IRAQ BUDGET CUT SPURS KURDISH DISCONTENT

The new Iraqi national budget sparked angry words from the prime minister of the autonomous Kurdish region yesterday, placing further strain on Baghdad’s already fragile relationship with Erbil.

The US$88.5 billion (Dh325bn) budget – the first since Iraq declared victory over ISIL – was passed by parliament on Saturday despite a boycott by Kurdish MPs angry at the diminished share for their region.

“This was not the Iraq we wanted after 2003,” Kurdish Prime Minister Nechirvan Barzani said.

“Stability in Iraq cannot be obtained by ignoring the rights of one component in the country, be it the people of the Kurdistan region, or any other.”

The Iraqi parliament did not specify what percentage of the budget should be allocated to the Kurds, saying only that the region would receive funds proportional to its share of the population in accordance with the Iraqi constitution.

The Kurdistan Regional Government (KRG) has received 17 per cent of the national budget since the fall of former dictator Saddam Hussein, although it stopped receiving funds in 2014 over a dispute with Baghdad over oil revenue.

But a previous draft of this year’s budget set the portion at 12.67 per cent. Baghdad says this figure reflects the Kurdish region’s share of the Iraqi population.

Kurdish MPs have now warned they could boycott the general elections in May.

“The Kurdish blocs in parliament will decide to either challenge the 2018 budget before the Federal Court or to withdraw from the political process in parliament, including the elections,” said Mohsen Saadoun, an Iraqi MP from the Kurdistan Alliance coalition.

The budget is based on projected oil exports of 3.8 million barrels per day – including 250,000 bpd produced in the autonomous Kurdish region – at a price of $46 a barrel, a parliamentary statement said.

The budget states that the KRG must export 250,000 bpd this year and hand over the money it earns to the federal authorities. “If Kurdistan does not hand over the funds, the finance ministry will take it from its part of the budget,” it states.

The spokesman for the Speaker of Iraq’s parliament told The

National that the passing of the budget was a significant accomplishment amid challenges the country has faced.

“The members of parliament voted in the public’s interest and for the country,” Abdel Al Malik Husseini said.

“The budget addressed Kurdish concerns and the government approved the payments of Kurdish civil servants and peshmerga [Kurdish militia fighters] salaries, as well as welfare entitlements.

“Iraq is now at a vital stage – rebuilding. Peaceful coexistence is part of the reconstruction efforts that are needed from all parts of the government.”

Kurdistan must export 250,000 bpd and failure to hand revenue to the federal government will bring budget deductions

Parliament was meant to pass the budget before the start of the financial year in January but all three main blocs – Shiite Arabs, Sunni Arabs and Kurds – had issues with the draft.

Baghdad stopped sending funds to Erbil in 2014 when the KRG began selling oil independently.

The deteriorating relationship between the government and Kurdish region then took a turn for the worse in September last year when the KRG held an independence referendum that backed secession from the rest of Iraq.

The vote was deemed illegal and unconstitutional by the central government, which responded by launching a military operation to recapture Kurdish-held areas contested by both Baghdad and Erbil, including the city of Kirkuk and surrounding oilfields.

This resulted in the Kurdish region once again finding itself financially dependent on Baghdad.