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DUHOK, Kurdistan Region - The Kurdish government's failure to pay salaries of civil servants over the past two months has wreaked havoc on the lives of public sector employees, and brought market movements in Duhok province, one of Iraq's poorest province, to a standstill.
The Kurdistan Regional Government (KRG) has failed to pay its civil servants on time and in full for several years due to the financial crisis. Public sector employees have not been paid for the months of July and August following several failed deals with Baghdad.
Rudaw's Haydar Doski toured Duhok's downtown bazaar over the weekend where shopkeepers decried that their market has been impacted by the absence of wages. They say they are forced to sell their goods and services on loan until their customers receive their salaries from the government.
Within Duhok's marketplace, the financial records of store owners and bakers are overflowing with debt that people owe to them.
People have cut back on their spending, a baker said, adding they have customers who even buy bread on credit.
“We keep lists and names. If they bring the payment, they bring it; if not, we won’t press the matter,” Shvan Mohammed, a bread seller in Duhok, explained, confirming that people do buy bread on credit.
He also noted that in addition to those buying bread on credit, "there’s a trend of people who used to buy loaves for 1,000 dinars now buying it for 500 dinars."
It's not just the bakers facing difficulties; the street markets in Duhok are also struggling. Another shopkeeper mentioned that some individuals owe amounts ranging from 10,000 to as much as 1,000,000 dinars.
In the Malta neighborhood, Duhok, there’s a shopkeeper who maintains three notebooks with a list of debtors.
“What’s purchased nowadays is essentially on credit. If the payment is not made, shops may have to close,” said shopkeeper Lawin Barwari.
“Purchasing on credit is high, around 70 percent or even more. Some people buy everything on credit. Honestly, we can’t run our own shops anymore. Even if we approach companies, they won’t provide us with materials,” Barwari explained.
According to Rudaw, the purchasing power of the people of Duhok has decreased significantly, unemployment and poverty have increased, and about 50% of the Kurdistan Region's domestic revenue comes from the province.
Azwar Suleiman stands by the apartment balcony where he and his five family members are supposed to live. He is a Peshmerga soldier, but he can't move in because he can't pay the installments.
“I was told by the project implementing company, ‘If you don’t pay $30,000, you won’t reside here. I cannot pay my installments. If they had lightened them, I could have managed. The company is ungrateful, and the poor must wait for their salaries. What should we spend the Peshmerga salaries on? Fees? Electricity?’” Suleiman lamented.
The KRG Council of Ministers on Wednesday called on Baghdad to pay Erbil’s financial entitlements according to figures previously agreed upon in order for salaries to be paid uninterrupted.
Meetings between delegations from the KRG and the Iraqi federal government have been ongoing over the past months, aimed at resolving lingering disputes over the Region’s share in the federal budget.
On Wednesday, Iraq’s finance ministry announced it will sign a “loan agreement” with the KRG to pay the salaries of its employees, saying that Erbil will receive its dues once it complies with its obligations within the budget.
Iraq passed its highly contentious budget bill for the years 2023, 2024, and 2025 in June, which includes a record $152 billion in spending, of which the Kurdistan Region’s share is 12.6.
The Kurdistan Regional Government (KRG) has failed to pay its civil servants on time and in full for several years due to the financial crisis. Public sector employees have not been paid for the months of July and August following several failed deals with Baghdad.
Rudaw's Haydar Doski toured Duhok's downtown bazaar over the weekend where shopkeepers decried that their market has been impacted by the absence of wages. They say they are forced to sell their goods and services on loan until their customers receive their salaries from the government.
Within Duhok's marketplace, the financial records of store owners and bakers are overflowing with debt that people owe to them.
People have cut back on their spending, a baker said, adding they have customers who even buy bread on credit.
“We keep lists and names. If they bring the payment, they bring it; if not, we won’t press the matter,” Shvan Mohammed, a bread seller in Duhok, explained, confirming that people do buy bread on credit.
He also noted that in addition to those buying bread on credit, "there’s a trend of people who used to buy loaves for 1,000 dinars now buying it for 500 dinars."
It's not just the bakers facing difficulties; the street markets in Duhok are also struggling. Another shopkeeper mentioned that some individuals owe amounts ranging from 10,000 to as much as 1,000,000 dinars.
In the Malta neighborhood, Duhok, there’s a shopkeeper who maintains three notebooks with a list of debtors.
“What’s purchased nowadays is essentially on credit. If the payment is not made, shops may have to close,” said shopkeeper Lawin Barwari.
“Purchasing on credit is high, around 70 percent or even more. Some people buy everything on credit. Honestly, we can’t run our own shops anymore. Even if we approach companies, they won’t provide us with materials,” Barwari explained.
According to Rudaw, the purchasing power of the people of Duhok has decreased significantly, unemployment and poverty have increased, and about 50% of the Kurdistan Region's domestic revenue comes from the province.
Azwar Suleiman stands by the apartment balcony where he and his five family members are supposed to live. He is a Peshmerga soldier, but he can't move in because he can't pay the installments.
“I was told by the project implementing company, ‘If you don’t pay $30,000, you won’t reside here. I cannot pay my installments. If they had lightened them, I could have managed. The company is ungrateful, and the poor must wait for their salaries. What should we spend the Peshmerga salaries on? Fees? Electricity?’” Suleiman lamented.
The KRG Council of Ministers on Wednesday called on Baghdad to pay Erbil’s financial entitlements according to figures previously agreed upon in order for salaries to be paid uninterrupted.
Meetings between delegations from the KRG and the Iraqi federal government have been ongoing over the past months, aimed at resolving lingering disputes over the Region’s share in the federal budget.
On Wednesday, Iraq’s finance ministry announced it will sign a “loan agreement” with the KRG to pay the salaries of its employees, saying that Erbil will receive its dues once it complies with its obligations within the budget.
Iraq passed its highly contentious budget bill for the years 2023, 2024, and 2025 in June, which includes a record $152 billion in spending, of which the Kurdistan Region’s share is 12.6.
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