Page 9 - MEOG Week 34 2021

MEOG POLICY MEOG

Baghdad sends more cash

to Erbil but no budget news

IRAQ IRAQ’S federal government this week trans- agreement passed by the Iraqi Cabinet pegged
ferred more funds to the Kurdistan Regional the 2021 budget at IQD130 trillion ($89.65bn)
Government (KRG) to pay the salaries of civil and a deficit estimated at IQD28.7 trillion
servants, but there has been no word of pro- ($19.79bn).
gress on efforts to reach agreement on budget With the country 97%-reliant on oil exports,
payments. the budget is based on an oil price of $45 per bar-
Following in the transfer of a IQD200bn rel with total exports averaging 3.25mn barrels
($138mn) advance to Erbil in July, KRG spokes- per day (bpd).
man Jotiar Adil said that the same sum would After numerous voting delays and heated
be sent this week. “Salaries will be paid in full exchanges between political factions, agree-
starting the 25th of this month, and the process ment was reached on major stumbling blocks,
will finish within a week,” he told Kurdish media predominantly the KRG’s revenues from oil
outlet Rudaw. exports and non-oil revenues including customs
Adil noted that this would be the second fees and taxes.
month in a row that the KRG had paid its As in previous budgets, the KRG will receive
employees in full, with government revenues 12.67% of the total, with this contingent on it
also needed to ensure that no cuts were required. handing over the net revenues from 250,000 bpd
After last month’s advance, KRG Prime Min- of oil exports to Iraq’s state oil marketer SOMO
ister Masrour Barzani said: “From this month we and giving the revenues to the central treasury.
will distribute the salaries of the people of Kurd- Kurdish oil exports have long been seen by many
istan without cuts and I hope the federal gov- in Baghdad as unconstitutional and in late Jan-
ernment will commit to keeping their promise uary 113 MPs, most of them Shi’ite, wrote to the
to send that budget share so that we can, in the head of the parliament to ask that budget article
upcoming months, distribute people’s salaries 11 be redrafted to force Erbil to provide all out-
without cuts, but it depends a lot on if the fed- put to SOMO.
eral government will implement their promise It suggested that section 2a of article 11
or not.” should read: “The Kurdistan region will abide by
The regional government has faced a popular sending 460,000 barrels of oil per day to SOMO,
backlash after having struggled to pay salaries and in case of overproduction, they abide by
and imposed pay cuts on higher earners. sending the excess amount to SOMO as well.”
Despite having reached an agreement on the While the KRG was never likely to agree to this,
Iraqi budget in March, persisting issues have Erbil has committed to a minimum production
meant the KRG is yet to receive any funds. The level of 460,000 bpd.™

Week 34 25•August•2021 www. NEWSBASE .com P9