 2. Hore attention to efficient development (b) approvals of industrial H Hi of specific urban centres to economise investments. on costs of construction and maintenance of infrastructure and to ensure high level of service provision. Need to strengthen; - Regional planning both in terms of Establish Amman Region Planning H GT,MMRA,NPC,A defining strategies and securing /achinery. connections between plans and invest- evelop and implement integrated S CT,A,MT,NPC ments (priority to Amman) program for Amman Region Transport HPW,P,M - Incentives to firms/agencies to con- Exercise existing planning powers N NMRA, M,G form to more efficient development to enforce regional strategies patterns. Increase land taxes, collect S GT,A.M,WSC,AWSA betterment levies, ensure cost recovery of infrastructures. Arrest new low density squatting S GT, A on government lands. B. Identify and develop potentials of natural Review methods to induce more N NPC, MMRA, IDB aud human resources in smaller urban centres, development in regions, including appropriate machinery. Elaborate CVDB appraisal criteria. S CVDB C. Income distribution likely to become more Exploit existing surveys to identify S MSA, DOS unequal and ensuring basic needs of disad- disadvantaged groups. vantaged will require targetted measures. Mount special surveys, identify M MSA, A, DOS programs. Special efforts to strengthen Amman S A, GT Municipality organization and staffing. D. 1. Capacity of Government (central, local, Launch Royal Commission on Public parastatal agencies) to plan and imple- Administration. S GT went coordinated policies and investments Special study of local government will become more important as complexity functions, operations, finances H CT, MMRA of economy increases. (if not covered by Royal Commission). 2. Increase local government finances. E. 1. Strategy on shelter required to ensure Launch shelter strategy study as S NPC adequate service to all groups at soon as possible. minimum subsidy. Lunch planning and building S MHRA, A 2. Serviced land for housing at affordable standards study under UDP-I prices should be provided by private and Pursue implementation UDP-I. S NPC, A public sectors in appropriate locations together with infrastructural and social facilities. KEY: Azeocy Abbreviations: CT (Government) - Many ministries involved, including substantive intervention by Prime Minister's office; A - Amman Nunicipality; AWSA - Amman Water and Severage Authority; CVDB - Cities and Villages Development Bank; DOS- Department of Statistics; C - Governors; IDB - Industrial Development Bonk; M - Municipalities; Ml = Ministry of Industry; MMRA - Ministry of Mbuicipal and Rural Affairs; MPW - Ministry of Public Works; MSA M Hinistry of Social Affairs; MT - Ministry of Transport; NPC - Natioowl Planning Council; P - Police; WSC - Water Supply Corporation. Desirable Timing; S * Short term; M - Medium Term.  - 61 - 6.14 Financing Development of Smaller Municipalities The government intends local governments to play a larger role in providing the basic needs of populations and stimulating local development. It is further intended that local governments will have increasing scope and autonomy in developing local services. There is nevertheless a countervailing tendency to reduce the functions in the hands of the local governments in favor of specialized agencies and national ministries. The scope for further development of the Cities and Villages Development Bank will depend partly upon the evolution of this issue, including upon the extent to which central government is prepared to relinquish some of the current very detailed controls it excercises over local government operations in favor of the CVDB. The CVDB could have a major influence over efficiency of local government operations through its appraisals of investment proposals, and its assessments of the operational efficiency of local administrations while appraising their creditworthiness. Attention should be given to ensuring that appraisal criteria are consistent with larger regional and economic strategies as these emerge. 6.15 Regional Development. Regional development planning exercises should devote special attention to the possibilities for stimulating and supporting indigenous enterprise outside the major centres. Large public investments are not required. This is an area in which there is scope to review general policies which affect local enterprises and to use technical assistance (possibly under the IDB). 6.16 Given the importance of greater Amman in Jordan's development, major emphasis is recommended on that area. Clearly, investments are required in virtually all activities, from education to solid waste management. Two sectors, with strong implications for stimulating an efficient regional development pattern, warrant priority; transport and low income shelter. 6.17 Amman Urban Transport. Ensuring the efficient evolution of the transport system is perhaps the most effective avenue for improving the efficiency of greater Amman in supporting growth of industry and services and in providing residents with a high quality of life through efficient spatial development patterns. The existing emphasis on highway construction, rapid expansion of the subsidized bus company to replace private sector public transport, and the absence of effective mechanisms to shift the balance from private automobiles to public transport, suggest an opportunity to reorient policies to avoid waste and subsidies and to deal more effectively with problems of congestion and inadequate service levels. Transportation issues should form a major element in the responsibilities for regional planning machinery. There is scope for investments in traffic engineering and management works to enable existing road plant to accommodate more years of travel growth. Investments in equipment and, even more importantly, in technical assistance and training to improve the capacity of municipalities to handle road maintenance efficiently, also deserve attention. 