In a significant move aimed at addressing financial concerns in the Kurdistan Region, Iraq's finance ministry has deposited 430 billion Iraqi dinars into the Kurdistan Region's account for the payment of public sector salaries. This announcement follows talks between Kurdistan Region President Nechirvan Barzani and Iraqi officials in Baghdad, where discussions on outstanding issues took place.

The Kurdistan Region’s finance ministry confirmed the deposit, stating that the funds were part of the March salary allocation for employees. President Nechirvan Barzani emphasized the importance of Baghdad ensuring the consistent payment of salaries to the Region's civil servants, stressing that these employees are integral to Iraq's workforce.

Efforts to resolve salary issues have been ongoing, with recent negotiations resulting in Baghdad agreeing to resume payments from the federal budget, effective from January onwards. This move follows a ruling by Iraq’s Federal Supreme Court, which mandated the Kurdistan Regional Government (KRG) to provide a breakdown of monthly budget allocations for employee salaries.

Under the ruling, the KRG is required to open accounts for its employees at Iraqi state-owned banks, a process referred to as "localization" by Baghdad. However, financial challenges have persisted in the Kurdistan Region, exacerbated by a Paris-based arbitration court's decision to suspend oil exports, leading to a reliance on local income and federal budget allocations.

Prime Minister Masrour Barzani previously indicated progress in resolving salary payment issues, with assistance from Iraqi Prime Minister Mohammed Shia’ al-Sudani. Nonetheless, the cash-strapped KRG has accused Baghdad of irregular payments, despite Iraq's claims of fulfilling financial obligations, including loans to support salary payments.

The Kurdistan Region's share of the federal budget is set at 12.6 percent over three years, yet challenges remain in ensuring consistent and timely payments to civil servants. As negotiations continue, both sides are working towards a sustainable solution to alleviate financial strains and ensure the welfare of employees in the Kurdistan Region.