The statement said that the “Iraqi finance ministry has once again delayed the sending of the 200 billion dinars that was used as an advance payment to complete the distribution of employees’ salaries.”
According to the statement, Baghdad did not sent that amount to Erbil in January either, slowing down the process of salary distribution, pushing the KRG to use its oil revenue from February to continue the salary distribution process.
Baghdad sent a first payment of 200 billion dinars to the KRG in July. These payments are an advance on Erbil’s share of federal budget.
The region has relied on Baghdad sending the amount in order to be able to pay salaries in full.
Erbil struggled to pay civil servant salaries in full and on time for more than five years, due to the war against the Islamic State (ISIS), disputes with Baghdad, and a drop in oil prices. With a shortage of cash, the government took temporary austerity measures to reduce salaries of higher-earning employees in June 2020. Those earning more than 300,000 Iraqi dinars per month were hit with a 21 percent pay cut.
Iraq’s federal budget was passed by the parliament in late March after intense debates and more than three months after it was approved by the cabinet. One contentious point was Erbil’s share and requirements for the KRG to hand over oil. The Kurdistan Region receiving its share is conditional on Erbil fulfilling its commitments, which include handing over 250,000 barrels of oil per day, paying back money it borrowed from the Iraqi Trade Bank, sending non-oil revenues and prioritizing paying the salaries of its civil servants and Peshmerga before any other spending.
However, on Tuesday, the Iraqi Federal court deemed the region’s oil and gas law unconstitutional, after reviewing cases brought against Erbil in 2012 and 2019.
The KRG responded to the decision late Tuesday, saying that the court’s ruling is not only “unconstitutional” but also “unjust.”
Kurdistan Democratic Party (KDP) leader Masoud Barzani, who himself played a key role in drafting the 2005 Iraqi constitution, said that the decision was political, and Kurdistan Region President Nechirvan Barzani said early Wednesday that the court’s decision could further complicate the disputes between the two capitals.
Iraq’s Sunni alliance on Wednesday said that the decision of the federal court against the Kurdistan Region’s oil and gas industry would complicate efforts made to resolve existing issues, calling on Erbil and Baghdad to start immediate negotiations to resolve the issue.
Iraqi Prime Minister Mustafa al-Kadhimi on Wednesday tasked the Iraqi minister of oil to negotiate with the KRG regarding the federal court’s decision.
