Kurdish MPs in Baghdad storm out of parliament session over oil-for-budget dispute

ERBIL, Kurdistan Region — Kurdish MPs stormed out of an Iraqi parliament session on a fiscal debt bill passed this morning, over requirements for the Kurdistan Region to hand over an unspecified amount of oil revenue to Baghdad in return for its monthly share of the federal budget. 

The Iraqi parliament met on Wednesday afternoon to discuss the Fiscal Deficit Coverage Bill, which was set to decide the fate of Iraqi civil servant salaries, in addition to salaries of the Kurdistan Region employees for the last two months of the year.  The session ended at 6am on Thursday, with the bill passed by a majority vote. 

Baghdad will now borrow 12 trillion Iraqi dinars (10 billion USD) from the central bank in an attempt to cover the fiscal deficit and pay civil sector employees. Initially, Kadhimi had asked the finance committee for 30 trillion dinars ($25 billion USD) – seen as a “waste of money” by some MPs.

Members of the Kurdish parties decided to leave the parliamentary session after arguments with Shiite bloc members regarding the 320 billion dinar ($268 million) monthly budget share of the Kurdistan Region. 

“The Shiite bloc and the parliament speaker told us to attend the meeting and they will delay voting on that section concerning the Kurdistan Region,” Viyan Sabri told Rudaw’s Nalin Hassan on Wednesday. 

“However when we accepted and entered the meeting, they disregarded their own statement.”

According to the legislation passed, the Kurdistan Region will have to send monthly oil income to Baghdad, the amount of which will be decided between the Kurdistan Regional Government (KRG) and the State Organization for Marketing of Oil (SOMO) in return for the Region’s share of the federal budget -  which Kurdish MPs say was not part of the original bill. 

“[ Committee] members of Al-Sadiqoun Bloc [Asaib Ahl al-Haq], Sairoon Alliance, and State of Law Coalition told the parliament’s finance committee that they would not agree on a single dinar being sent over to Kurdistan Region if the KRG does not deliver oil revenue,” said Ahmed Haji Rashid, a member of the parliament’s finance committee.

Control of oil revenues has long been a thorny issue between Erbil and Baghdad. The KRG has operated an independent oil and gas sector since 2006 and later began exporting its oil to the international market via a pipeline through Turkey – angering Baghdad, who then cut Erbil’s budget share to zero. 

The KRG has struggled to pay civil servant salaries on time and in full for five years, due to an economic crisis, the war against the Islamic State (ISIS) and a drop in oil prices

Kurdish officials have openly said they cannot pay civil servants without money from the federal government. The KRG has not paid public sector employees on time and in full since Baghdad stopped sending funds in April.

Erbil says it is entitled to its 12.67 percent share of federal funds, as stipulated by Iraq’s 2019 budget law, while Baghdad says the KRG has not lived up to its end of the deal that includes turning over 250,000 barrels of oil daily SOMO.

Erbil and Baghdad have continued to bicker over various versions of the oil-for-budget agreement, with the KRG receiving a share of the 2019 federal budget yet failing to hand over a single barrel of oil.