Page 14 - DMEA Week 48

DMEA
neWs In BrIef
DMEA
PoLICy
KRG officials positive tone
about 2020 budget bill
despite uncertainty
Kurdistan Regional Government’s (KRG) o cials remain optimistic concerning the oil-for-budget agreement reached with the federal government of Iraq (GOI), despite uncertainties raised by the outgoing Prime Minister Adil Abdul-Mahdi.
Following months of negotiations, the KRG and GOI reached an oil-for-budget deal earlier this week, whereby the Kurdistan Region gets 12.67% of the federal budget
in return for handing over a daily average
of 250,000 barrels of oil to Iraqi state Oil Marketing Company (sOMO).
Disputes between the KRG and central Iraqi government over Erbil’s independent oil sales culminated in Baghdad cutting the Region’s share of the federal budget in 2014.
e budget deal, however, is now facing uncertainty, especially now that Iraqi Prime Minister Adil Abdul-Mahdi’s resignation has been accepted by the parliament, ushering in a caretaker government.
is casts a large shadow over the deal, as con rmed by the outgoing PM on Wednesday.
“We are currently about to nalize the budget. We are still trying to complete the formalities in the budget. however, there are big question marks, whether we have the right to present the budget considering that caretaker governments don’t present bills to the parliament,” the PM said in a Ministers’ council session.
Following the PM’s comments, a day later KRG o cials struck a positive tone in a joint press conference between Finance Minister Awat sheikh Janab, Council of Ministers Chief of sta Umed sabah, and Council of Ministers
secretary Amanj Rahim.
Janab said the budget, if passed, will solve
the problem of delayed salaries for KRG o cials.
he revealed that the government owes salaries to 8 civil servants and 12 retirees.
“If this budget is passed in the Iraqi parliament the way we want it, the problem of salaries will be resolved by a great percentage, by about 90%. It won’t be the case that salaries get paid [a er] a period of 20 days, like now,” Janab added.
he said that the delay in payments is a result of cuts to the KRG’s budget.
“ is is the responsibility of the Kurdistan Regional Government. It is the outcome of the political condition caused by the budget cut of Kurdistan. is is an outstanding debt. At this moment, the Kurdistan Regional Government doesn’t have the ability to repay this debt.”
In case the budget is not passed in the parliament and takes longer than expected, the Minister alleviated fears, claiming that money would still ow in the Region.
“We have an initial agreement with Iraq about this, to work based on the 1/12 principle per law for the budget of 2019 [sic]. ere won’t be a big problem in this regard,” the minister added.
e 1/12 principle is a law that stipulates in case of no existing budget law, the Iraqi government will spend one twel h of the budget according on prior year’s budget. e budget is for operations and salaries and essential nancial obligations, but not for investment and other expenses.
Amanj Rahim, secretary general of the Council of Ministers, claimed the “knot” that was straining relations between Baghdad
and Erbil was “opened to an extent” by Erbil committing to handing 250,000 of oil per day to sOMO.
e Kurdistan Region has been also able to eliminate the deduction of its budget in the “sovereign expenditures” section that includes
debts and interests on debts paid back by Iraq, especially the debts that had nothing to do with the Region.
Rahim claimed that “only for investment projects” $62 billion of foreign loans have been taken out by Iraq for investment projects, only 2% of which has been given to the KRG.
Rahim, however, was optimistic about the future of the deal, even if a new government is in place. “If this bill comes to a halt, all of Iraq will be stuck. however, the good news is that the deal the Kurdistan Region has made with the federal government is considerate of both sides when there is a new government,” Rahim added.
“ is budget has been formulated in a fair manner, in which everyone, including the Region, shoulder the burdens, in return they get their rights. It is a fair budget for all Iraqis,” Umed sabah, chief of sta of Council of Ministers, told reporters.
rUdaW
ComPanIes
Borouge seeks new
markets in East Africa and
South East Asia
Abu Dhabi-based chemicals company Borouge is looking to expand into East Africa and south East Asia to meet growing demand for polymers, according to a company executive.
speaking on the sidelines of the Gulf Petrochemicals and Chemicals Association Forum in Dubai on Wednesday, the chief executive of Borouge’s singapore-based sales and marketing arm, Wim Roels, said the company is looking both eastward to Asia and to Africa in terms of building market
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Week 48 05•December•2019