Kurds claim their share is neither sufficient nor fair.
Sunni MPs participating in the session allowed for a quorum, which their Kurdish counterparts see as a political coup.
“They have committed a coup against the agreements they made with us in 2003,” Adil Nuri from the Kurdistan Islamic Union (KIU) told Rudaw.
Nuri was not completely disappointed, however. He called on Kurds to meet and make a decision to withdraw from the Iraqi government.
“Then they [Iraqi officials] will be obliged to knock our door. Let’s not this miss this opportunity.”
The law consists of 58 articles. One of them obliges the Kurdistan Regional Government (KRG) to return all the money it gained through its export of Kirkuk oil.
Muthana Amin, the head of the KIU bloc, said the Kurdish parties are concerned that Iraq’s current budget bill only nets about 6-7 percent for the KRG.
Kurdish demands
The bulk of Kurdish demands were not met despite mounting pressure on the parliament and Iraqi Prime Minister Haider al-Abadi to increase the KRG share from 12.67 percent to its original 17 percent.
Abadi has consistently said the 17 percent share was based on an outdated political agreement that his government will not remain committed to.
Iraq’s budget for 2018 is about 104 trillion dinars [$88 billion]. The Iraqi budget operates with a deficit of 12.5 trillion dinars, or about $10.58 billion. The budget is based on a projected oil price of $46 per barrel and a daily export capacity of 3.8 million barrels.
The KRG’s share stands at 6.6 trillion dinars, a monthly sum of 558 billion dinars. The KRG, however, has on numerous occasions said it needs 850 billion dinars to pay its civil servants on a monthly basis. The economic crisis has forced the KRG to reduce this to 600 billion dinars. There are 1.249 million people on the KRG’s payroll, according to its figures.
Erbil says its revenues have been slashed by almost half since the loss of the Kirkuk oil fields to the Iraqi government in mid-October, leaving the government with a net of $337.4 million (about 400 billion dinars) for salaries after deducting essential expenses and payments to international energy companies.
Other demands of the KRG are the allocation of petrodollars to the provinces of the Kurdistan Region, the inclusion of the Peshmerga budget in Iraq’s defense system, financial provisions for the recently created Halabja province, and payments for oil companies working in the Kurdistan Region. Baghdad, however, has not agreed to these demands.
Baghdad said earlier this month it will not cover the gross payments due to oil companies that have signed agreements with the Kurdistan Region.
According to Masoud Haider, an MP for the Change Movement (Gorran), nothing has been allotted in the budget for the payment of oil companies operating in the Kurdistan Region, while 22 billion dinars has been made available for companies working in other parts of Iraq.
The Kurds also demanded a reduction in Iraq’s sovereign funds by 40 percent.
Iraq’s sovereign funds cover expenses such as the defense budget, the Iraqi Council of Ministers, the Iraqi parliament, the Iraqi president, and border guards.
Overall, 39 percent of the budget amounting to 41 trillion dinars goes to the sovereign funds. Of this fund the KRG receives nothing.
There were two main changes made to the bill.
First, the Kurdistan Region is now referred to as the “Kurdistan Region” not “provinces of Kurdistan.”
Second, a budget has been allocated for Peshmerga salaries, but not for their operational needs.
The International Monetary Fund (IMF) has said the 12.6 percent share will not cover the KRG’s expenses.
“[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 had told Rudaw.
Change Movement (Gorran) MP Haider issued a statement in the wake of the budget claiming there is a deliberate desire to leave many of the problems as they are.
He called on “Kurdish political leaders to discuss all options … to reject this.”
Haider said they did their best to produce another outcome.
“We as Kurds on the financial committee have conducted many meetings with the United Nations Assistance Mission for Iraq (UNAMI), the International Monetary Fund, Iraqi high officials, parliamentary presidency, and Iraqi Prime Minister Haider al-Abadi.”
He urged the reestablishment of Erbil-Baghdad relations.
“The International community and Kurdish and Iraqi friends should work to re-establish Erbil-Baghdad relations on the basis of the constitution.”
Abadi has insisted that the KRG’s share should be less, in proportion to the Kurdish population, estimated by Baghdad to be 12.67 percent.
Kurdish MPs have not been willing to accept anything less than a 17-percent share.
There has not been a census in Iraq since 1987.
‘Dream won’t come true’
After passing the budget bill, Speaker of the Iraqi Parliament Salim al-Jabouri said demands of the Kurdistan Region were included in the budget.
He also said the parliament would monitor the economic situation in the Kurdistan Region.
“What has been fixed in the public federal budget clearly stipulates the resolution of the demands of the Kurdistan Region within the framework of the budget, including what is associated with the salaries of the Kurdistan Region civil servants,” said Jabouri.
He noted that the Iraqi government and parliament should take into account the economic crisis that has engulfed the KRG, particularly the matter of salaries and farmers’ income.
Kurdish farmers have not been fully compensated for the wheat crops sold to Baghdad over the past three years, adding to a ballooning debt owed to the Kurdish crop growers by the Iraqi government.
“Given measures taken to deal with the Kurdistan Region, the Iraqi government and parliament will be committed to resolving all the economic issues that the KRG has been going through, as part of efforts to resolve the tough situation the state of Iraq is facing,” Jabouri added.
A State of Law bloc MP told a press conference in Baghdad that the Kurdistan Region’s “dream” of restoring its 17 percent budget share “will not come true.”
Adnan al-Assadi said “the Kurdistan Region’s share has been earmarked per population ratio and they will not be given any more.”
“The Kurdistan Region’s dream is to receive its previous share of the national budget, but we are telling them very frankly – this dream will not come true from today.”
He pointed out “there is unanimity inside the parliament that no portion outnumbering their population ratio should be entitled to the Kurdistan Region. On the contrary, any more going to them within the framework of the 2018 budget law will not be voted on.”
Last updated at 10:15 p.m
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