New Iraqi funding initiative detrimental to the Kurdistan Region

ERBIL, Kurdistan Region - A new funding initiative by the current Iraqi government to ensure food security in the country could prove to be extremely disadvantageous to the Kurdistan Region, the Chairman of Iraq Advisory Council (IAC) told Rudaw English on Wednesday, given that it fails to also take the Region into account.

The funding initiative titled the Emergency Support Law for Food Security and Development is currently being considered by the Iraqi parliament. The proposed law was first discussed in parliament on Saturday but further talks are yet to be held. The initiative was sent to the parliament by the current government on March 9.

The proposed law requests the creation of a new account for funds to address food security, development, and poverty in the country. These funds are to be allocated with money that remains from the Ministry of Finance’s budget, as well as subsidies and financial aid from other countries, local and international organizations. Additionally, receiving local and external loans up to 10 trillion Iraqi Dinars, depending on the approval of the government.

The initiative, which consists of 10 articles, has drawn criticism from the parliament’s finance committee and other concerned parties, including Kurdish officials who perceive the law as being detrimental to the Region.

Sections 2 and 3 of Article 3 of the proposed law allocate 35 percent of the account’s money to ministerial projects and non-ministerial groups in provinces that are “not organized within a region,” likely alluding to the areas under the Kurdistan Region.

“The funds included within the law are only applicable to the federal government and [are] outside the budget, which means the KRG [Kurdistan Regional Government] will not get much of it,” Farhad Alaaldin, Chairman of the IAC, told Rudaw English on Wednesday, adding that Kurdish political parties have been distracted by their internal conflicts and have overlooked the negative implications of the potential law. 

Alaadin believes the initiative to be a direct violation of the jurisdictions of the current interim government, which is in a transitional phase amid the ongoing political process. He added that the proposed law is being used as a tool to prolong political instability in Iraq and as a ploy to get more money for certain political parties.

“The effect of passing this law would mean that the future budget law will have less funds available and might run in deficit which will affect the share of KRG negatively when they calculate the KRG share,” he added.

Vian Sabri, head of the Kurdistan Democratic Party (KDP) in the Iraqi parliament, told Rudaw on Wednesday that their party immediately criticized the proposed law during its initial reading in parliament, stating that the KDP has asked for the articles to be amended in order to include the Region.

MP and member of the parliament’s finance committee Mashaan al-Juboori criticized the proposed law following Saturday’s session, saying that the entire initiative will be amended, including its title, in a statement to Iraqi media outlets.

The initiative comes as prices of flour and cooking oils have skyrocketed in local Iraqi markets, sparking large demonstrations in the southern city of Nasiriyah earlier this month. Iraqi officials blamed the conflict in Ukraine for the sudden price increase, AFP reported.

The Iraqi government recently announced a series of measures aimed at confronting the global price increase, as well as suspending custom duties on food products.

The Iraqi government also announced a package in early March, providing 100,000 dinars ($68) to public servants on low income.