Erbil and Baghdad reach understanding on KRG loans: minister

KRG to provide Baghdad with loans data
Kurdistan Regional Government Minister of Finance and Economy Awat Sheikh Janab speaks in a press conference in Erbil, December 5, 2019.

1526 View

+ -

SULAIMANI — The Kurdistan Regional Government (KRG) has reached an understanding with the federal government about the repayment of debt owed by the KRG, said a senior official on Thursday (December 5).

Erbil has also agreed to hand over “all data and statistics” about loans and payroll lists to the federal government, Minister of Finance and Economy Awat Sheikh Janab said.

“An amount [of money] will be [provided] for the Kurdistan Region’s loans,” he told reporters.

The KRG has reached agreements with the federal government on oil exports and the Region’s share of the federal budget. The KRG said on Tuesday that that Erbil will send 250,000 barrels of oil per day to Baghdad starting next year and in return Baghdad will transfer the Region’s full share of the budget, which currently amounts to 12.67 percent.

The KRG carries a significant amount of debt, owed to both local and foreign banks. Additionally, it owes the Region's public sector employees significant sums from the salary withholding scheme that ended earlier this year.

The contours of the deals that emerged over the last two weeks appear to be similar to the provisions of the 2019 Federal Budget Law, parts of which the KRG ignored by refusing to send oil to Baghdad. It claimed that it could not do so because it had to service its debt.

Secretary of the KRG’s Council of Ministers Amanj Rahim said during the press conference that the agreements would be implemented after the federal budget law was adopted and published in the Official Gazette of Iraq next year.

He added Baghdad would continue to send employees’ salaries every month in 2020 if a federal budget was not adopted by the Council of Representatives, accordance with the 2019 law.

Because of Erbil’s refusal to comply with the 2019 budget, the KRG was facing the prospect of difficult negotiations with Baghdad for the 2020 cycle. These were further complicated by the ongoing anti-establishment protests that have swept central and southern Iraq over the past two months.

(NRT Digital Media)