On March 31, Iraq's Council of Representative passed the
belated budget bill after several delays and disputes among the political blocs, especially between the Kurdistan KRG and the federal authority.
The budget’s article 11 stipulates that the Kurdistan Regional Government (KRG) should abide by its obligations to hand over not less than 250,000 barrels of oil per day (bpd) and an amount of non-oil incomes to the federal authority.
Baghdad is yet to send the first budget transfer to the Kurdistan Region.
“The paragraphs pertaining to the [Kurdistan] Region in the budget law are not applicable, as they were only set to give legal cover for the sale of oil in the [Kurdistan] Region,” al-Hajj Rasheed told the
state media Iraqi News Agency (INA), saying "the defect exists on both sides, Baghdad and Erbil."
The KRG will receive 13.9 percent share from the estimated at 129 Iraqi dinars trillion ($89 billion) budget if it obeys its obligations in the budget law.
Unlike the previous years, the KRG will not get any share if it fails to live up to its commitments.
“The Region’s oil sales are supposed to be assessed to be deducted from the share of [The] Kurdistan [Region] and the rest is sent by Baghdad, but it has not been sent," the federal lawmaker said. "The Region has not sent 50% of its non-oil imports to Baghdad."
He also said that the federal budget has determined the total number of the Region’s public sector employees in the Region at 682,000, while the KRG claims it has 1,200,055 employees.
“The best solution is everyone's commitment to the budget law and its implementation."
Ambiguous wording will open the door to divergent interpretations and mutual accusations of non-compliance between Erbil and Baghdad, UN Secretary-General for Iraq Jeanine Hennis-Plasschaert said on
Tuesday in her quarterly briefing to the United Nations Security Council (UNSC).
“Now, this bodes ill for the future of Baghdad-Erbil relations, and is also worrisome in the context of the upcoming elections: disagreements could easily be exploited to amplify divisions,” she said., noting a long-term constitutional way forward is needed.
“One thing is clear: the all-important Baghdad-Erbil relationship urgently requires sustained, strategic dialogue as well as clear-cut implementation mechanisms. I have to admit: my experiences thus far do not lend themselves to optimism in this regard,” she said.
KRG depends on oil ales for most of its revenue as well as cash transfers from Baghdad to pay public sector employees and conduct infrastructure projects.
The cash-strapped KRG cabinet of Prime Minister Masrour Barzani still unable to pay its wage payroll on in full without cuts following the rise of the global crude oil prices.
Throughout 2020, the KRG missed five months’ worth of salaries to its public servants and paid one in full and slashed others by either eighteen or twenty-one percent citing the COVID-19 pandemic, budget with Baghdad and low oil prices. It paid March and April salaries by 21 percent.