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ERBIL, Kurdistan Region – The Kurdistan Regional Government (KRG) delegation in Baghdad negotiating its share of next year’s federal budget showed an unprecedented willingness to strike a deal, members of Iraqi parliament’s finance committee have told Rudaw, as the budget’s details continue to be fleshed out in delegation meetings.
Federal government representatives met in Baghdad with a Kurdish delegation made up some three dozen officials from the finance, oil, planning, accounting and government on Monday.
A six-hour meeting with the Kurdish delegation on Monday concluded with the agreement of a 2020 national budget share of 12.67 percent for the KRG. In return, 250,000 barrels of oil per day from the Kurdistan Region’s oil fields is to be handed over to Baghdad and exported from the Turkish port of Ceyhan.
The deal between the Kurds and Baghdad was accepted by the Council of Ministers, and is expected to reach the parliament floor on Sunday for final approval.
The KRG on Tuesday released a statement on the concluded agreement, expressing hope for its implementation as is.
“The delegation said that the Kurdistan Regional Government has concluded an agreement on the 2020 budget bill with Iraqi ministry of finance. This is the first time the Kurdistan Regional Government has taken part in the first phase of preparing Iraqi federal budget draft,” it read.
“The Kurdistan Regional Government hopes that the deal is implemented as it is, and we call on Kurdistani blocs and other blocs at Iraqi parliament to help ensure and protect Kurdistan Region’s financial rights in the next phase of the budget draft.”
Tuesday’s talks also sought to hammer out the budget deal’s finer details. Sherwan Mirza, a Kurdish member of Iraqi parliament’s finance committee, told Rudaw on Tuesday that Baghdad would pay the transportation fee for the 250,000 bpd the KRG hands over.
The federal government in Baghdad and regional government in Erbil have been at loggerheads for years over national budget allocation and oil revenue. The KRG has faced fierce criticism from opposition parties such as the Change Movement (Gorran), and the two main Islamic parties in the Kurdistan Region over the lack of transparency in its oil sector.
This changed when the Region’s two ruling parties, the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK), reached an agreement with Gorran and other smaller parties in July to form a unity government.
Gorran officials said upon joining the government they had received strong commitments from Prime Minister Masrour Barzani that he would usher in an era of transparency. Since then, Barzani has proactively emphasized the importance of fighting government corruption.
Ahmad Haji Rashid is a Kurdish member of Iraqi parliament from the Kurdistan Islamic Group, known as Komal in Kurdish. He believes the KRG has shown a shift towards greater transparency about oil revenue.
“The Kurds have agreed to hand over their oil contracts to the federal government, the KRG has agreed for Iraq to pass on its accounts to an [international] auditing company so they understand how much it costs for a barrel of oil to be extracted from the ground,” Haji Rashid told Rudaw’s Hiwa Jamal.
Despite the near-two month delay on the bill’s introduction to parliament, Haji Rashid is optimistic the bill will pass next week without any serious challenges.
“The [KRG] negotiators expressed full readiness to provide anything in pursuit of transparency whether we request it or the federal government requests,” Ahmad Haji Rashid told Rudaw on Monday night, having been briefed in Baghdad earlier that day by the KRG delegation.
“This is heartwarming , this is the first time the [KRG] finance ministry and the KRG have expressed such a readiness to discuss the issue…and we said as long as the [Kurdish] side is transparent we will defend the Kurdish position fully but we will not defend an issue that is not transparent.”
Budget allocation for Peshmerga salaries is set to increase, and their payment will be decentralized.
“The Peshmerga share will increase to much more than 68 billion dinars and will no longer be paid as part of the Iraqi defense ministry but as part of the salaries of civil servants,” Mirza said.
Total budget figures have yet to be set in stone, but the estimate for the 2020 budget currently stands at 162 trillion dinars ($135 billion), according to Ahmad Haji Rashid of the parliament finance committee in Baghdad. “Out of this, 112 to 114 trillion is made up of revenue, and we have a 48 trillion shortfall,” Haji Rashid told Rudaw on Monday night.
Although Iraq’s main source of revenue is oil, a fraction comes from taxing the imports that pour into the country from around a dozen land border crossings with its neighbors.
The deal’s finer details at provincial level have yet to be hammered out. Among those details is the percentage of revenue that border provinces would receive from customs duties, and how much petrodollar would be allocated to provinces where oilfields are located. According to Mirza, the Kurdistan Region provinces are to receive a “good share” from the budget.
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