From left to right: Deputy Prime Minister Qubad Talabani, Prime Minister Nechirvan Barzani, Interior Minister Karim Sinjari, Agriculture Minister Abdulstar Majid and Education Minister Pshtiwan Sidiq attend a KRG cabinet meeting in Erbil on December 11, 2017. Photo: KRG
ERBIL, Kurdistan Region – The Kurdistan Regional Government (KRG) plans to prioritize salaries and basic services in its budget for the first half of next year after its revenues took a hit with the loss of Kirkuk oil fields in October.
Two financial reports were put to the Council of Ministers.
Minister of Natural Resources Ashti Hawrami outlined expected oil revenues and expenses for the first six months of 2018, according to a government statement that did not provide figures.
Hawrami has returned to the Kurdistan Region after months abroad. Some MPs had filed a request to “locate and return” Hawrami – a proposal Prime Minister Nechirvan Barzani laughed off by saying that he was not “missing,” but was on an official visit.
Hawrami returned with the KRG delegation that visited France in early December.
Acting Finances Minister Rabar Sidiq also briefed the cabinet about non-oil revenues, public sector expenses, and state salaries.
“The Council of Ministers discussed the two reports and the options to provide the salaries and the budget of the Kurdistan Region for the year 2018,” the KRG statement read.
“Providing salaries will be the priority,” it added.
As part of austerity measures to combat an ongoing financial crisis, the KRG cut or reduced public sector salaries. The unpopular move sparked criticism of the government and large protests, particularly in Sulaimani.
Erbil has not received its share of the national budget since early 2014. Baghdad cut the funds when the KRG threatened to export oil independently.
That cut, combined with low oil prices and the war against ISIS, contributed to the Kurdistan Region’s financial crisis. Erbil was also hard hit when it lost control of several oil fields in disputed Kirkuk province to Iraq in mid-October.
KRG’s estimated oil exports now stand at about 250,000 bpd, down from an average of 550,000 bpd in early October.
For Iraq’s 2018 budget, Erbil and Baghdad disagree on the KRG’s share. The Kurdistan Region insists it is entitled to 17 percent, as has been the practice since the foundation of the new Iraq in 2003. Baghdad argues that the KRG’s population is less than 17 percent of Iraq and has tried to reduce the amount it pays to the KRG to 12.6 percent.
The Iraqi parliament is yet to discuss the draft budget after debate was twice postponed because of opposition from Kurdish and Sunni MPs.
The statement did not say whether the ministers discussed the KRG’s share of Iraq’s budget.
The KRG cabinet also discussed the Region’s agriculture and decided to form a special committee to discuss a report presented by Agriculture Minister Abdulstar Majid that addressed water resources and the chain of food production in the Kurdistan Region. The multi-ministry committee will study proposals and then report back to the cabinet to make final decisions, including on establishing reservoirs to conserve water.
The cabinet also touched on the end of ISIS in Iraq, which was announced by the Iraqi government on Saturday. The statement said they congratulated the people of Kurdistan and Iraq on the victory and praised the role of the US-led Global Coalition for their support, without which the victory would not have been possible.
It thanked the “bravery of the Peshmerga forces... who recorded the first victory against ISIS,” the statement said, adding that they also congratulated “all Iraqi forces.”
The military defeat of ISIS does not mean the end of the extremist organization, the cabinet warned, stating that the root causes that helped ISIS to emerge must be addressed.