ERBIL, Kurdistan Region — The 2021 budget proposal will provide “transparency” and “equality”, for people in the Kurdistan Region, a Kurdistan Regional Government (KRG) spokesperson said following a Council of Ministers meeting on Thursday – the first time in seven years that they have met to discuss a budget.
During a meeting led by Kurdistan Region Prime Minister Masrour Barzani, the council took the first steps toward preparing a budget bill for 2021.
The Ministers of Finance and Planning both submitted reports on the bill and the required steps forward, according to a statement released by the KRG.
“The KRG believes that this bill is not only to know the Region’s revenue and expenses, but also to provide transparency, equality for the people,” government spokesperson Jotiar Adil said in a post-meeting press conference.
There were no specific details released about the budget proposal.
Erbil has been heavily reliant on its federal budget share from Baghdad to pay its civil servants and undertake service projects since 2003. In 2014, Baghdad stopped sending the funds fully and on time after oil prices fell, war broke out with the Islamic State (ISIS), and relations between the federal and regional governments soured over Erbil’s decision to export its oil independently.
Relations between Erbil and Baghdad have been particularly strained in recent months amid disputes over Erbil’s share of the budget.
After political turmoil, record low oil prices, and the coronavirus pandemic, Baghdad failed to pass a budget for 2020. In November, Iraqi lawmakers passed the Fiscal Deficit Coverage Bill approving loans to cover civil servant salaries in Iraq and the Kurdistan Region for the last two months of the year. The bill passed with a majority vote, despite a walkout staged by Kurdish MPs, angered that Erbil is obliged to hand over an unspecified amount of oil in exchange for funds – a clause they said was not in the original bill.
A KRG delegation led by Deputy PM Qubad Talabani arrived at Baghdad at the beginning of December to resolve the issue.
On December 22, Talabani announced Erbil and Baghdad had reached a deal on Iraq’s Federal Budget Bill for 2021 that “keeps the common interest of all Iraqi people, including the people of Kurdistan Region.”
The 2021 Iraqi budget bill was approved by Iraq’s Council of Ministers on December 21, and is set to be read by parliament this month.
According to a member of the Iraqi parliament’s finance committee, the country faces a $71 trillion dinar deficit this year.
In a Thursday interview with Rudaw’s Sangar Abdulrahman, the KRG’s Deputy Minister of Planning Zagros Fatah said the Kurdistan Region’s budget depends on how the agreement with Baghdad is implemented.
“If the Iraqi parliament approves the Iraqi budget bill the way we have agreed and with the terms we have set for our share, then our share of the federal government’s budget will be our main source of income, based on which we will prepare the budget bill,” he said.
“However if like previous years, the federal government refuses to send our share of the budget, we will have to take other measures such as using our border crossing revenue, the revenue of our non-oil products, and selling our oil to set a base for the bill.”
He also said, “this will be the first time oil revenue will be included in the Region’s budget, because we only started selling oil in 2014, and through this, every citizen of Kurdistan will be able to see transparent oil revenue.”
