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MEOG Commentary MEOG
raising concerns about the prospects for the 2020 budget.
Kurdish news agency Rudaw last week quoted Bashir Haddad, second deputy speaker of the Iraqi parliament and member of the KDP, as saying that if the KRG fails to meet these obli- gations, the federal government will “cut a part of the budget for investments and projects pro- portional to that amount.”
He suggested that the KRG show ‘goodwill’ and ‘commitment’ to Baghdad by shipping oil through SOMO in order to secure its share in the 2020 budget, adding that Kurdistan has failed to ful l the obligation since the budget was passed.
Meanwhile, Jamal Kochar, a Kurdistan Islamic Union (KIU) MP was quoted as saying: “If we don’t give anything to [Iraqi Prime Min- ister] adil abdul-Mahdi, he will surely not do anything for us in dra ing the 2020 budget.”
Kochar suggested sending 100,000 bpd in July, 150,000 bpd in august, 200,000 bpd in September, and then 250,000 bpd during each October, November and December, in order to ensure Kurdistan’s negotiating position when it comes to discussing the budget for 2020.
according to reports in late March, nego- tiations remained ongoing between the two authorities, with Erbil said to be pleading inabil- ity to hand over the revenues at present owing to the depth of the territory’s scal di culties.
e Kurdistan Regional Government (KRG) has not published production gures since the agreement came into force so where the output cuts are falling is unclear, but the implication at the time Baghdad entered the deal was that the curbs would be applied to federally-governed production.
e scal plan provides for record spending
of US$111.5 billion and projects a US$23 billion de cit on the basis of assumed exports of 3.88 million bpd at an average sale price of US$56 per barrel.
In Baghdad, criticism of abdul Mahdi for being ‘generous’ with the KRG is growing amid calls for budget payments to be stopped.
New Generation MP Sarkawt Shams al-Din was recently quoted as saying that Baghdad had led two lawsuits regarding Kurdistan’s inde- pendent oil exports. One of these was lodged against the KRG in Baghdad’s federal court and the other was lodged in France against the Turk- ish government.
abdul Mahdi is thought to be seeking to appease the Kurds, from whom he garners sup- port, in light of the failed independence bid, but the current status quo is unlikely to continue for long.
For now though, it appears that at least the salaries of the Peshmerga and civil servants are safe. e Kurdistan region’s economy rests on the solving of this issue and nding a resolution will be the top of ‘to-do’ lists of the new President and PM.™
Week 24 18•June•2019 w w w . N E W S B A S E . c o m P5