Erbil, Baghdad reach breakthrough agreement on budget implementation

SULAIMANI, Kurdistan Region – The visiting delegation from the Kurdistan Regional Government (KRG) has reached an important agreement with the Iraqi central government regarding the implementation of the budget bill and transferring the Region’s financial entitlements in the budget, Omed Sabah, the head of the Kurdistan Region Council of Ministers’ Diwan, announced the development early Thursday.

The agreement was solidified through the signing of a joint memorandum by Erbil and Baghdad delegations. The KRG delegation’s statement indicated that funds are expected to be promptly delivered to the Kurdistan Region, offering much-needed financial relief.

“A joint memorandum was signed between [Erbil and Baghdad] delegations, and it is expected to immediately deposit funds to the Kurdistan Region,” the delegation said in a statement.

This landmark comes after weeks of discussions between Erbil and Baghdad, following the Iraqi parliament’s approval of the long-awaited budget bill for 2023, 2024, and 2025 on June 12. Notably, the approval process took nearly eight months after the formation of Prime Minister Mohammad Shia al-Sudani’s new government.

The budget, amounting to 198.9 trillion dinars ($153 billion), is the largest in Iraq’s history, with the same allocation planned for the subsequent years 2024 and 2025.

The exact details of the agreement have not been revealed. However, its significance lies in its potential to address the pressing issue of delayed salary payments to civil servants in the Kurdistan Region. As of now, civil servants have not received their salaries for June, a predicament that was further exacerbated by the suspension of the Region’s oil exports.

According to the provisions of the budget bill, the Kurdistan Region is required to market 400,000 barrels of its oil production through the State Organization for Marketing of Oil (SOMO). In return, the Iraqi government must send the Region’s 12.67 percent share of the federal budget.

Despite being stated in the budget bill, the agreement has not yet been implemented, which remains crucial for ensuring the Region’s financial stability.

As both Erbil and Baghdad have now agreed to work together to implement the agreement, the focus now lies on the prompt and effective transfer of funds, which will help alleviate the financial burdens faced by civil servants and pave the way for a brighter economic outlook in the Region.

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