Erbil and Baghdad Reach Agreement on Kurdistan Region Budget Implementation
In a significant development, the Kurdistan Regional Government (KRG) and the Iraqi federal government signed a memorandum on Wednesday, paving the way for Baghdad to fulfill its obligations in providing financial entitlements to Erbil as outlined in the recently-passed federal budget.
Following an intense meeting, the two delegations reached an agreement on the implementation of the Kurdistan Region-related articles in the budget. Subsequently, a joint memorandum was signed to enable the immediate provision of funds to the Kurdistan Region, marking a positive step forward in resolving financial issues.
KRG Spokesperson, Peshawa Hawramani, took to social media to announce the successful agreement, expressing that the salaries of the Kurdistan Region's public servants will be disbursed as soon as possible as a result of this breakthrough.
أتفاق بين حكومة كوردستان والحكومة العراقية بشأن صرف مستحقات كوردستان المالية.
— Peshawa Hawramani (@PHawraman) July 26, 2023
وصل وفد من حكومة اقليم كوردستان يوم الاربعاء الموافق 26/7/2023 الى بغداد والتقى بوفد من الحكومة الاتحادية لمناقشة تطبيق قانون الموازنة، وذلك لارسال المستحقات المالية لاقليم كوردستان، وتوصل الجانبان…
The federal government delegation, however, has yet to provide an official comment on the newly established agreement.
The federal budget, passed in June after months of contentious discussions, had been a subject of contention for the KRG. The Region had appealed several points in the budget law, particularly Articles 11, 12, and 13, which address the Region's share and management of its oil resources, claiming these articles were formulated "unlawfully and unconstitutionally."
As per the budget law, the KRG is obligated to sell 400,000 barrels of crude oil through Iraq's national oil marketing body. Failure to comply with this condition would result in Iraq taking Kurdish oil for its internal use. However, the flow of Kurdish oil through the Iraq-Turkey pipeline was halted after a Paris arbitration court ruling on March 23, which favored Baghdad's claim that Ankara had breached a 1973 pipeline agreement by allowing independent oil exports from the Kurdistan Region in 2014.
With the resumption of oil exports yet to occur, the Kurdistan Region has been heavily reliant on local income and funds provided by Baghdad as debt to meet its financial obligations, making this new agreement crucial for alleviating the financial strain.
The federal budget, including the provisions agreed upon in this memorandum, is expected to be implemented later this month.
