BAGHDAD,— The Iraqi government sent 450 billion dinars ($377.4 million) for the month of January to the Kurdistan Region before the federal budget was approved, according to a member of the Council of Representatives’ Finance Committee Ahmad Haji Rashid.
The amount was essentially equal to what the Kurdistan Regional Government (KRG) would have received had the budget been approved earlier.
“The approval of the Iraqi draft federal budget was an important achievement because 68 billion dinars will be sent to the Region to pay the the salaries of Peshmerga, which will come from the federal defense ministry’s budget, rather than from the 454 billion dinars per month approved as the Region’s share [of the overall budget] by Baghdad,” the Kurdistan Islamic Group (KIG) MP told NRT TV on Thursday.
Historically, Peshmerga salaries have been paid out of the Region’s overall share.
Now the salaries will come from a dedicated budget from the federal defense ministry.
According to to Article 10, Section A of the budget, the KRG will be required to send 250,000 barrels of oil per day to the State Organization for Marketing of Oil (SOMO) and to provide transparent accounts of what it is pumping.
In return, it will receive 12.67% of the federal budget.
While Kurdish parties had to accept a lower overall percentage from the 17% it had received in the early part of the decade, they won an important concession in Article 10, Section G whereby public sector workers in the Kurdistan Region and Peshmerga would be protected in the event that there was a breakdown in relations between Baghdad and Erbil.
In the past, when there have been serious disagreements between Baghdad and Erbil, the central government has cut off payments to Kurdish public servants in order to exert leverage in negotiations.
During talks over the current draft budget, Kurdish parties pushed to remove that power.
While Baghdad retains the ability to suspend payments to the KRG in the event of a dispute, salary payments will continue.
The budget includes 128.4 trillion Iraqi dinars ($107.8 billion) worth of expenditures.
Iraq is also expected to post a 22.8 trillion dinar ($19.1 billion) deficit.
The budget was written with the expectation that Iraq will export an average 3.88 million barrels of oil per day (bpd), including 250,000 bpd from the Kurdistan Region, and sell it for $56 per barrel.
In December, Iraq pumped 3.73 million bpd at a price of $52.80 per barrel.
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