Iraq's Council of Ministers approves 2021 budget bill

ERBIL, Kurdistan Region — Iraq's Council of Ministers voted to approve the Federal Budget Bill for 2021 in a meeting led by Iraqi prime minister Mustafa al-Kadhimi on Monday night, Kadhimi's office has announced.

Controversy was sparked when a draft version of the bill leaked last week said that there would be a cut in the salaries of Iraqi civil sector employees, but Iraqi state media reported that Kadhimi had rejected that section of the bill on Sunday.

"The budget bill does not affect the salaries of employees that make up the majority of Iraqi people," Kadhimi said at a press conference soon after the vote. "The targets of this bill are people in higher positions."

"The budget bill includes taxes on senior employees, and protection of employees with low or medium wages," he said. "The bill includes reforms in many fields, and supports industries and agriculture."

"People with a wage of less than 500,000 dinars have not received any cuts, and people with one million dinar wages will only receive a symbolic cut," he said.

"The three presidencies will receive a 40 percent cut in their salaries, and all MPs and ministers will receive a 30 percent cut," labor minister Adel al-Rikabi told press conference attendees.

The bill has received the approval of "the different political parties," Kadhimi added.

Iraq has had an economically woeful 2020, thanks in part to a global crash in the price of oil and the coronavirus pandemic. The country will have a 58 trillion dinar (approximately $40 billion, according to current exchange rates) deficit in 2021, according to the leaked draft of the bill.

The bill's approval comes amid the devaluation of the Iraqi dinar by the government on Saturday in a bid to ease the country's liquidity crisis.

On Monday protesters took to Tahrir Square, an epicenter for anti-government protests since October 2019, to voice their disapproval of the devaluation.

Kadhimi told the press conference that Turkey will be providing Iraq with financial assistance to further ease the country's economic woes.

Kadhimi and foreign minister Fuad Hussein visited Turkey last week, but no reference to financial assistance from Ankara was made in the joint press conference between the Iraqi premier and Turkish president Recep Tayyip Erdogan.

"The Turkish government is willing to help Iraq with $5 billion," Kadhimi said.

On the continuing budget dispute between Erbil and Baghdad, Kadhimi said "we are working on resolving our issue with the [Kurdistan] Region soon, God willing," adding that Kurds are also people of Iraq. "We will reach a deal."

Within minutes of the bill's approval by the Council of Ministers, Iraqi Twitter users had the hashtag "Reject_Kadhimi's_BudgetBill" trending.

Updated at 11:09 am on December 22, 2020