ERBIL, Kurdistan Region — The International Monetary Fund believes Iraq's 2018 budget share proposals "do not suffice in our view to cover the needs of the Kurdistan Regional Government.” Baghdad’s proposal would slash the budget of the KRG by more than 4 percent.
"[W]e've communicated to the federal government that the 6.6 trillion [Iraqi dinars] (about $5.56 billion) that are currently in the 2018 draft budget do not suffice in our view to cover the needs of the Kurdistan Regional Government. To that, in our opinion, these transfers should be increased to about 10 trillion Iraqi dinars ($8.43 billion)," IMF Deputy Division Chief Christian Josz told Rudaw on Thursday.
The Government of Iraq has relied heavily on international loans and bonds because of the global drop in oil prices coupled with a three-year war against ISIS, and now a campaign to rebuild the country's already aging infrastructure.
"We lent money to the entity of Iraq because it's a member of the IMF and has the right and the circumstances to draw on the resources of the IMF," explained Josz. "As part of the standard arrangement, the standard arrangement is based on the budget that is approved by parliament."
Since 2014, Erbil has contended Baghdad is not sending the 17 percent share of the Iraqi government budget.
"In that budget, until now, there was a budget-sharing agreement between Baghdad and the KRG and its via that way that we encourage the whole of Iraq to benefit from the IMF loans, i.e. by implementing the budget-sharing agreement, which has obligations both on the sides..." said the deputy chief.
In a proposal for next year's draft budget, the KRG is allocated 12.6 percent of Iraq's total share.
"In the 2018 budget, we have made clear to the federal government that it is very important to us that the Kurdistan Regional Government gets sufficient transfers to cover the expenses to cover the Kurdistan Regional Government," added Josz.
Many Kurds believe the central authorities are taking punitive measures against the Kurdistan Region for holding the September referendum on independence. Regional autonomy is enshrined in the 2005 Iraqi constitution.
The government in Erbil has complained that Baghdad has used the budgets as a tool to prevent Erbil's independent exportation of oil to world markets through a pipeline that terminates at Turkey's Ceyhan port.
KRG Prime Minister Nechirvan Barzani has said the people should realize that the KRG’s revenues “have been slashed by half” since the loss of the oil-fields in Kirkuk in mid-October.
