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Economy News - BaghdadThe International Center for Development Studies warned that 4 economic crises in Iraq will cause the government of Prime Minister, Muhammad Shia al-Sudani, to collapse soon.
A report issued by the center, under the supervision of the Director of Economic Research, Sadiq Al-Rikabi, of which Al-Arabi Al-Jadeed received a copy, stated that the Sudanese’s ability to implement its government program is limited in light of the crisis of cutting the salaries of employees of the Northern Kurdistan region.
The center’s report noted that this crisis is due to the Iraqi Council of Ministers approving, this September, a loan to the region worth 500 billion dinars ($380 million) for the period from September to November, while the region’s administration is demanding that an additional Salaries for the months of July and August as well for that period, considering that what Baghdad is doing is “a starvation policy practiced against the people of Kurdistan.”
As for Baghdad, it announced that the funds owed by the region represent 3 times its share, according to the state’s actual spending, and that Kurdistan did not hand over its oil and non-oil revenues to the federal government in accordance with the budget law.
oil and gas
Al-Rikabi points out, in this regard, that the timing of the decisions issued by Baghdad raises many question marks, as the decisions do not represent the Sudanese government’s previous approach to avoiding any escalatory measures with the Kurdistan region and to be patient regarding the oil companies operating in it to avoid harming the national economy.
But the sudden change in the Iraqi government’s policy “may increase the negative impact on the oil industry in the region,” according to the report, which indicated that most foreign oil companies there stopped working, which led to a decline in the region’s financial revenues.
This comes at a time when Ankara adheres to its position on the necessity of repairing the Iraqi-Turkish oil pipeline before allowing the export of Kurdistan oil.
In a related context, the report refers to another crisis represented by the missile attacks on the gas fields in Erbil and Sulaymaniyah, which were repeated during the past year and continued until August of this year, in addition to the targeting of the oil fields in Basra in the year 2020. This stopped operating companies from carrying out their activities, and hampered plans aimed at transforming Iraq into a gas exporting country, or even achieving self-sufficiency in the field of energy.
While Iraq plans to double the production of one of the largest gas fields in the Kurdistan region, the Khor Mor field, from 450 million cubic feet per day to one billion cubic feet in the coming years, the missile bombardment, at the end of last month, hindered those plans, according to the report.
Al-Rikabi explains that this limited Iraq's ability to use quantities of gas to generate electricity and thus limited its ability to reduce the gas import bill from Iran.
If sufficient investments are available, the reserves of the Khor Mor field, amounting to 16 trillion cubic feet, will enable the Kurdistan region to export more than 500 million cubic feet per day, and the European Union countries are likely to be the appropriate market for importing them.
The Khor Abdullah crisis with Kuwait emerged to increase pressure on the Sudanese government. After the Iraqi parliament voted on the maritime navigation ratification agreement between Iraq and Kuwait in 2013, the Federal Supreme Court ruled in a sudden step that this law was unconstitutional.
This required the Gulf Cooperation Council to call on Iraq to respect Kuwait’s sovereignty and not to violate international resolutions, especially UN Security Council Resolution No. 833 of 1993, regarding the demarcation of the borders between the two countries and the agreement to regulate maritime navigation in Khor Abdullah, which was deposited with the United Nations.
This embarrassed the Sudanese government, which seeks to attract Gulf investments, especially in the field of energy, through electrical interconnection and investment in gas and clean energy. Therefore, the report of the International Center for Development Studies indicates that the current situation constitutes a worrying factor for the stability of Iraq and the end of the “honeymoon” that the Sudanese government experienced. months ago.
The Center's report estimates that the succession of these sudden crises and the possibility of their interconnection will have a negative impact on the future of the energy sector in Iraq, especially in light of Baghdad setting a goal of being satisfied with importing gas from Iran within 3 years.
Achieving this goal would enable Iraq to save large amounts of money that were spent on importing gas for the benefit of the economy and development, thus supporting its position on the map of international economic and political relations, but the succession of crises affecting the energy sector has become a real threat to the stability of the Sudanese government.
Source: Al-Arabi Al-Jadeed
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