IRAQI GOVERNMENT TO BORROW $12 BILLION IN EXTERNAL LOANS TO FINANCE ITS DEFICITS: MP
Member of the Council of Representatives’ Finance Committee Ahmad Haji Rashid said on Wednesday (November 11) that the Iraqi Government will borrow $12 billion from foreign banks to finance its salary distributions to public sector workers for October, November and December.
In an interview with NRT Tawtwe interview program, Haji Rashid said that Iraq will face economic collapse if its external loans exceed by $31 billion.
Iraq faces a serious financial shortfall due decline in oil prices marred by the coronavirus pandemic and endemic mismanagement and corruption the country has faced since the fall of the former Ba’ath regime, as the country almost exclusively counts on oil exports to finance its salary payroll and other expenditures.
The federal government has been falling behind in paying civil servants on time since September.
“If the federal legislature approves the Fiscal Deficit Financing Law, the federal government will start paying salary on Saturday,” he said, stating there is “A danger on the transfer of the [Kurdistan] Region’s 320 billion Iraqi dinars [monthly funding].”
In April, Baghdad lost patience with the Kurdistan Regional Government (KRG) refusal over the previous fifteen months to abide by the terms of the federal budget law and stopped all budget transfers to Erbil. Compounded by a precipitous drop in global oil prices, the KRG was unable to pay its hundreds of thousands of public sector workers and delayed disbursements repeatedly.
KRG Premier Masrour Barzani announced in August that his federal counterpart Kadhimi promised during a phone call that his cabinet would send salary for August, September and October.
Since then, the federal government has decided to send $320 billion Iraqi dinars to the Region for salary payments on condition that the KRG abides by its commitments to the federal government.
“The Shias [caucuses] are against the transferring of the money to the [Kurdistan] Region and the Sunnis [caucuses] do not support us,” he said. “Regarding the draft loan law The [Kurdistan] Regional Government [KRG] has shammed us and [Iraqi Prime Minister Mustafa Kadhimi against the Iraqi people and political parties.”
He also said that the Sunni and Shia blocs had said the KRG had not implemented any commitment to Baghdad. “That is why they do not show flexibility,” he said.
“Surely, if the Region does not abide by its commitments to Baghdad in 2021, the 320 billion Iraqi dinars will be cut off.”
(NRT Digital Media)