ERBIL, Kurdistan Region — The Kurdistan Regional Government (KRG) is optimistic as it waits for Baghdad to begin implementing the 2021 budget that was passed by the parliament this week after months of tense negotiations, the spokesperson for Deputy Prime Minister Qubad Talabani said on Saturday.
“We are optimistically waiting for the president of the republic to sign” it into law, Samir Hawrami told Rudaw’s Snwr Majid on Saturday, adding that the government is ready to meet its obligations as the bill comes into effect retroactively.
“Whatever commitments there are for the past four months on the KRG, we have shown readiness to meet them … and in return whatever financial gap there is on the KRG’s shoulders for the past four months, they should pay it back to the Kurdistan Region,” he said.
The budget bill, approved by the Iraqi Council of Ministers in December, took more than three months to be passed by Iraq’s parliament. It was finally put to a vote on March 31. Under the law, the Kurdistan Region will hand over revenues of no less than 250,000 barrels of oil per day at state-regulated prices to Baghdad in exchange for federal funds.
Hawrami said “a technical delegation” may need to go back to Baghdad for the law’s implementation, adding that the negotiating team, led by Talabani, visited Baghdad about “ten times” to resolve budget disputes.
“If I’m speaking optimistically, we are waiting for the Iraqi government to [send the Kurdistan Region’s share of the budget] as an experiment this month to see how much the KRG will receive,” said Hawrami.
Deputy speaker of the Iraqi parliament Bashir al-Haddad had told Rudaw’s Halkawt Aziz that the Kurdistan Region’s share was allocated at 12.67 percent of the budget.
If the funds, added to the rest of the KRG’s revenues, add up to 895 billion dinars ($615 million), then the government will be able to pay its employees in full, “salaries will 100 percent be distributed without any cuts," said Hawrami.
The KRG has struggled to pay its public sector employees on time and in full for months because of an economic crisis brought about by low oil prices and budget disputes with Baghdad. Asked if cuts to pay cheques from the past four months will be returned to civil servants, Hawrami said that will be decided after the government calculates its revenues.
The KRG also has to make repayments on a loan it took out from the Trade Bank of Iraq. It owes around 5 trillion dinars. An item in the budget dictates payments of “around 50 billion dinars monthly” over seven years, said Hawrami.
He added that the 2021 budget is expected to be carried over into 2022 since elections are scheduled for October so “it’s hard to prepare another budget bill again,” while a new government is formed.