11 1/ The ATMDP will support actions on several of these items.  - 62 - 6.18 Low Income Shelter. High costs of land and construction, increasing claims on the government budget, and possible increases in the relative size of the low income population, all make it unlikely that continuation of past policies and programs will make substantial inroads on improving shelter for large numbers of the low income groups. On the other hand, the innovations of UDP-I (upgrading existing slums, provision of serviced sites at standards and costs which are affordable to low income groups without subsidy and which provide opportunities for families to extend their housing as their circumstances permit, and coordinated installation of social facilities) hold real promise of ameliorating the shelter problem. Given the cost advantage of informal sector contractors, future projects should perhaps involve less construction of complete rooms in favor of emphasizing serviced land. Private developers should be encouraged to imitate the developments pioneered under UDP-I. Definition of future projects should also take account of the additional objective of establishing sound regional development patterns. D. Summary 6.19 A strategy for urban development needs to deal with policy issues as well as investments. The following priority actions on policies are suggested: (i) launching the proposed Royal Commission on public administration; (ii) taking account of spatial considerations in evaluating investment plans of different agencies; (iii) initiating steps to improve regional planning (including developing spatial investment strategies and coordinating activities of different agencies) in the Amman region; (iv) increasing land taxes and betterment levies, and bringing the use of public land under public control in the urban fringes; and (v) reviewing existing data sets to clarify characteristics of the poor and to define effective strategies for assisting them. 6.20 Although urban development requires investments in almost every sector, investments in certain sectors deserve special attention from the point of view of the urban efficiency considerations set out in this report. These include: (i) effectively managing the most serious resource constraint, water; (ii) increasing effectiveness of municipal investments in smaller centres through the CVDB;  - 63 - (iii) ensuring Amman region transport investments improve regional development patterns, provide efficient transport services, and avoid overexpenditure on roads and bus company subsidies; and (iv) implementing further urban development projects to provide an institutional basis for a development strategy which would reduce leapfrogging development, secure a higher degree of cost recovery from beneficiaries, and provide better services for families in the lower half of the income distribution.  -64- ANNEX I JORDAN URBAN SECTOR REVIEW TABULAR MATERIAL  - 65 - ANNEX I List of Tables 1.1 Jordan. Industrial Origin of GDP at Factor Cost, GDP and GNP at Market Prices, 1975-1980. 1.2 Estimates of Employment by Sector and Nationality, 1961, 1975, 1976, 1979, and 1980. 1.3 Jordan: Balance of Payments, 1975-1980. 1.4 Jordan; Cost of Living Index, 1970-1981. 1.5 Jordan: Draft Plan Forecast of Gross Domestic/National Product, 1980-1985 (1980 prices). 1.6 Jordan; Distribution of Investment in the 1976-1980 and 1981-1985 Development Plans. 1.7 Households in Amman Study Area: Income Distribution, Average Household and Per Capita Incomes, Numbers of Workers, and Household Size and Activity Rates, by Type of Area, 1979. 2.1 Estimated Population of East Bank by Sex, 1952, 1961, and 1962-1981. 2.2 Population of Jordan by District and Rural-Urban 1952, 1961, and 1979. 2.3 Distribution of Localities and Distribution of Population, Jordan East Bank, 1961, 1979, and Annual Rate of Growth 1961-1979. 2.4 Urbanization by Governorate, 1961, 1979. 2.5 Localities with Populations of 20,000 or more, 1961 and 1979. 2.6 Jordan: Population and Urbanization, 1952-2000. 2.7 Location of Industrial Development Bank Investments, 1976-1981. 2.8 Sectoral Distribution of Planned Investment by Socio-Economic Sectors and Region 1981-85. 2.9 Distribution of Jordanians (over 15 years of Age) Employed by Governorates and Sector, Non-Jordanian and Female Employment, 1979. 2.10 Employment by Sector and Governorate, 1961 and 1979. 3.1 List of Activities of Municipalities under Section 41 of Law No. 29 of 1955. 3.2 Jordan. Sources of Funds and Uses by the Central Government, 1976-1985. 3.3 Summary of Municipal Revenues and Expenditures, 1976-1980 actual, 1981-1985 forecast. 3.4 Summary of Amman Municipality Revenues and Expenditures, 1976-1980 actual, 1980-1985 forecast. 3.5A Outline Organization of Amman Municipality (October 1981). 3.5B Proposed Organization Chart of Amman Municipality (April 1983). *3.6 Planned Local Government Investments 1981-1985. 4.1 Jordan: Shelter Conditions and Other Social Welfare Indicators 1961, 1979. 4.2 Transport Institutions in Amman. 5.1 Housing Production and Finance, 1976-1980. 5.2 Construction Permits Issued in Amman and Zarqa, 1974-1980. 5.3A Households and Housing Units by Governorate, 1979. 5.3B Housing Units Unoccupied and Under Construction as Percentage of Total by Governorate, Rural and Urban, (Census Sample) 1979. 5.4 Estimates of Housing Costs and Affordability, Different Shelter Types, prices of mid-1981. 5.5 Jordan: Planned Housing Program, 1981-1985 Development Plan. 5.6 Estimation of Annual Housing Construction Required to Reduce Overcrowding. 