Erbil lost Baghdad's trust but can still reach a budget deal: MP

ERBIL, Kurdistan Region – The Kurdistan Regional Government (KRG) has squandered the trust of Baghdad, but there is still time to reach an amenable budget deal, said a Kurdish member of the Iraqi parliament on Saturday who criticized the Kurdish bloc in Baghdad. 

“The problem is that no one from the KRG is willing to promise to abide by any of the agreements with Baghdad,” MP Rebwar Karim, an independent, told Rudaw’s Sangar Abdulrahman. “This has caused trust problems for the Iraqi parties and they refuse to give the KRG another deal to neglect.”

Early Thursday morning, after an all-night session, the Iraqi parliament passed the Fiscal Deficit Coverage Bill that funds salaries for civil servants in Iraq and the Kurdistan Region for the last two months of this year. The bill passed with a majority vote, despite a walk out by the Kurds. Members of the Kurdish parties left the parliamentary session after arguments with Shiite bloc members regarding the 320 billion dinar ($268 million) monthly budget share of the Kurdistan Region.

Baghdad did not pass a budget in 2020 in the political vacuum after the resignation of former prime minister Adil Abdul-Mahdi. It has instead paid its civil sector workers and sporadically sent funds to Erbil under the terms of the 2019 budget. The Fiscal Deficit Coverage Bill is meant to be a stop-gap for the final months of the year and Erbil had hoped to continue receiving its share. Baghdad, however, is demanding the KRG hand over oil and customs revenues, which it has failed to do despite previous agreements.  

“The current plan is not a bad one, it gives space for the KRG to send their delegation to Baghdad to negotiate,” said Karim. “The plan could end up to the Kurdistan Region’s benefit given neither the amount of the budget share nor the amount of oil the KRG is supposed to hand over has been decided. The KRG could end up with much more than they initially asked for.”

Karim said the KRG “will get their money,” if they send to Baghdad 250,000 barrels of oil daily and half their income from the border crossings, as was agreed this summer. “If the KRG has sent these, then tell us and we will fight with the Iraqi government.”

Low oil prices and the coronavirus pandemic have created a financial crisis that left Erbil unable to pay its civil servants without assistance from Baghdad, which also has empty pockets and has to borrow funds to make its payroll. 

The Iraqi government has not yet sent Erbil money for October salaries and Karim warned it may not if a deal is not reached. 

“The current bill cancels any other deal that was done before it, therefore unless the KRG and the Iraqi government come up with a new deal, there will be no money sent over by Baghdad,” he said, criticizing the way Kurdish representatives deal with such matters.

“They always try to leave things for the last minute, hoping they would convince the other parties under pressure,” he said. “This is not how representation is done.”