The Iraqi budget reassures the region of oil... a prelude to settling the crises between Baghdad and

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[size=52]The Iraqi budget reassures the region of oil... a prelude to settling the crises between Baghdad and Erbil?[/size]

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The Iraqi central government’s announcement of its completion of a consensual draft law for the country’s general budget with the Kurdistan Regional Government, and that it will adhere to its content and implement its provisions for the next three years, reflected positively among the political, social and economic circles in the region, especially that it will be done according to the same arrangement, ratios, and mechanisms. This is the first time that the economic, political and legislative relations between the central government and its counterpart in the region will witness stability and consensus.[/size]
[size=45]Iraqi Prime Minister Muhammad Shia al-Sudani announced that the total value of the budget is about 200 trillion Iraqi dinars annually (about 150 billion dollars), of which the country’s operational departments drain 75 percent, while the rest will go to investment, reconstruction, support for liberated provinces, assistance to the poor classes, and launch of balanced development. He stated that the specified and expected price of oil is 70 dollars per barrel, with a specific value of the local dinar price estimated at 1,300 Iraqi dinars per dollar. These numbers will be subject to increase and decrease according to the variation in oil prices at the global level.[/size]
[size=45]A new oil account
, but the most obvious and direct in the announced central budget draft, is defining the mechanism for dealing with the oil extracted from the fields of the Kurdistan region, where a new bank account will be opened, in which all the financial resources coming from the sale of the Kurdistan region’s oil production will be deposited, and the rest of the accounts will be closed The bank that is currently used to receive the region's financial resources, so that the daily export of the region's oil is 400 thousand barrels per day.[/size]
[size=45]In the details, this bank account will be subject to the authority of the Prime Minister of the Kurdistan Region of Iraq, or whoever delegates him, to use it for public expenditures in the region. Provided that a joint committee of the two parties is formed, which monitors that fund (the bank account), and submits its recommendations to the head of the central government.[/size]
[size=45]In addition, the share allocated by the budget for the region will be determined at 12.67 percent, from which the revenues of the Kurdistan region deposited in that bank account will be deducted, and then the central government will transfer the difference to the regional government, as a reparation for the fraction and the shortage that will occur between the numbers of the region’s share and the value of its resources. .[/size]
[size=45]Observers mentioned that the value that may constitute a difference between the two numbers is estimated at about 300 billion Iraqi dinars per month ($225 million), which the central authority will transfer to the Kurdistan region. However, they consider that this does not mean the end of the financial dispute between the two parties. The regional government will continue to demand that the salaries of the Kurdish Peshmerga forces be considered part of the sovereign expenses that must be paid from the central budget, and the same applies to the arming of these forces, along with the various sectors that receive central government support, such as medicines, bread and some basic foods, along with the region’s share. With the bids, loans and international aid that Iraq gets.
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Presentation of the Kurdish Peshmerga forces. (AFP)[/size]
[size=45]Overlapping Paths
Economic researcher Aram Haj Hassan explained in an interview with “Al-Nahar Al-Arabi” the path of stability that will be shaped by approving the general budget in this way in the Kurdistan region, which he divided into four overlapping levels, and he said: “In principle, and as announced by more than one political and government official in the region Kurdistan Hours after the announcement of the central government, the regional government will pay the salaries of its employees in a stable and permanent manner, without any delays or deductions, and this positively affects nearly 80 percent of its population. In this context, the oil sector in the region will come out of any political and legislative disputes or conflicts regarding it, after the decision of the central authority, which may raise its prices relatively, and develop the infrastructure for this sector, as international companies will be less concerned to work and invest in the Kurdistan region.[/size]
[size=45]Haj Hassan added, “Financial stability will allow the Kurdistan Regional Government to define clear, long-term strategies and visions for its economic projects. This three-year budget will often turn into a model for stability in the financial relationship between the region and the regional government. In addition to all these issues, financial stability will have a major role in creating a positive atmosphere between the two parties on the rest of the issues, especially the security and political issues between them.[/size]
[size=45]“Halabja Governorate”
The approval of the central government for the consensual budget with the Kurdistan region came at a time when Baghdad agreed to transform the Halabja district into a governorate, which is an administrative and economic demand that the regional government had been calling for for years. The central government also announced the allocation of $34 million for the benefit of the regions of Sinjar and the Nineveh Plain, and its disbursement in agreement with the Kurdistan Regional Government, as these areas are considered “disputed” between Baghdad and Erbil. This is something that the officials of the Kurdistan region increased their demand for allocating compensation and special funds for the new province of Halabja, as compensation for its residents for their exposure to chemical weapons attacks from the former Iraqi regime.[/size]
[size=45]However, those who follow the file of the relationship between the Kurdistan Regional Government and its central counterpart considered that reaching an agreed-upon law for oil and gas in Iraq is the direct test for the possibility of achieving the provisions of the current budget law, as well as the possibility that it constitutes a passage towards putting all the outstanding crises between Baghdad and Erbil on the table. preparation for their solution.[/size]
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