SULAIMANI – Kurdistan Regional Government (KRG) Ministry of Finance and Economy said on Sunday (May 23) that it will slash salary of public sector employees by 21 percent for May amid hopes that the KRG would have put an end to the austerity scheme after it made a deal with Baghdad in late March to secure monthly budget transfers.
The salary distribution will start on Tuesday (April 25) and will wrap up on Monday (May 31), reported by
several local media outlets.
The passage of Iraq’s 2021 Federal Budget Law has provided the
public sector workers with hopes that the KRG will put an end to its salary cuts scheme in effect for more than a year.
Baghdad is yet to send the first budget transfer to the Kurdistan Region.
The KRG officials have said in many occasions that they cannot pay public servants in full without funds from Baghdad. It has not had a budget law since 2013 and budget transfers from Baghdad are vital for filling its coffers.
In 2016, the KRG introduced several austerity measures to return some cash for the public coffer including a halting to promoting publics sectors' ranks and employment. In 2020, it announced salary cuts to public servants earning over 300,000 Iraqi dinars ($205,2) following budget freeze by Baghdad.
The cash-strapped KRG cabinet of Prime Minister Masrour Barzani is still unable to pay its wage bill on in full without cuts following the rise of the global crude oil prices and the devaluation of the Iraqi dinars against the US dollars by over 25 percent.
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.