5.7 Forecast of Annual Housing "Needs", 1979-1985. 5.8 Estimated Households by Occupation/Nationality, 1979. 5.9 Analysis of Loans approved by the Housing Bank, 1976-1980. A. Number of Loans According to Size of Loan B. Loan Amounts According to Size of Loan C. Loan Amounts According to Maturity. 5.10 Jordan: Average Interest Rates, 1976-1980. 5.11 Percentage of Households and Population by Tenure Arrangements.  -66- ANNEX I JORDAN-URBAN SECTOR REVIEW Table 1.1: JORDAN: INDUSTRIAL ORIGIN OF GDP AT FACTOR PRICES, GDP AND GNP AT MARKET PRICES, 1975-1980 (In millions of current Jordan dinars) % Annual Sector 1975 1976 1977 1978 1979 1980 Change Agriculture 2O.0 37.3 41.7 58.6 43.6 58.5 17.6 Mining and quarrying 16.3 17.8 19.9 22.9 27.5 34.3 16.0 Manufacturing 30.5 54.7 65.1 74.4 88.5 108.4 28.9 Electricity and Water 3.1 3.6 4.1 5.2 6.5 7.3 18.7 Construction lb.l 23.3 27.0 35.0 60.5 75.6 36.3 Trade 46.3 64.9 66.3 83.0 111.0 133.0 23.5 Transport and Communication 24.9 32.5 35.9 59.3 62.9 75.3 24.8 Finance and Business Services 29.7 33.4 43.6 53.1 73.8 83.4 22.9 Government Services b5.2 81.7 84.4 95.0 129.1 155.8 19.0 Other Services 14.2 12.3 18.7 21.6 24.2 30.8 16.7 GUPE at factor cost 272.3 361.5 40b.7 508.1 627.6 762.4 22.9 Net indirect taxes 9.2 43.2 74.3 81.0 84.4 106.6 63.2 GDi' at market prices 281.5 404.7 481.0 589.1 712.0 869.0 25.3 Net factor income from abroad 61.5 137.9 147.1 147.9 167.5 204.9 27.2 GNE' at market prices 343.0 542.6 628.1 737.0 879.5 1073.9 25.6 Source: Plan-Review Mission.  ANNEX I -67- JORDAN-URBAN SECTOR REVIEW Table 1.2: ESTIHATES OF EMPLOYMENT BY SECTOR AND NATIONALITY, 19.75, 1976, 1979, 1980 ('OOOs) 1961 a/ 1975 1976 e/ 1979 f/ 1980 b/ Total Nationals b/ Total c/ Total d/ Total Nationals Foreigners Total Nationals Foreigners Total Sector Agriculture 72.7 73.3 115.0 88.6 j/ 47.2 39.0 3.1 42.1 40.2 38.7 78.9 Mining 4.8 3.4 2.9 3.2 1.2 4.4 5.3 30.2 22.3 36.7 12.9 Manufacturing 17.5 24.0 36.0 31.9 8.9 40.8 44.3 Utilities .9 3.0 2.1 2.1 3.6 5.0 .4 5.4 5.1 5.1 Construction 22.0 48. 8.7 22.8 32.8 51.6 15.8 67.3 53.1 2.7 55.9 Trade 17.5 34.1 25.2 20.8 61.7 36.7 3.8 40.6 37.9 13.9 51.8 Transport and Communication 7.6 18.9 19.0 13.9 32.8 31.5 .8 32.2 32.4 li.4 43.8 Finance and Business I/ 3.3 3.1 8.8 9.0 .5 9.5 9.4 Public Administration and Defense 59.4 i 139.9 57.0 100.4 i/ 146.1 147.3 3.7 151.0 185.2 175.8 Other 122.0 k/ 100.0 1/ 22.5 5.3 27.8 202.3 347.7 379.7 374.0 37.1.9 377.6 43.5 421.1 390.7 79.6 470.3 N.B.: Some totals do not add up due to rounding. a/ Source: Jordan Department of Statistics, First Census of Population and Housings 1961 (Volume 2) May 1964. I Source: National Planning Council, Demand and Supply of Labor Force to 1985 (Arabic, May 1981). Based on 1979 Census and information on foreign workers. c/ Source: World Bank, Country Economic Memorandum on Jordan, Report No. 3135-JO, December 24, 1980, Table 1.2, page 32. d/ Source: Population, Labor Force, Emigration and Manpower Requirements (draft Bank Hemorandum 6 January 1981), page 6. e/ Department of Statistics, Multipurpose Sample Survey of Households, 1976. F/ Department of Statistics, 1979 Census Sample (Calculated from printouts supplied to plan review mission). =I Full-time equivalents. h/ Included in trade. v/ Public administration and personal services. i/ Includes activities not adequately described (30,720). k/ Defence and other services. 1I Military and police.  -68- ANNEX I JORDAN-URBAN SECTOR REVIEW Table 1.3: JORDAN: BALANCE OF PAYMENTS, 1975-1980 (In millions of current Jordan Dinars) 1975 1976 1977 1978 1979 1980 Merchandise Balance -184 -270 -371 -368 -467 -543 Exports 49 69 82 91 121 171 of rhich: Rte-exports 9 19 22 27 38 51 E'hosphates 20 19 17 19 26 47 Manufactures 4 4 9 12 14 19 Nfegetables 3 5 7 8 12 11 Imports 232 339 453 459 588 715 Non-Factor Services (Net) 4 23 56 28 -17 51 Exports 72 114 145 175 220 298 Imports 68 91 90 147 236 247 Factor Services (Net) 61 138 147 148 167 205 of which: Workiers Remittances Credits 53 136 155 159 180 237 Debits 0 7 15 20 24 46 Transfers: (Net) 140 127 166 107 314 399 of which: Official Receipts 138 123 167 103 318 391 Current Account Balance 21 17 -2 -86 -2 112 Credits 326 460 565 548 867 1145 Debits 305 443 567 634 869 1034 Medium & LT Private Capital (Net) 7 4 5 15 5 8 Medium & LT Public Capital (Net) 38 -11 46 74 50 23 Short Term Capital (Net) - -7 -1 2 3 1 SDR Allocations (Net) - - - - 1 1 Errors and Omissions -19 -14 17 32 6 -39 Changes in Reserves (- = increase) -47 11 -65 -37 -64 -106  -69- ANNEX I: JORDAN-URBAN SECTOR REVIEW Table 1.4: JORDAN: COST OF LIVING INDEX, 1970-1981 All Drinks Other Goods Time Period Items Food and Tobacco Housing Clothing & Services Yearly Average Old Index, 1969 Base Year 1970 105.9 105.4 ... 105.7 106.4 106.8 1971 111.0 112.6 ... 109.2 112.7 109.5 1972 119.5 124.5 ... 117.2 120.3 112.3 1973 132.8 148.8 ... 122.1 136.5 114.8 1974 158.6 196.5 ... 132.5 156.7 122.2 1975 177.6 228.0 ... 139.7 168.1 139.9 New Index, 1975 Base Year 1976 111.5 114.6 105.8 106.8 107.6 112.1 1977 127.7 131.0 112.0 114.8 139.3 132.8 1978 136.6 135.7 116.8 126.7 146.1 152.6 1979 156.0 143.6 125.5 162.8 180.5 177.9 1980 173.3 159.2 135.0 175.3 191.2 213.5 1981 192.5 171.3 145.0 187.0 170.9 249.4 Source: Bank of Jordan  -70- ANNEX I JORDAN-URBAN SECTOR REVIEW Table 1.5: JORDAN: DRAFT PLAN FORECAST OF GROSS DOMESTIC/NATIONAL PRODUCT 1980-1985 (in Million of Constant 1980 JD) a/ Average Annual 1980 1981 1982 1983 1984 1985 Rate of Growth Plan Plan Review Mission Agricualture 60 65 69 75 80 86 7.5 4.9 Mining & Manufacturing 154 181 214 252 297 350 17.8 20.1 Electricity & Water 8 10 11 13 16 19 18.9 18.9 Construction S2 59 66 74 84 94 12.6 10.8 Trade 138 147 163 181 201 222 10.0 6.5 Transport & Communications 91 100 111 125 140 154 11.1 11.1 Goverrnment Services 122 126 131 135 140 145 3.5 5.4 Utners 80 87 95 1U4 113 123 9.0 7.0 Gross Domestic Product at Factor Cost 705 775 860 959 1071 1193 11.0 Indirect Taxes 109 120 134 148 165 184 11.0 Gross Domestic Product at Market Prices 814 895 994 1107 1236 1377 11.1 Net Factor Income from Abroad 197 217 238 262 288 318 10.0 Gross National Product 1011 1112 1232 1369 1524 1695 10.9 Memo .Ltems: Population (Million) 2233 2417 2405 Y496 2590 2688 3.8 Average per Capita income (JD) 452.8 479.3 511.2 547.6 588.4 630.1 6.8 Source: National Planning Council. a/ Source different from Table 1.1.  