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Iraqi parliament fails once again to vote on federal budget

Iraqi parliament failed once again to vote on the 2021 federal budget bill due to continuing disagreements over its contents and demands by some blocs to change the dollar exchange rate and include foreign loans, state media reported on Sunday night.

Parliament’s finance committee held intensive meetings with speaker Mohammed al-Halbousi and with political blocs, but no session was held due to failure to meet quorum.

Fatih bloc deputy Abdul Amir al-Mayahi told state media outlet INA that the disputes over the budget are related in part to the dollar exchange rate. Finance committee member Ahmed al-Saffar told state media that there are political blocs pushing to change the devalued dollar-dinar exchange rate.

The committee announced the addition of some paragraphs to the bill, including reinstating members of the Popular Mobilization Forces (PMF, or al Hashd al-Shaabi in Arabic) who had benen fired for various reasons.

Committee member Ekhlas al-Dulaimi confirmed that one trillion dinars (almost $686 million) had been allocated to lecturer and medical professional salary payments.

Jasim al-Bakhati, deputy of the Iraqion Alliance, said that some forces are calling for the addition of an article about foreign loans in the budget.

“The Region’s share in the budget is no longer the problem, as there are big blocs trying to add an article concerning borrowing an amount of one billion dollars for the benefit of the Ministry of Electricity for development purposes,” Bakhati said.

A new amendment to Article 11 of the bill regarding the Kurdistan Region’s share would require the Kurdistan Regional Government (KRG) to hand over 250,000 barrels of oil a day or their equivalent value to Baghdad, in addition to 50 percent of non-oil revenues like custom fees and taxes, according to Ahmed al-Saffar, a member of parliament’s finance committee. Shiite parties had previously amended the article to require all of the Kurdistan Region’s non-oil revenues.

“The Region’s share in the budget is no longer the problem, as there are big blocs trying to add an article concerning borrowing an amount of one billion dollars for the benefit of the Ministry of Electricity for development purposes,” Bakhati said.

For years, Iraqi lawmakers have criticized the Kurdistan Region’s independent oil sales. Many lawmakers want Erbil to hand over all of its oil to the State Organization for Marketing Oil (SOMO) in exchange for federal funds.

Both governments have also seen revenues drop due to low oil prices last year. The KRG is unable to pay its civil servants on time and in full, while the Iraqi government borrowed over $25 billion from the country’s central bank to pay salaries for the last three months of 2020. Baghdad also devalued the dinar in December, in part due to revenue lost in the global oil price collapse.