Baghdad’s offer to provide funds to cover salaries of Kurdistan Regional Government (KRG) employees on condition that the Kurdish government hands over it oil to Baghdad will not cover even half Erbil’s payroll, said the KRG’s minister of natural resources.
“What Baghdad is saying is not in the interest of the Kurdistan Region because Baghdad won’t provide salaries for 1,400,000 employees for us. What Baghdad is saying is not enough to provide half the salaries, even under austerity measures, never mind the complete salary,” Ashti Hawrami said in the KRG’s Council of Ministers meeting on Thursday.
The KRG’s budget has been hard hit by a number of factors, including, according to Hawrami, Baghdad’s decision to halt exportation of Kirkuk’s oil.
“The Iraqi government’s decision to halt exportation of Kirkuk oil had a negative impact on the Kurdistan budget over the past six months,” Hawrami said.
Iraq stopped exporting oil from Kirkuk six months ago over a row with Erbil about Kurdistan exporting its oil independently. That worsened an economic crisis on both sides, where coffers are severely strapped by the war with the Islamic State (ISIS).
On August 30, Baghdad and Erbil reached an agreement to export 150,000 barrels of Kirkuk oil daily through Kurdish pipelines to Turkey, with revenues being shared jointly between the two governments. The agreement ended stoppage of Kirkuk’s oil.
The agreement will mean that 75,000 bpd (barrels per day) will be exported by the Kurdistan Region and an equal volume by Baghdad to the Turkish Mediterranean port of Ceyhan, sources said.
Iraq's parliament last week assigned several committees to address the lingering economic crisis in the Kurdistan Region and find ways to "ease the financial pressure" on state employees in the Region, Kurdish lawmaker Zana Rostayi told Rudaw.
Rostayi said that according to the constitution, the parliament passes annual budgets that are designed for all Iraq's provinces, including the KRG.
"The Kurdistan Region is still part of Iraq, which is why we think the Iraqi state is responsible to ensure KRG budget and the wages to its employees in the Region," Rostayi said.
The KRG has been struggling to pay its estimated 1.3 million employees since February 2014, when relations between Erbil and Baghdad deteriorated over oil revenues.
Iraq's government froze the Kurdish share of national budget in February 2014, due to Kurdistan Region's signing oil deals with foreign firms largely independent from Baghdad.
"The Iraqi government is accountable for the financial crisis in the Region. State employees in Iraq and Kurdistan Region should be treated equally, something which clearly Baghdad has failed to do," Rostayi said.
The KRG intensified its efforts to solve the financial crisis, including efforts through Baghdad. A high Kurdish delegation headed by President Masoud Barzani arrived in Baghdad on Thursday. One of the topics discussed with Prime Minister Haider al-Abadi was finding a resolution to the dispute over oil and gas.
“With the prime minister we have agreed to solve the disputes, especially economic and oil and gas and seek a better solution for all them,” Barzani said in a jo