ANNEX I -71- JORDAN-URBAN SECTOR REVIEW Table 1.6: JORDAN: DISTRIBUTION OF INVESTMENT IN THE 1976-1980 AND 1981-1985 DEVELOPMENT PLANS (In millions of current Jordan dinars and percent) 1976-1980 Plan Plan Implemented 1981-1985 Plan Sector % of X of X of Total Total Total Total Total Total Agriculture 40.1 5.2 51.7 4.2 234.5 7.1 Water and Irrigation 97.4 12.7 73.8 6.0 521.7 15.8 Manufacturing and Mining 229.2 30.0 316.8 26.0 758.8 23.0 Tourism 24.4 3.2 33.5 2.7 65.6 2.0 Electricity and Energy 42.9 5.6 99.3 8.1 163.5 _5.0 Commodity Producing Sectors 434.0 56.7 575.1 47.1 1,744.2 52.9 Trade and supply 3.8 0.5 16.7 1.4 36.9 1.1 Transport 119.9 15.7 253.4 20.7 545.4 16.5 Communications 20.1 2.6 22.8 1.9 106.9 3.2 Education, Culture, Information 37.5 4.9 44.9 3.7 243.9 7.4 Health 9.0 1.2 6.0 0.5 100.7 3.1 Labor,Social Development and Vocational Training 4.8 0.6 1.2 0.1 24.4 0.7 Housing and Government Buildings 86.0 11.2 257.7 21.1 308.1 9.3 (of which Housing) (250.0) (20.5) (290.2) (8.8) Municipal and Rural Affairs 38.8 5.1 39.4 3.2 176.0 '5.3 Al Awqaf 5.5 .7 3.0 0.2 6.4 0.2 Royal Scientific Society and Statistics 5.9 0.8 1.8 0.1 7.5 0.2 Service Sectors 331.3 43.3 646.9 52.9 1556.2 47.0 TOTAL 765.3 100.0 1222.0 100.0 3300.4 100.0 Source: National Planninz Council.  -72- AMNU I JORDAN AMU WCTOR UVI9W Table 1.7 a SOIHOLDS IN AMfNA STUDY ARRAINCoNS DISTRIBSTION AVMACS HOUSliOLD AMD PU CAPITA INCOMES, NUK0M41 07 WOgRRR, AND HOUS8HOLD SIZE AND ACTIVITY RAESS, BY TYPi OP ARIA, 1979 A/ loosehold Ino_ms Waebr of House-old out of 1000 X at Avrage S of House- Averae AVragse Activity Per Capita (JD per month) O- 50- 100- 150- 200- 250- 300- 350- 400- 450- TOTAL Popu Household hold witb Nuer ou-ehold Rets d/ Ano1al lation Incoe no workers Workers cb/ Size CC/ leaum UD) !/ A.v Maet Upper eoss, 24 81 119 125 157 73 66 54 122 179 1000 7.4 300 14.0 1.3 5.1 261 706 3: Developing Upper Inrow 38 36 80 115 83 132 110 68 138 200 1000 4.6 329 12.3 1.4 4.8 302 023 C; Central Area 9 194 210 104 132 123 94 49 31 54 1000 2.9 217 5.5 1.6 5.0 282 465 D; Mture Middle-Rango 74 217 272 102 101 70 54 50 31 29 1000 27.3 179 10.8 1.5 6.8 225 316 E: Developing Hiddlo Range 26 190 388 151 79 52 16 72 13 13 1000 11.1 167 4.3 1.4 6.7 212 299 F: A-.n Evirons 76 293 152 188 101 41 76 2 17 54 1000 11.6 175 5.0 1.6 6.2 262 339 G. High Omn-ity b/ 98 363 207 171 43 47 37 24 10 0 1000 12.7 133 5.5 1.5 8.1 185 197 0: Zarqa/R.ueif. 89 430 212 148 62 23 21 15 0 0 1000 22.4 120 8.4 1.5 7.3 201 197 STUDY AREA 65 258 221 141 90 57 49 37 34 48 1000 100 182 8.7 1.3 6.7 222 326 Source; HSloroc Fon F ed Aeociate, J-uey end Parters Land Use Planniei Data Technical Memorsodvo 9, A-an Region Tr.esportation Study. July 1980 pf. 13-22. T/ he d.ta name fro- 1724 interviews of households in 53 snees ggregated on the basis of / Mutber of worker divided by bousehold sio. their uocio-econonic oharsuteristic. Study area nocludes Salt, Saqas and Maedaha. !/ AveraSe houehold icose divided by average household size tines 12. Noto b/ Refugre camps ord eurcuouding squatter -rea So, squatter areas ore lso incIded in that GDP per .spita in 1979 - JD 304, nd GNP per capit amounted to JD 377. Zone D. c/ Calculted by mission fro- tabular distnibutin in ls source on the assoupti-n that a) inc-m of .a.h category is at the mid point of the ronge, and income io the high.ot category is 600. cb) the utber of workere in households with 3- workers is 3.5 cc) the nmbher of persona in househblde with 10- people is 11.  -73- ANNEX I JORDAN-URBAN SECTOR REVIEW Table 2.1: ESTIMATED POPULATION OF THE EAST BANK BY SEX FOR 1952, 1961 AND 1962-1981 (IN '000) a/ Rate of Year Female Male Total Growth 1981 1114.8 1207.5 2322.3 3.9 1980 1065.7 1167.3 2233.0 4.0 1979 b/ 1024.7 1122.4 2147.1 4.3 1978 987.7 1069.8 2057.5 4.4 1977 946.3 1025.3 1971.6 4.4 1976 906.8 982.5 1889.3 4.4 1975 869.0 941.5 1810.5 4.4 1974 832.8 902.2 1735.0 3.6 1973 804.0 871.1 1675.1 3.6 1972 776.4 841.1 1617.5 3.6 1971 749.8 812.2 1562.0 3.6 1970 723.9 784.3 1508.2 3.5 1969 699.7 758.1 1457.8 3.5 1968 676.4 732.7 1409.1 3.5 1967 653.8 708.2 1362.0 28.2 1966 510.0 552.4 1062.4 3.3 1965 493.4 534.6 1028.0 3.4 1964 477.4 517.1 994.5 3.3 1963 461.9 500.3 962.2 3.4 1962 446.9 484.1 931.0 3.4 1961 c/ 431.4 469.4 900.8 4.9 1952 284.5 301.7 586.2 Source: Department of Statistics a/ Figures for 1962-1978 have been revised in the light of the Housing and Population Census 1979. b/ Preliminary Results of the Housing and Population Census on November 10, 1979. c/ Results of the First Census of population.  - 74 - ANNEX I JORDAN-URBAN SECTOR REVIEW Table 2.2; POPULATION OF JORDAN, BY DISTRICT AND RURAL-URBAN, 1952, 1961 AND 1979 1952 a/ 1961 1979 Z of % of Z of x of Zof District Number East Bank Total Number East Bank Total Number Total Amman 218,465 37.2 17.5 433,618 48.1 25.4 1,185,709 55.2 Balqa 64,926 11.1 4.9 79,057 8.8 4.6 151,544 7.0 Ajloun/Irbid 213,877 36.4 16.1 273,976 30.4 16.1 609,251 28.4 Karak 67,211 7.5 3.9 126,114 5.9 89,617 15.3 6.8 Ma'an 46,914 5.2 2.7 74,976 3.5 Sub-Total, East Bank 586,885 100.0 44.3 900,776 100.0 52.8 2,147,594 100.0 West Bank 742,289 55.7 805,450 47.2 NA NA Total 1,329,174 - 100.0 1,706,226 - 100.0 NA NA of which: "Fully Urban" b/ 482,434 - 36.3 748,291 - 43.9 NA NA Non-Urban 846,740 - - 957,935 - - NA NA East Bank Fully Urban 216,600 36.9 464,103 51.5 (1,276,954)c/ (59.5)c/ Other 370,285 63.1 436,673 48.5 (870,640)c/ (40.5)c/ Population in Localities of - 5000 or more 469,493 52.1 NA 1,508,100 70.2 - Under 5000 431,283 47.9 NA 639,494 29.8 Sources; - Jordan, Department of Statistics, First Census of Population and Housing, 18th November 1961, Volume 1, Final Tables, April 1964. - Jordan, Department of Statistics, Statistical Yearbook, 1981. a/ 1952 Census, in contrast to 1961 and 1979 Censuses, excluded foreign visitors, and army personnel and their families living in encampments. Hence, 1952 population is understated relative to 1961 and 1979 censuses. b/ "Fully urban" includes all localities of 10,000 or more inhabitants (excluding those inhabited exclusively by Palestinian refugees), all district capitals regardless of size, and all localities of 5,000 to 9,999 inhabitants in which two thirds or more of the economically active males were reported in non-agricultural occupations and those suburbs of Jerusalem and Amman cities whose populations were similarly in non-agricultural occupations. c/ According to the Statistical Yearbook 1981 the urban population, defined as inhabitants of 28 administrative centres and two large suburbs of Amman came to 1,276,954. This definition of "urban" is less inclusive than the definition of "fully urban" used in previous censuses.  -75- , ANNEX I JORDAN-URBAN SECTOR REVIEW Table 2.3; DISTRIBUTION OF LOCALITIES AND DISTRIBUTION OF POPULATION, JORDAN EAST BANE 1961, 1979 Annual Rate of Growth 1961 1979 of Population p I t' Population bl Population c ~~~~~~~~~~1961-1979 Localities Number of P lton Number of 0Io o Number of Col.(6) over Cold.9) over Size Localities Number Total Localities b/ Number Total Localities c/ Number Total Col.(3) Col. (3) (1) (2) F(3) (5) (6) (7) (B) (9 10) (11) (12) 20,000 3 387,240 43.0 11 1,209,841 56.2 13 1,279,361 59.4 6.5% 6.9% 15,000-19,999 1 16,176 1.8 - - - - - - NEG 14EG 10,000-14,999 2 22,015 2.4 6 69,673 3.2 6 69,673 3.2 6.6% 6.61 5,000-9,999 6 44,062 4.9 19 123,587 5.7 22 149,399 6.9 5.9Z 7.0? 3,000-4,999 12 77,148 8.6 41 156,530 7.3 42 160,479 7.5 4.0S 4.2% Subtotal 24 546,641 60.7 77 1,559,631 72.5 83 1,658,912 77.1 6.0S 6.4X Emergency Camps */ 0 0 6 99,281 4.6 - - - NA - Other 354,135 39.3 - 493,361 22.9 _ 493,361 22.9 1.91 1.9? Total Population 900,776 100.0 83 2,152,273 d/ 100.0 83 2,152,273 d/ 100.0 4.9S d/ 5.0 d/ Sources; - Jordan, Department of Statistics, First Census of Population and Housing. 18th November, 1961, Volume 1. Final Tables, April 1964. - Jordan, Department of Statistics, Preliminary Eatimiates of the Housing and Population Census on November 10, 1979 in the Governorates of the East Bank (n.d.). al Palestinian refugees camps established before 1967 were not identified as separate localities and the refugee populations were included in population counts for the localities where they occurred. Emergency camps (established after 1967) were counted separately in the 1979 Census. b/ Emergency refugee camps accounted for separately. c/ Emergency refugee camps included in size classes. d/ The 1979 population total given in the preliminary estimates was subsequently reduced to 2,147,600, implying average annual increase of 4.9Z per annum between 1961 and 1979. The details by city size were unavailable for the revised estimate, although the main difference concerned Anau  - 76 - ANNEX I JORDAN-URBAN SECTOR REVIEW Table 2.4: URBANIZATION BY GOVERNORATE, 1961, 1979 1961 1979 Urban a/ X Total % x Urban b/ % Total % % ('000) Urban ('000) Total Urban ('000) Urban ('000) Total Urban Amman 360.0 77.6 433.6 48.1 83.0 1046.8 69.4 1185.7 55.2 88.3 Balqa 16.2 3.5 79.1 8.8 20.5 83.7 5.6 151.5 7.0 55.3 Irbid 65.0 14.0 274.0 30.4 23.7 303.3 20.1 609.3 28.4 49.8 Karak 7.4 1.6 67.2 7.5 11.0 30.6 2.0 126.1 5.9 24.3 Ma'an 15.6 3.4 46.9 5.2 33.3 43.7 2.9 75.0 3.5 58.3 Total 464.2 100.0 900.8 100.0 51.5 1508.1 100.0 2147.6 100.0 70.2 Sources: - Jordan, Department of Statistics, First Census of Population and Housing, 18th November 1961, Volume 1, Final Tables, April 1964. - Jordan, Department of Statistics, Preliminary Estimates of the Housing and Population Census on November 10, 1979 in the Governorates of the East Bank (n.d.). a/ For definition, see note (b) to Table 2.2. b/ Localities with 5000 or more inhabitants.  - 77 - ANNEX I JORDAN-URBAN SECTOR REVIEW Table 2.5; LOCALITIES WITH POPULATIONS OF 20,000 OR MORE Annual Rate Locality Governorate 1961 1979 of Growth Amman a/ Amman 246,475 623,925 5.3 Zarqa a/ Amman 96,080 216,065 4.6 Irbid Irbid 44,685 113,048 5.3 Ruseifah a/ c/ Amman 6,200 49,885 12.3 Salt a/ Balqa 16,176 33,037 4.0 Nadaba a/ Amman 11,224 28,236 5.3 Ramtha Irbid 10,791 27,130 5.3 Aqaba Ma'an 8,908 26,999 6.4 Wadi Seer a/ c/ Amman 4,455 24,400 9.9 Suweileh a/ c/ Amman 4,978 23,996 9.1 Mafraq Irbid 9,499 21,280 4.6 Sub-total (excluding camps) (459,471) (1,187,800) 5.4 Schneller Camp Amman NA b/ 23,261 NA a/ c/ Baqaa Camp a/ Balqa NA b/ 45,238 NA Total 459,471 1,256,299 5.7 a/ Included in the Amman Urban Regional Planning Area. b/ Emergency refugee camps, established in 1967. c/ Close suburbs of Amman Municipality. Sources; - Jordan, Department of Statistics, First Census of Population and Housing, 18th November 1961, Volume 1, Final Tables, April 1964. - Jordan, Department of Statistics, Statistical Yearbook, 1981.  - 78 - ANNEX I JORDAN-URBAN SECTOR REVIEW Table 2.6; JORDAN: POPULATION AND URBANIZATION, 1952-2000 A. In Thousands 1952 1961 1979 2000 (Forecast) Governorate Low Base Maximum Amman 218.5 433.6 1185.7 Balqa 64.9 79.1 151.5 Irbid 213.9 274.0 609.3 Karak ( 67.2 126.1 ( 89.6 Ma'an ( 46.9 75.0 Total Population 586.9 900.8 2147.6 3800 4300 5400 bX/ b/ Urban 216.6 464.1/469.5 a/ 1508.1 a/ 3000 3500 4700 Other (rural) 370.3 436.7/431.3 639.5 650-800 B. Annual Rates of Growth 1979-2000 (Forecast) Governorate 1952-1961 1961-1979 Low Base Maximum Amman 7.9 5.7 Balqa 2.2 3.7 Irbid 2.8 4.5 Karal ( 3.6 (2.7 Ma'an ( 2.6 Total Population 4.9 4.9 2.7 3.4 4.5 Urban 8.8 b/ 6.7 a/ 3.4 4.1 5.6 Other (rural) 1.8 2.2 0-1 0-1 0-1 a/ Localities with population of 5000 or more. b/ See Annex I, Table 2.2, for the 1952 and 1961 Census definition of Urban. Sources; - Jordan Department of Statistics. First Census of Population and Housing, 18 November 1961. Final Tables, Volume 1. April 1964. - Jordan Department of Statistics, Preliminary Estimates of the Housing and Population Census on the Night of November 10, 1979 (nd).  - 79 - ANNEX I JORDAN-URBAN SECTOR REVIEW Table 2.7: LOCATION OF INDUSTRIAL DEVELOPMENT BANK INVESTMENTS, 1976-1981 Equity Investments Loan Approvals Small Business Loans as of December 31, (1976 to first 5 1976-1980 1979 and 1980 1980 months 1981) Amman (including Amman Zarqa, Ruseifa, Madaba) 63.4% 65.3% 51.5% 84.1% Salt, Baqaa 8.0% 7.3% 9.7% Irbid Governorate 15.2% 18.0% - 4.6% Karak Governorate 4.8% 24.4% 0.1% (of which Tafila) (24.4) Ma'an Governorate 1.5% 14.6% 1.5% (of which Aqaba) (13.0) Other, National, Not Specified 21.4% 2.4% 2.2% Total (X) 100.0% 100.0% 100.0% 100.0% Total (JD'QOO) 1140 564 3073 36320 Source; Industrial Development Bank.  -80- AANNEX I JORDUD - WILBAN SECTOREUVIEW Table 2.8a SECTORAL DISTRIBUTION OF PLAINED INVESTMENT BY SOCIO-ECOHONIC SECTORS AND REGION 1981-1985 (current JD'000) Total Socio - Economic Distribution Regional Distribution Prod- Infra- Social Urban Rural Urban National Aman Balqa Irbid Karak Mean Allocations uctive structure & or Non- Rural Allocated Agriculture and Cooperatives 234505 234505 - - 100 233655 .750 215740 100 18665 - - - Water and Irrigation 521707 265700 256007 - 47225 321852 152630 94717 76360 18160 281050 37745 13675 Mining and Manufacturing 758750 758750 - - 52800 170650 535300 145600 53400 84500 117400 8000 349850 Tourism and Antiquities 65650 65650 - - 3560 8350 53740 53340 3470 - 8250 400 190 Energy and Electricity 163440 163440 - - 26100 18340 119000 116000 26600 - 14700 1400 4740 Trade and Supply 36980 - 36980 - 10400 - 26580 21900 10080 - 1000 4000 Transport 545540 - 545190 350 134340 13250 397600 325710 86830 6950 22600 15200 88250 Comunication 106830 - 106830 - 33600 2100 71130 74130 32700 - - - - Youth and Culture 9765 - - 9765 4000 - 5765 5315 4450 - - Information 7880 - 7880 - 2980 - 4900 2900 2980 - 2000 Education 226327 - - 226327 35185 58810 132332 106097 34950 4600 58280 17400 5000 Health 100705 - - 100705 34285 670 65250 53770 22785 2100 12000 5000 5050 Social Development 15020 - - 15020 8355 6665 - 14560 460 - - - - Labour 9200 - - 9200 4620 3220 1160 1160 3950 570 1270 2250 Housing and Government Buildings 308088 - 13116 295072 54175 8505 245508 174476 79632 4755 28400 6360 14565 Municipal, Rural and Environmental Affairs 175600 - 157850 17750 66600 24000 85000 108500 63100 500 - - 3500 Awqaf 6400 - - 6400 6030 370 - 2050 4350 - - - - Science, Technology mnd Statistics 7443 - 7443 - 7443 - - 1400 6043 - Total MUIR3 1T880 T4T5lW Wi= 80W 531798 870437 1896645 1517365 51224 140800 546 950 915O5 491070 Source& National Planning Council.  -81- ANNEX I JORDAN - URBAN SECTOR REVIEW Table 2.98 DISTRIBUTION OF JORDANL4NS (OVER 15 EARS OF AGE) EMPLOYED BY GOVERNORATE AND SECTOR, NON-JORDANIAN AND FnMALE EMPLOYENT, 1979 (Percentages) Governorate East Bank Total Non- Jordanian Sectoral _____ ____ _____ ____ _____ ____ _____ ____ ___ _ ____ _____ ____ _____ ____ ____ Jordanians Female as Composition A "n Balqa Irbid Karak macn Jordanians Non- Total as 2 of B of all of Employ- Jordanians Total Jordanians ment (M)* (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11) (a) (b) (a) (b) (a) (b) (a) (b) (a) (b) (a) (b) (a) (b) (b) Agriculture, Hunting 22.3 21.8 36.9 13.6 5.4 100.0 - Forestry and Fishing 4.1 28.8 16.1 21.7 11.1 10.3 9.0 10.2 7.3 1.0 16.8 Mining and Quarrying 62.2 4.9 14.6 9.8 8.5 100.0 - 1.0 0.6 0.6 1.4 1.6 0.9 4.5 1.2 30.5 - 1.1 Manufacturing 76.6 4.6 13.0 3.7 2.2 100.1 - 11.2 4.9 4.6 4.7 3.6 8.7 14.8*C 8.9 13.8 5.1 9.4 Electricity, Gee, 77.6 3.4 17.2 0.9 0 .9 100.1 - and Water 1.8 0.6 1.0 0.2 0.2 1.3 1.3 1.3 7.9 1.7 1.1 Construction 70.5 8.0 15.8 2.7 3.2 100.2 - 16.9 13.9 9.1 5.6 8.6 13.7 29.2 14.9 16.2 0.2 11.9 Trade (incl. Hotels 73.0 2.6 17.8 1.9 4.8 100.1 - and Restaurants) 12.5 3.2 7.3 2.8 9.3 9.7 11.3 9.9 9.5 2.0 11.0 Transport, Storage 62.2 6.5 20.0 5.0 8.3 100.0 - end Coamunications 9.1 6.9 7.0 6.5 10.5 8.3 2.3 7.8 2.4 0.5 9.3 Finance, Insurance, 81.9 3.3 10.5 1.0 3.3 100.0 - Real Estate and Business Services 3.4 1.0 1.0 0.4 1.6 2.4 1.5 2.3 5.4 11.9 1.9 Public Adinistration 46.4 7.2 30.6 9.1 6.6 99.9 - end Defense 31.8 35.7 50.3 55.2 52.0 39.0 10.9 36.7 2.5 13.5 37.4 Other Services 78.9 5.7 12.5 1.7 1.1 99.9 - 8.3 4.3 3.1 1.6 1.4 6.0 15.4 6.7 18.9 22.0 All of Jordanians (2) 57.0 7.8 23.7 6.5 5.0 100.0 - 100.1 99.9 100.1 100.1 99.9 100.3 7.7 Non-Jordanians (1) 75.2 7.9** 4.8 3.4 8.8 100.1 100.2 Total (Jordanians plus 58.5 7.8 22.2 6.2 5.3 100.0 99.9 Non-Jordanians) (Z) Non-Jordanian as 2 of Total 10.7 8.4 1.9 4.5 15.9 8.3 8.3 Jordanian Females as % of Jordanians 8.0 7.7 7.3 7.9 3.9 7.7 7.7 Emploent as 2 of Population 20.1 18.4 17.9 18.7 21.3 19.4 Labor Force Parti- cipation Rate(E) 20.8 19.2 18.7 19.3 22.4 20.4 Une )lovnt Rats (2) (1) Jordanian 9.4 10.5 8.9 6.2 8.1 9.1 (3.5) (2) Total 8.8 9.8 8.8 6.4 7.4 8.7 ReRional Distribution of Powulation 1979 Cenu Saple Analysis (2) 56.4 8.3 24.0 6.4 4.8 99.9 Census Total (2) 55.2 7.1 28.4 5.9 3.5 100.1 Sourcea 1979 Census Sample (NKB The sample was of 22 of bousebolds; tbhrefore data in smaller cells ny change substantially in the full Census Analysis.) *Sources National Planning Council, Demand *nd Supply of Labor Force to 1985 (Arabic, May 1981) NB. The main adjustments made in this source to 1979 Cenaus Sample Analysis were to augmnt the Non-Jordanian agricultural employees and to update the ltguree to 1980. ** The 1979 Sample Census Analysis recorded 219 Non-Jordanians in non-metallic manufacturing in Balqa Governorate (out of a totel of 1018 non-Jordanian euployees in the Country as a whole). This was eitber an error, or resulted from a foreign labor cap (probably at Fuheis) being selected as a sampled locality and uisclassified as anufacturing rather than construcion. This observation was therefore suppressed in calculating the percentages in this table.  - 82 - JORDAN. URBAN SECTOR REVIEW Table 2.10: EMPLOYMENT, BY SECTOR AND GOVERNORATE, 1961 AND 1979 Percentage Amman Balqa Irbid Karak Ma'an Total Annual Growth of E11ployment Percent of employees in Agriculture 14 4 69 29 56 16 71 22 41 11 36 10 -3.0 Mining and Manufacturing 16 12 6 6 7 6 5 6 3 6 11 10 4.0 Construction 12 17 7 14 10 9 6 6 13 9 11 14 6.4 Economic Services a/ 16 27 7 12 10 16 7 10 17 21 13 21 7.0 Government & Other Services b/ 42 40 11 40 17 53 12 57 26 53 29 45 6.3 100 100 100 100 100 100 101 101 100 100 100 100 4.2 Rate of Employment Growth 1961-1979 4.7 2.6 4.1 2.4 1.8 4.2 Percentage of Employment 1961 52 9 26 8 6 101 1979 59 8 22 6 5 100 Percentage of Population 1961 48 9 30 8 5 100 1979 55 7 28 6 4 100 Source; Department of Statistics, First Census of Population and Housing, 1961, Volume 2 (1964) Department of Statistics, 1979 Census Sample (calculated from printouts *upplied to plan review mission). a/ Utilities, Trade, Transport and Communications, and Finance and Business Services. bf Includes "activities not adequately described" in 1961. N.B. 1979 figures for sectoral distribution of employment by Governorate, refer to employmentof Jordanians.  - 83 - ANNEX I JORDAN-URBAN SECTOR REVIEW Table 3.1: LIST OF ACTIVITIES OF MUNICIPALITIES UNDER SECTION 41 OF LAW NO. 29 OF 1955 Present Responsible Authority Other Municipalities Activity Amman in Amman Region 1. City Planning Municipality Municipality 2. Building Liceses; Municipality Municipality Building Inspection 3. Water Supply Amman Water and Water Supply Corporation Sewerage Authority 4. Sewerage Amman Water and Water Supply Corporation Sewerage Authority 5. Electricity and Gas Jordan Electric Power Jordan Electricity 6. Streets Municipality Municipality 7. Primary Education* Ministry of Education Ministry of Education 8. Secondary Education Ministry of Education Ministry of Education 9. Health Center and Ministty of Health Ministry of Health Hospitals* 10. Street Cleaning and Municipality Municipality Refuse Collection 11. Provision of Health Municipality Municipality Inspectors 12. Public Health Matters Municipality and Ministry Municipality and Ministry of Health of Health 13. Control of Food and Municipality Municipality Food Products 14. Animal Slaughtering and Municipality Municipality Veterinary Inspection 15. Public Markets Municipality Municipality 16. Fire Service Ministry of Civil Defense Ministry of Civil Defense 17. Police Service Police Department Police Department 18. Provision and Main- Municipality Municipality tenance of Gardens and Parks 19. Flood Control Municipality Municipality 20. Civil Defense Ministry of Civil Defense Ministry of Civil Defense 21. Cemeteries Municipality Mtunicipality 22. Regulation of Dangerous Municipality Municipality Substances 23. Regulation of Begging Ministry of Labor and Ministry of Labor Social Affairs and Social Affairs 24. Regulation of Street Municipality Municipality Traders 25. Garbage Collection Municipality Municipality 26. Dog Control Municipality Municipality 27. Animal Markets Municipality Muinicipality 28. Control Over Advertising Municipality Shared with Municipality Shared with Other Bodies Other Bodies 29. Location of Industry Municipality Municipality 30. Buses Public Transport Corporation Public Transport Corporation 31. Regulation of Hotels Municipality Municipality 32. Regulation of Other Municipality Municipality Public Places 33. Professional Licenses Municipality Municipality 34. Aid to the Poor Municipality and Private Municipality and Private Groups, Awkaf Groups, Awkaf 35. Slum Clearance/Upgrading Municipality Municipality 36. Administration of Municipality Municipality Municipality's Property 37. Weights and Measures Ministry of Industry and Ministry of Industry and Trades Trades 38. Employment Offices Ministry of Labor and Ministry of Labor and Social Affairs Social Affairs Source: A modified version of the Table found in Peat, Marwick, Mitchell and Co., Municipality of Amman, Hashemite Kingdom of Jordan, Organization and Financial Study. Vol.2, Overall Organization Appraisal, Appendix II, pp. 1-2 November 30, 1978) * Smaller municipalities are responsible for financing one half the investment cost of these facilities. The relevant central government ministry furnishes the rest of the investment cost and supports recurrent cost.  -84 - ANNEX I JORDAN-URBAN SECTOR REVIEW Table 3.2: JORDAN: SOURCES OF FUNDS AND USES BY THE CENTRAL GOVERNMENT, 1976-1985 (In millions of current Jordanian dinars) Actual Estimate Total Budget Estimate Total 1976 1977 1978 1979 1980 1976-1980 1981 1982 1983 1984 1985 1981-1985 1 2 3 4 5 6 7 8 9 10 11 12 A - Available resources 1. Domestic revenues 107.6 142.3 158.4 187.9 224.5 820.7 260 323 387 464 557 1991 2. Grants 66.2 122.2 81.7 212.9 214.9 697.9 244 244 244 244 244 1220 3. Current reveoues (1+2) 173.8 264.5 240.1 400.8 439.4 1518.6 504 567 631 708 801 3211 4. Current expenditures 83.0 101.0 110.6 190.0 186.0 670.6 - - - - - - 5. Security and Defence 102.9 94.5 102.3 132.4 139.7 571.8 - - - - - - 6. Total current expenditures (4+5) 185.9 195.5 212.9 322.4 325.7 1242.4 363 408 459 505 555 2290 7. Surplus on current account (6-3) 12.1 69.0 27.2 78.4 113.7 276.2 141 159 172 203 246 921 8. Foreign loans and Technical Assistance 32.8 67.2 113.1 83.0 74.8 370.9 107 151 215 293 396 1162 9. Government bonds 11.0 12.0 19.0 11.0 2.0 73.0 27 33 38 30 22 150 10. Borrowing from the Banking System 44.9 -5.9 -10.7 21.6 -16.7 33.2 - - - - - - 11. Total revenues (7) to (10) 76.6 142.3 148.6 194.0 191.8 753.3 275 343 425 526 664 2233 B. Uses of Resources 12. Capital expenditures 76.6 142.3 148.6 194.0 191.8 753.3 275 343 425 526 664 2233 of which: 13. Investment 47.6 100.5 79.3 151.7 151.8 530.9 195 254 319 409 523 1700 14. Other capital expenditures 29.0 41.8 69.3 42.3 40.0 188.2 80 89 106 117 141 533 of which: - Ordinary (6.0) (7.0) (8.0) (9.0) (10.0) (40.0) (10) (11) (12) (13) (14) (60) - Repayment of foreign loans (9.2) (13.3) (17.3) (5.5) (10.0) (55.3) (20) (18) (21) (20) (19) (98) - Repayment of internal loans (-) (3.0) (2.0) (6.1) (5.0) (66.1) (10) (10) (10) (10) (10) (50) - Loans to private sector (13.8) (18.5) (42.0) 21.7) (15.0) (76.8) (40) (50) (63) (74) (98) (325) Source: National Planning Council.  - 85 - ANNEX I JORDAN-URBAN SECTOR REVIEW Table 3.3: SUMMARY OF MUNICIPAL REVENUES AND EXPENDITURES, 1976-1980 ACTUAL, 1981-1985 FORECAST (current JD million) Actuals Draft Plan Forecasts 1976-1980 1981-1985 5 Year 5 Year 1976 1977 1978 1979 1980 Total 1981 1982 1983 1984 1985 Total Total Municipal Revenues 12.52 13.32 16.60 24.15 40.43 107.02 52.19 Ordinary revenues 6.59 8.86 11.73 15.32 23.85 66.35 31.24 28 33 40 48 180.0 Collected by central govt. (2.67) (3.19) (5.17) (6.60) Land and building taxes - 1.24 1.83 1.83 Fuel tax - 1.71 2.94 2.95 Other - .24 .40 1.82 Collected by municipalities (3.92) (5.67) (6.56) (8.72) Fees from obligations, rentals 0.94 0.23 0.26 0.37 Direct fees 1.27 3.42 4.10 4.95 Water and electricity 0.80 1.32 1.48 2.49 Interest 0.06 0.10 0.13 0.11 Miscellaneous 0.85 0.60 0.59 1.16 (Unreconciled error) (.36) Grants 3.13 2.35 2.53 3.16 7.26 6.84 32.6 Loans 2.80 2.11 2.34 5.66 9.32 14.11 General Expenditures 8.82 16.26 15.81 22.96 42.67 106.52 55.56 NA Current 2.89 3.26 3.74 6.17 11.75 27.81 16.00 18 20 23 26 103.0 Capital 5.93 13.00 12.07 16.79 30.92 78.71 39.56 NA Ordinary (including debt service) (2.30) (7.44) (7.87) (8.41) (2.10) 28.12 (3.79) Development (3.63) (5.56) (4.20) (8.38) 28.82 50.59 35.77 31.30 35.79 33.74 33.17 169.77 a/ Surplus (Deficit) 3.70 (2.94) 0.79 1.19 (2.24) 0.50 (3.37) Excess; Ordinary revenues over current expenditures 3.70 5.60 7.99 9.15 12.1 38.5 15 10 13 17 22 77.0 Source: National Planning Council. a/ Development expenditures of Amman and of Municipalities (excluding JD 17 million for villages, and JD 4.25 million for environmental investments, which are included in Annex I, Table 1.6 and Table 3.6). b/ 1981 figures are actuals. Other years apply plan growth rate forecasts.  ANNEX I - 86 - JORDAN-URBAN SECTOR REVIEW Table 3.4: SUMMARY OF AMMAN MUNICIPALITY REVENUES AND EXPENDITURES, 1976-1980 ACTUAL, 1981-1985 FORECAST (current JD million) Actuals Draft Plan Forecasts b/ 1976-1980 1981-1985 5 Year 5 Year 1976 1977 1978 1979 1980 Total 1981 1982 1983 1984 1985 Total Total Muaicipal Revenues 8.02 6.27 7.23 9.78 11.86 43.16 16.8 27.7 30.7 33.4 29.5 138.1 Ordinary revenues 3.29 4.27 5.12 5.72 8.86 27.26 9.8 12.3 15.3 19.1 23.9 80.4 Collected by central govt. (1.45) (1.45) (1.80) (2.45) 3.3 Land and building taxes .85 .85 1.20 1.15 1.8 :Fuel tax .60 .60 .60 1.30 1.5 Other - - - - Collected by municipality (1.84) (2.82) (3.32) (3.27) 6.5 Fees from obligations (rentals) - - - - Direct fees 1.82 2.80 3.27 3.25 Water and electricity - - - - Enterest .02 .02 .05 .02 Miscellaneous - - - - Grants 1.93 2.00 2.11 2.00 3.00 3.00 Loans 2.80 0 0 2.06 4.00 General Expenditures 8.50 9.93 7.62 10.59 13.83 50.47 17.91 25.9 29.1 31.1 30.9 134.9 Current 1.70 2.05 1.80 3.65 3.97 13.17 5.63 6.3 7.1 7.8 8.6 35.4 Capital 6..80 .88 5.82 6.94 9.86 37.30 12.28 103.4 Ordinary (including debt service) 4.00 5.88 5.82 4.88 14.0 of which debt service (.90) (.97) (1.07) (0.68) (9.0) Other (3.10) (4.91) (4.75) (4.20) (5.0) Development -Official budget 2.80 2.00 0 2.06 6.9 10.9 14.3 14.9 15.8 62.8 -Amman additional proposals 30.5a/ Surplus (Deficit) (0.48) (3.66) (0.39) (0.81) (1.97) (7.31) 1.11 1.8 1.6 2.3 (1.4) 5.4 Excess:Ordinary revenues over current expenditures 1.59 2.22 3.32 2.07 4.89 14.09 4.17 6.0 (8.2) (11.3) (15.3) (45.0) Source: 1976-1980 and Development Expenditures 1981-1985, National Planning Council; other 1981-1985 forecasts: Amman Municipality. a/ of wlaich JD 16 million for land acquisition. NB. A financial scenario for Amman Municipality prepared in the context of the Amman Transport and Municipal Development Project indicated somewhat lower ordinary revenues and expenses than shown in this table, based on actual results for 198.2 (ordinary receipts were JD 11.4 million, total receipts and expenditures were JD 14.7 million). Nevertheless, the scenario demonstrated that with appropriate changes in taxes and judicious borrowing, Amman Municipality should be able to *indertalce an investment program somewhat in excess of that shown in the plan.  - 87 - ANNEX I JORDAN - URBAN SECTOR REVIEW Table 3.5A: ORGANIZATION CHART OF AMMAN MUNICIPALITY (OCTOBER 1981) _______ ~ ~ ~ ~ ~ ~ FLORD I Private I MAYOR I I Advisory Groups ----------------------------- ------------------------------- it Council 1. Child Welfare I I I I I i 2. Transportation | 3. Architecture I I I I | Standing Comittees 4. Geology I I I I-Finance -Procurement | |I - Tenders 1 - Estimating (Land Acquisition) I I LORD MAYOR'S | I Under Secretary I I | - Higher Committee of Master Plan I I Office I