ERBIL, Kurdistan Region – The Kurdistan Region isn’t expecting to receive a share of the $5.4 billion in external aid the International Monetary Fund (IMF) has agreed to provide Iraq on condition that it can reform, a Kurdish official said.
“The federal government of Iraq is not ready to fulfill the IMF conditions,” the Kurdistan Regional Government’s (KRG) Board of Investment chairman Noori Abdulrahman said on Thursday.
This is partly because Erbil does not believe Baghdad can implement the necessary reforms outlined by the IMF.
But even if Baghdad did meet the reform conditions Abdulrahman is still skeptical that “Iraq will give us a share of our budget,” given the impasse between Baghdad and Erbil over revenue sharing and oil export procedures.
Erbil had previously insisted that it receive at least 17% of any IMF loan in accordance with the Iraqi constitution which stipulates that 17% of Iraq’s national budget should be allotted to the Kurdistan Region.
Late last month foreign ministers of the European Union approved a motion in Brussels to help the Kurdistan Region overcome this crisis through the IMF and the World Bank.
In a statement the EU Foreign Affairs Council said that, “the EU will explore further means to help the Iraqi Federal Government and the Kurdistan Regional Government to recover economic and financial health, in close coordination with the IMF and WB, in particular through support to the reform of public finance and macroeconomic management systems.”
Iraq has opposed the Kurdistan Region’s independent export of oil from its territory and has even stopped pumping 150,000 barrels a day from Kirkuk at a time when Kirkuk is struggling economically.
The Kurdistan Region hosts large amounts of displaced persons from across Iraq and has suffered economically as a result of Baghdad freezing the autonomous region’s share of the national budget.
“The EU urges the Government of Iraq and the Kurdish Regional Government to set aside their differences, ensure the transparent and equitable distribution of oil and gas resources, and to step up their efforts to fight corruption,” the EU statement added as conditions to granting Iraq any aid.
