Baghdad, Erbil war of words continues over oil-for-budget dispute
ERBIL, Kurdistan Region – Finger pointing over who is responsible for civil servants in the Kurdistan Region’s salary payment delay continued Wednesday between the regional government (KRG) and federal Iraq, as employees go without five months of payment.
Iraq’s finance ministry released a statement Wednesday blaming the KRG for the continued delay in sending the salaries of public servants from Baghdad, and claiming that the ministry has received tens of thousands of requests from KRG public employees suggesting their salaries be rerouted directly to them.
“The federal government has, since the beginning of the dialogue, cared for the rights of the citizens of the Kurdistan Region of Iraq, and ensured their salaries are secured, especially after it became clear that the financial payments sent to the Ministry of Finance of the Region [KRG] did not reach all of those who deserve it,” the statement reads.
The ministry added that they have received “requests signed by tens of thousands of the Region’s [KRG] employees to link their salaries [to them] through banking mechanisms,” rather than to the Regional government first.
Iraq and the KRG have held several rounds of talks to negotiate a solution to the oil dispute, with delegations visiting each other in Erbil and Baghdad over the last several months, but the two sides are yet to come to an agreement.
Iraq’s latest assertions come after the KRG released a strongly-worded statement on Wednesday, accusing the federal government of negotiating the dispute in bad faith and prolonging the payment of salaries.
“While the KRG has not left any constitutional, legal or financial barriers to reaching an agreement with the federal government to provide salaries and financial rights of KRG employees…the federal government has not been willing to send any amount of money for the past three months,” KRG statement reads, adding that the Kurdistan Region has the right to receive salaries from Baghdad like every other part of the country.
“The KRG Council of Ministers expresses its concern and dissatisfaction with the negative attitude of the federal government and calls on Baghdad to resolve the issues on the basis of the constitution and to respect the constitutional rights and dignity of the KRG,” the statement added.
The Iraqi Finance Ministry calls on KRG to return to the “dialogue table” for the sake of the public interests, saying their latest statement lacked the “required precision” in articulating the dispute origins.
Iraq’s 2019 budget law stipulates that the Kurdistan Region is entitled to a 12.67% share of the budget in exchange for turning over 250,000 barrels per day from its oil production to Iraq’s State Organization for the Marketing of Oil (SOMO).
However, KRG has not sent any oil to SOMO, prompting Baghdad to suspend the federal government’s budget payments to the KRG in April, delaying the salaries of thousands of public employees.
Baghdad is now not only demanding the KRG pay in oil, but requiring border crossings in Kurdistan Region be run jointly by Baghdad and Erbil, with half of the revenue going to the central government.
Demonstrations erupted in Sulaimani province on Wednesday by public employees over the delay of their salaries. The demonstrators demanded their delayed salaries, and called on the KRG’s current cabinet to resign.
Apart from Baghdad refusing to send the salaries of the public employees in Kurdistan region, KRG’s inability to pay public salaries is also due to the COVID-19 pandemic and the drop in oil prices.
In order to cope with the economic crisis, the KRG slashed each ministry’s share of money to pay salaries by 21 percent. February’s paychecks were distributed in July. The KRG warned it may reduce payments even further if it fails to collect enough money to pay March salaries.
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.
Years of tensions over the independent oil sales came to a head in 2014 when then-Prime Minister of Iraq Nouri al-Maliki suspended the Kurdistan Region’s share of the federal budget – leaving hundreds of thousands of public sector employees with unpaid salaries.
That same year, the Kurdish Peshmerga took control of security in the disputed territory of Kirkuk, allowing the KRG to also seize control of the province’s bountiful oilfields.
When Iraqi forces retook the area in October 2017, the KRG lost around half of its oil revenues, compelling the government to suspend exports via Turkey for several months.
Iraq’s finance ministry released a statement Wednesday blaming the KRG for the continued delay in sending the salaries of public servants from Baghdad, and claiming that the ministry has received tens of thousands of requests from KRG public employees suggesting their salaries be rerouted directly to them.
“The federal government has, since the beginning of the dialogue, cared for the rights of the citizens of the Kurdistan Region of Iraq, and ensured their salaries are secured, especially after it became clear that the financial payments sent to the Ministry of Finance of the Region [KRG] did not reach all of those who deserve it,” the statement reads.
The ministry added that they have received “requests signed by tens of thousands of the Region’s [KRG] employees to link their salaries [to them] through banking mechanisms,” rather than to the Regional government first.
Iraq and the KRG have held several rounds of talks to negotiate a solution to the oil dispute, with delegations visiting each other in Erbil and Baghdad over the last several months, but the two sides are yet to come to an agreement.
Iraq’s latest assertions come after the KRG released a strongly-worded statement on Wednesday, accusing the federal government of negotiating the dispute in bad faith and prolonging the payment of salaries.
“While the KRG has not left any constitutional, legal or financial barriers to reaching an agreement with the federal government to provide salaries and financial rights of KRG employees…the federal government has not been willing to send any amount of money for the past three months,” KRG statement reads, adding that the Kurdistan Region has the right to receive salaries from Baghdad like every other part of the country.
“The KRG Council of Ministers expresses its concern and dissatisfaction with the negative attitude of the federal government and calls on Baghdad to resolve the issues on the basis of the constitution and to respect the constitutional rights and dignity of the KRG,” the statement added.
The Iraqi Finance Ministry calls on KRG to return to the “dialogue table” for the sake of the public interests, saying their latest statement lacked the “required precision” in articulating the dispute origins.
Iraq’s 2019 budget law stipulates that the Kurdistan Region is entitled to a 12.67% share of the budget in exchange for turning over 250,000 barrels per day from its oil production to Iraq’s State Organization for the Marketing of Oil (SOMO).
However, KRG has not sent any oil to SOMO, prompting Baghdad to suspend the federal government’s budget payments to the KRG in April, delaying the salaries of thousands of public employees.
Baghdad is now not only demanding the KRG pay in oil, but requiring border crossings in Kurdistan Region be run jointly by Baghdad and Erbil, with half of the revenue going to the central government.
Demonstrations erupted in Sulaimani province on Wednesday by public employees over the delay of their salaries. The demonstrators demanded their delayed salaries, and called on the KRG’s current cabinet to resign.
Apart from Baghdad refusing to send the salaries of the public employees in Kurdistan region, KRG’s inability to pay public salaries is also due to the COVID-19 pandemic and the drop in oil prices.
In order to cope with the economic crisis, the KRG slashed each ministry’s share of money to pay salaries by 21 percent. February’s paychecks were distributed in July. The KRG warned it may reduce payments even further if it fails to collect enough money to pay March salaries.
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.
Years of tensions over the independent oil sales came to a head in 2014 when then-Prime Minister of Iraq Nouri al-Maliki suspended the Kurdistan Region’s share of the federal budget – leaving hundreds of thousands of public sector employees with unpaid salaries.
That same year, the Kurdish Peshmerga took control of security in the disputed territory of Kirkuk, allowing the KRG to also seize control of the province’s bountiful oilfields.
When Iraqi forces retook the area in October 2017, the KRG lost around half of its oil revenues, compelling the government to suspend exports via Turkey for several months.