In Rudaw 

Erbil, Baghdad have come to ‘good understanding’ on 2021 federal budget: KRG

The Kurdistan Regional Government (KRG) has come to a “good understanding” with Iraq regarding the Region’s share of the 2021 federal budget during talks this week in Baghdad, according to a statement.

KRG Prime Minister Masrour Barzani on Saturday was relayed information on the newly found consensus by his delegation responsible for negotiating with Baghdad on the dispute over the allocation of the Region’s budget, according to a statement from the premier’s office.

“Negotiations are ongoing within the framework of the principles we have already agreed upon, leading up to a final agreement,” reads the statement, stressing the KRG “will not waive its financial and constitutional rights and dues.”

The KRG will deliver 250,000 oil barrels per day (bpd) and half of its border cross revenues to Baghdad in exchange for a portion of Iraq’s annual budget for next year, according to Faisal al-Issawi, a member of Iraqi parliament’s finance committee.

“12.7% of the federal budget will be sent to the Kurdistan Region,” he told Rudaw’s Snwr Majid on Saturday.

“Kurdistan’s civil servants will be treated the same way” as those in Iraq’s other provinces, he noted, describing the agreement as the “beginning of a breakthrough” to resolve a number of remaining contentious issues between the governments, including oil contracts, debts and disputed areas.

The results of the negotiations are yet to be discussed by Iraq’s Council of Ministers and ultimately passed by Iraqi Parliament.

“This agreement is important,” Ahmed Safar, the finance committee’s chairman, told Rudaw’s Mohammed Sheikh Fatih in an interview on Saturday, “but the most important thing is reaching an ultimate political agreement,” he added.

Safar noted that the agreement might face a number of challenges from Iraqi parliament, saying that certain “voices in parliament are opposing Kadhimi’s government”, as well as are  “turning Kurdish issues into a pre-election campaign” for themselves.

He advised Kurdish factions to stay united and unanimous in their plays in Baghdad, saying the budget dispute is an issue affecting the entire Kurdish nation, and should thus not be politically contentious amongst its parties.

The KRG has failed to pay its civil servants on time or in full for months. Kurdish officials have openly said they cannot pay civil servants without money from the federal government. No progress in negotiations over the remaining unpaid months in 2020 have been mentioned.

The KRG Council of Ministers held a meeting last week and “decided to send an official letter to Iraq’s Council of Ministers demanding the Kurdistan Region’s budget share for the months of May, June, July, and October,” the KRG said in the statement.

Prime Minister Barzani sent a letter to Iraqi Prime Minister Mustafa al-Kadhimi on Saturday regarding the Region’s financial entitlements of 2020, saying “the regional government has yet to receive funds for the months of May, June, July, and October for the year 2020.”

Iraqi parliament passed a Fiscal Deficit Coverage bill in November without the participation of Kurdish MPs, who left the session over a clause obliging the Kurdistan Region to hand over an unspecified amount in oil revenues in return for a share of the budget that would pay its civil servant salaries.

Barzani condemned the way the Fiscal Deficit Bill was passed “without the consent of Kurdistani representatives in the federal parliament, is considered a violation of the principles of equity, cooperation, and consensus which the constitution is meant to safeguard.”

However he also reaffirmed KRG’s “vision for an agreement with the federal government based on the principles of the constitution.”

Provided that the federal government allocates the KRG’s entitlements, the region “remains fully prepared to fulfill its oil and financial obligations to the federal government,” he wrote.

Barzani announced at a parliament session in October that the Regional government’s debts and financial obligations amount to more than $28 billion to the Iraqi Commercial Bank, Kurdistan International Bank, and employees for their reductions to their salaries. This figure does not include the salaries owed to public servants. Source