ERBIL, Kurdistan Region - Iraqi Kurds have acquiesced to US pressure and agreed to be part of the new government in Baghdad, but they reject a plan by Prime Minister Haider al-Abadi on how to end Baghdad’s budget blockade and move forward with Kurdish oil exports.
For the Kurdistan Regional Government (KRG), without whose participation there can be no inclusive Iraqi government, the agreement is conditional on key issues getting resolved in the next weeks and months.
A statement from the KRG Ministry of Natural Resources late Tuesday underscored that the KRG required the new government to form “a committee headed by the Federal Prime Minister and the KRG Prime Minister to tackle the mechanisms for sending the KRG’s share of the budget within one week of government formation.”
The Kurdistan Region claims it is owed nearly $8 billion for a period stretching back to January, when the then prime minister Nouri al-Maliki ordered an end to monthly payment transfers to the autonomous Erbil government, after it announced independent oil exports that Baghdad calls “illegal.”
With this committee set to meet next week, the statement added that payments of financial dues must “commence” this month, leaving space for the parties to decide on payment in full or installments.
"The Iraqi government claims they don’t have the full amount of money,” said Arez Abdulla, a Kurdish MP in the Iraqi parliament. “I believe they will send the Kurdish budget twice every month before we reach an agreement on Kurdish oil exportation."
But fellow Kurdish MP Najeeba Najeeb insisted that Baghdad is using the budget to pressure the Kurds into an oil deal.
“Iraq has enough money in the bank to pay us now -- they have been saving on our share all these months,” she told Rudaw. “They want to talk about the oil issue before sending us our budget share because they want to make sure we agree to export oil through SOMO,” the state-owned oil marketing company.
Resolving how Kurdish oil should be exported and marketed is a thorny issue. While Abadi’s plan allows for six months for a deal, the KRG says it must be resolved in three.
The Kurds reacted against a perceived ambiguity in Abadi’s proposal, writing that “all the pending issues regarding oil and gas” must be solved, no matter what. The Kurds objected to a provision that a solution must be “based on the Constitution,” fearful it might lead to an impasse: Baghdad and Erbil have had drastically different interpretations of the Constitution in the past, which has led to the current standoff.
In a further departure from Abadi’s proposal, the KRG does not specifically require that the new arrangement be enshrined in a new oil and gas law. Such a law has been notoriously difficult to pass in the past and could delay any agreement indefinitely. Nor did the KRG agree to “immediately deliver a portion of its oil production to be exported via the Federal Ministry of Oil,” in exchange for an advance on oil revenues.
But there are some significant signs of progress and hope for cooperation in Abadi’s plan that the Kurdish bloc has welcomed. Abadi calls for a peaceful solution to territorial disputes mentioned in the Iraqi Constitution’s Article 140, the highly politicized law calling for normalization, census, and referendum in Kirkuk and other disputed lands.
His proposal also mentions the arming and training of the Peshmerga forces as a National Guard Force under the umbrella of the national defense system, something that the Kurds have called for since 2005. He has bugun work on this front already: in the first cabinet session on Tuesday, Abadi asked that a draft law for National Guard troops be established in the next two weeks.
If Kurdish demands are not met within the next weeks and months, it is not clear how the Kurdish bloc would react. The KRG statement did not specifically threaten to withdraw from the government.
"If no commitment is shown… the Kurdistan Region leadership will make its decision accordingly,” it said.
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