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KRG does not owe $27 billion in debt, claims Kurdistan Parliament Speaker

KRG PM Barzani responds, says details will be released
Kurdistan Parliament Speaker Rewaz Fayaq (File)
2020-05-26

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SULAIMANI — In order to make a political point about the way in which debt was accumulated over the past several years, the Speaker of the Kurdistan Parliament said on Monday (May 25) that the Kurdistan Regional Government (KRG) could officially not owe $27 billion in debt because it would not have been lawfully authorized to do so.

During a speech on Friday, the Kurdistan Regional Government (KRG) Prime Minister Masrour Barzani said that the government holds $27 billion in debt to highlight its precarious financial position, a figure which shocked many observers and posed questions about how the figure had grown so large.

Speaker Rewaz Fayaq said in a post on her Facebook page that the Kurdistan Regional Government (KRG) could not be carrying any debt because no money has been officially allocated to the servicing of debts since the General Budget Law of 2013.

The KRG has failed to pass a budget since 2014, which has led to accusations that the government has been less than transparent about its finances.

She said that the government, however, does owe significant debts to its public sector workers as a result of the salary withholding scheme, and to contractors.

Fayaq also cited the KRG’s Law No. 7 of 2015, which she said prohibited the government from borrowing more than $5 billion per loan. She added that if the government had in fact done so then those who authorized the loans should be prosecuted.

Later on Tuesday, Kurdistan Regional Government (KRG) Prime Minister Masrour Barzani’s office responded by saying that Barzani has already explained the Region’s debts on several occasions.

“The Prime Minister promised the citizens of the Kurdistan Region clarity,” the statement said, adding that Barzani has requested that the Council of Ministers prepare a detailed report about the Region’s debt to be sent to the Kurdistan Parliament and released publicly.

He also took the opportunity to blame the debt on budget disputes with Baghdad.

In a separate statement to a Kurdistan Democratic Party-affiliated media outlet, the prime minister’s advisor for financial affairs Rebaz Hamlan said that the $27 billion figure was in part made up by the $10 billion that the KRG owes public sector employees from the salary withholding system it put in place during the 2014 financial crisis.

He said that the remainder includes money owed to Turkey, oil and electricity companies, and a loan from an Iraqi bank.

(NRT Digital Media)

This story was updated a 6:07 p.m. EBL