Re­gion’s bud­get share is lower than ex­pected

KRG seeks eco­nomic in­de­pen­dence

The Kurdish Globe - - EDITORIAL -

The fi­nan­cial pol­icy of Bagh­dad to­wards Kur­dis­tan is in­creas­ingly un­pre­dictable. Ev­ery year Kur­dis­tan Re­gion’s share in the coun­try’s bud­get is de­creas­ing de­spite the steady in­crease in the coun­try’s rev­enues and bud­get. More than 96% of Kur­dis­tan Re­gional Government’s (KRG) rev­enues come from the bud­get share given by Bagh­dad’s cen­tral government. Ac­cord­ing to an agree­ment be­tween Er­bil and Bagh­dad in 2006, cen­tral government has to share 17% of its an­nual bud­get with Kur­dis­tan.

As per Fi­nance and Econ­omy Min­istry of Kur­dis­tan Re­gional Government’s report on the draft bud­get of Kur­dis­tan re­gion for 2013, one of the most im­por­tant strate­gies of KRG in rem­e­dy­ing this prob­lem is to head to­wards es­tab­lish­ing the foun­da­tions for an in­de­pen­dent econ­omy.

Cal­cu­lat­ing Re­gion’s bud­get in Bagh­dad

Kur­dis­tan’s bud­get deficit has low­ered by 17%, but the rea­son there is a deficit is be­cause the Iraqi government is not com­mit­ted to giv­ing all the rights of this re­gion in cal- cu­lat­ing the bud­get. It has al­ways tried to re­duce the bud­get, and this is caus­ing prob­lems within Kur­dis­tan Re­gion. Con­se­quently mem­bers of the Kur­dis­tan par­lia­ment are cur­rently work­ing on the re­gion’s 2013 bud­get to push for eco­nomic in­de­pen­dence.

Bagh­dad’s Fi­nance Min­istry’s bud­get report states that nearly 30% of the 2013 bud­get of Iraq is al­lo­cated to sov­er­eign ex­pen­di­tures, of which KRG is ex­cluded and does not re­ceive any shares. Omar Nu­rad­dini, mem­ber of Kur­dis­tan Par­lia­ment on the Kur­dis­tani Bloc ar­gues that the Iraqi government has in­creased sov­er­eign bud­get in or­der to re­duce KRG’s share in the bud­get.

MP Nu­rad­dini ex­plained that the Kurds have used all means of di­a­logue, and diplo­matic meth­ods to put an end to this sit­u­a­tion, but un­for­tu­nately they have not been suc­cess­ful. As a re­sult of this, the only so­lu­tion that re­mains is to re­turn to domestic re­sources, and start aim­ing for eco­nomic in­de­pen­dence.

KRG au­thor­i­ties have con­tin­u­ously or­ga­nized talks with Bagh­dad at dif­fer­ent lev­els, in an at­tempt to claim their rights, par­tic­u­larly with the bud­get of Pesh­marga. How­ever, Bagh­dad has uni­lat­er­ally de­ter­mined Kur­dis­tan Re­gion’s share in the bud­get with­out in­volv­ing Kurds in set­tling the coun­try’s bud­get pol­icy. Sozan Khala Sha­hab, mem­ber of the Kur­dis­tan Par­lia­ment on the ma­jor­ity Kur­dis­tani Bloc, strongly sup­ports the idea of eco­nomic in­de­pen­dence, and sug­gested that the re­gion should have a plan for se­cur­ing its rights in Iraq’s bud­get.

The main source of Iraq’s rev­enues is the oil pumped from both Iraqi and Kur­dish oil fields on a daily ba­sis, which is ex­ported to world mar­kets. Kur­dis­tan Re­gion has re­cently started to ex­port its oil to Turkey with­out the con­sent of the cen­tral government. It has at­tracted sev­eral oil com­pa­nies to its re­gion be­cause of the sta­bil­ity it of­fers. Safin Diza­yee, the of­fi­cial spokesper­son of the KRG an­nounced that the Min­istry of Nat­u­ral Re­sources of KRG will con­tinue to ex­port its crude oil to Turkey. Diza­yee ex­plained that KRG is do­ing this out of ne­ces­sity be­cause Bagh­dad cen­tral government has not con­sid­ered the re­gion’s 17% share in the bud­get, and con­se­quently they are merely ex­er­cis­ing the re­gion's rights to their ba­sic needs.

Re­duc­tion in the re­gions bud­get share

com­pared to Iraq

Iraq’s fed­eral bud­get has in­creased from its 2012 value of IQD 117,123 bil­lion to IQD 138,424 bil­lion in 2013, which shows an 18.1% in­crease. How­ever, Kur­dis­tan’s share in the bud­get has in­creased by only 14.2% from its 2012 value of IQD 12,604 bil­lion to IQD 16,406 bil­lion. Ac­cord­ing to the Iraqi con­sti­tu­tion, KRG’s bud­get share should in­crease in pro­por­tion to that of Iraq, but this has not been the case in 2013’s bud­get. The rea­son be­ing, the share of the coun­try’s sov­er­eign bud­get has in­creased con­sid­er­ably, and this has pushed the re­gion’s share from 10.7% in 2012 to 10.4% this year.

Mem­bers of Kur­dish par­lia­ment exit the build­ing in this file photo.

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