Official KRG Response to Statements made by Prime Minister of Iraq, Haider al-Abadi
It is unfortunate that Prime Minister al-Abadi, without any tangible evidence, made allegations against the Peshmerga forces who have been sacrificing their lives on a daily basis; the whole world recognizes their bravery and heroism in the fight against terrorism. It is astonishing that the Prime Minister in a TV interview proposed solutions to solve outstanding issues between Erbil and Baghdad while this could have successfully been executed through diplomatic means, especially since a high level KRG delegation recently paid an official visit to Baghdad and met with Prime Minister al-Abadi.
This announcement sheds light on politically motivated questions and suggestions presented by Prime Minister al-Abadi. We accept his suggestion to pay the salaries of the Kurdistan Region’s public servants in exchange for handing over the total amount of produced oil in the Kurdistan Region.
1. During the interview, Prime Minister al-Abadi indicates that he is the Prime Minister of all of Iraq and that he takes up the responsibility of the general well-being of all Iraqis, including the people of Kurdistan Region. Yet, no one can deny the fact that since 2005 the Kurdistan Region has never received the full 17% of its share of the federal budget, in fact, it never exceeded 11.4%. In addition to that, the federal government has cut the KRG’s share of the federal budget since February 2014. So far, the federal government has not spent a single Dinar on Peshmerga forces, the financial entitlement of Peshmerga forces from 2007 till the end of 2015 is estimated at eleven trillion, five hundred thirteen billion, forty five million Iraqi Dinars. As he pointed out, Peshmerga forces are part of the Iraqi defense system in accordance with article 121 of the Iraqi constitution, which entitles them to receive financial entitlements from the sovereign budget, especially since the Kurdistan Region has been covering 17% of the sovereign expenditure from 2005 onwards.
2. According to an agreement signed between Erbil and Baghdad on the 2nd of December 2014, in addition to the budget of the Kurdistan Region, Baghdad should send 100 billion Iraqi Dinars from the sovereign expenditures to the Peshmarga every month, but that agreement was never implemented.
3. The Iraqi Federal Government requires 4.1 trillion IQD to cover monthly salaries of government employees at a time that Iraqi oil exports bring in an income of only 1.8 trillion IQD per month. 96% of the general income of Iraq comes from oil sales, so why does Prime Minister al-Abadi not talk about the sources of the 2.3 trillion IQD deficit. The source is the reserved currency of the Central Bank of Iraq and the Kurdistan Region is constitutionally entitled to 17% of that reserve but never received it. The federal government has taken loans for all of Iraq from international sources, yet deprives the Region from access to it.
4. According to the Federal Budget of 2016, the estimated share of the Kurdistan Region amounts 478 billion IQD. This amount is only of the salaries of the permanent government employees, excluding the pensioners, Peshmarga, and Assayish security forces. In the Kurdistan Region there are 1.4 million government employees, the KRG needs 890 billion IQD to pay them all. From this amount 336 billion IQD goes to the salaries of Peshmarga and Assayish security forces in addition to 30 billion IQD for operational expenses. While the entire world appreciates the bravery of the Peshmarga forces in their fight against terrorism, we are surprised to note that Prime Minister al-Abadi never mentions the important role the Peshmerga plays in protecting the 1,050 km frontline against the most vicious terrorist organization in the world. He also failed to mention that 1,392 Peshmarga soldiers have martyred, 8,215 wounded and 62 have been reported missing since the start of the war. In contrast, the Iraqi Popular Mobilization Force has a special federal budget and their expenses are fixed in the 2016 Iraqi federal budget law. It is worth noting that we sincerely appreciate their role in the fighting against ISIS. However, there is no transparency in how the considerable amount of Iraqi defense budget has been spent since 2007. The final account of spenditure of the sovereign budget has not been approved so far.
5. The Iraqi Prime Minister falsely claimed that Kurdistan Region’s oil exports and income have not been documented under any official accounts in the Kurdistan Region. However, the KRG’s Ministry of Natural Resources publishes its oil exports and financial report on a monthly basis, which includes all details. The Kurdistan Region’s share of the Iraqi federal budget was cut by a political decision in February 2014, yet the KRG managed to pay the salaries of public servants in 2014 and for eight months in 2015 from its oil export income. The KRG managed to pay its Peshmarga forces and spent large amounts of money to accommodate 1.8 million Syrian refugees and Displaced Iraqis. It is the responsibility of PM al-Abadi and the Federal Government of Iraq to accommodate and care for its displaced population. However, the federal government has not allocated any budget for them. Note: the unpaid budget of the Kurdistan Region for 2014 and 2015 is still with the Iraqi Government and unaccounted for.
6. To refute the federal government’s accusations, the KRG showed a gesture of goodwill by sending 550 barrels of oil to SOMO Company in April of 2015. The KRG waited for the federal government to send the KRG its overdue budget in accordance with the 2 December 2014 Agreement that was mentioned in the federal budget law of 2015 in return. (In addition to 100 billion IQD for the Peshmarga salaries to be sent from sovereign expenditures as mentioned in the agreement above). Unfortunately, the Federal government did not send the full budget for that month and also deducted 10% of that money (54 billion and 340 million IQD) in the airport as transportation process of that money. Consequently, the KRG received 488.760 billion IQD, which could not cover the public servants’ salaries for that month. The KRG learned later that the 10% deduction took place upon direct orders from PM al-Abadi.
7. In the agreement of 2 December 2014, which later became part of the federal budget law of 2015, both sides agreed on the minimum budget for the Peshmarga set as 100 billion IQD per month. The Prime Minister agreed that this 100 billion IQD should come from the Federal Ministry of Defense’s budget as part of sovereign expenditure. That is why we are surprised to hear Prime Minister al-Abadi’s statement that the salaries of Peshmarga are unclear. It is worth mentioning that after that agreement and from the start of 2015 onwards, field expenditures of the war against the terrorists of ISIS has increased dramatically, especially after librating Kurdistani areas, such as Sinjar and Jalawla.
Despite all the above, the Kurdistan Regional Government emphasizes on the importance of the continuation of talks, negotiations and the implementation of legal commitments with the Federal Government of Iraq on the basis of mutual interests, acquiring legal and financial rights of the Kurdistan Region from the Iraqi Federal Budget, and in accordance with the Iraqi constitution.
Therefore, the KRG declares that it accepts Prime Minister al-Abadi’s suggestion of sending the entire salaries of the Kurdistan Region’s 1.4 million employees which amount to 890 billion IQD. Of this amount 336 billion IQD is allocated to the gallant Peshmarga forces of Kurdistan. In return, the KRG stands ready to hand over its entire oil production to the Iraqi Federal Government as suggested by Prime Minister al-Abadi.
KRG Council of Ministers
16 February 2016
