The Kurdistan Regional Government (KRG) has once again been complaining that Baghdad is not sending its full budget payments. That meant Kurdish government workers were not getting their salaries and protests by them have continued. This crisis has been going on for several years now.
On March 18 the KRG said that it was only receiving around 59% of its monthly budget payments from Baghdad. In January for instance, Kurdistan said it needed 900 billion dinars a month for public salaries and only received 618 billion from the central government. That meant many government workers such as the peshmerga along with pensioners were not getting paid.
This dispute has been going on since 2012 which started over the KRG’s independent oil strategy. That year the region failed to meet an export quota to receive its monthly payments. That was because the KRG believed that it could independently sell oil to Turkey and bypass Baghdad. Eventually the central government refused to send any money to the region as retribution. Then the two sides would try to reconcile with a new budget agreement but the KRG still never met its obligations. The KRG’s oil plans did not work out and it fell into a larger and larger debt which it is still facing today.
Things got worse in 2023 when Turkey lost a court case to Iraq over allowing the Kurds to use the oil pipeline between the two countries. Ankara shut down the pipeline in retaliation and it has not re-opened yet. That deprived the Kurds of their major source of revenue and made them even more dependent upon Baghdad for money. The two sides are still arguing over the details however.
The latest dispute is over the central government’s demand that Kurdistan turn over its salary roles so it can confirm how much money to send the region. This requirement was confirmed by a decision by the Federal Supreme Court in February. The KRG has refused because just like Baghdad there are thousands of ghost employees and workers receiving more than one salaries. Partial data that has already been received highlights this problem with things like men being listed as divorced women to collect pensions.
Analysts have pointed out that the KRG is collecting money from a number of sources that could be used for salaries. Al Aalem reported that Kurdistan receives over 400 billion dinars a month from tariffs and taxes, and it also smuggles oil to Turkey. International donors also provide money to pay the peshmerga. The problem is that most of this money is taken by corrupt government officials and the two main ruling parties so it is not available for salaries.
The real victim in this process isn’t the KRG but its workers. Some such as teachers in Sulaymaniya have been on strike for months over not being paid and thousands of students have not been going to school as a result. The educators have been joined by several other government offices and this has spread across the province.
Although the specific details have changed Kurdistan finds itself in the same situation as it has been for the last 12 years. It’s finances are a wreck and it continues to argue with Baghdad over the budget. Neither side is willing to budge so Kurdish civil servants will suffer the consequences.
SOURCES
Al Aalem, “Paralysis of life threatens Sulaymaniya again .. Baghdad sends money and Irbil: We have a deficit,” 3/18/24
- “The strike expands …the region’s salary crisis worsens, and solutions are lost,” 2/17/24
eKurd, “Iraqi court orders federal gov’t to pay Kurdistan public servants,” 2/21/24
Hussein, Mohammed, Tahir, Rawaz, Mohammed, Araz and Ali, Amir,” Two-month teachers’ strike underscores severity of Baghdad-Erbil problems,” Iraq Oil Report, 11/21/23
Al Rafidain, “Erbil: After A Month Of Delay .. The Baghdad Government Will Pay Only 59 Percent Of Salaries,” 3/18/24
Rudaw, “Baghdad to pay 618 billion dinars for KRG salaries,” 1/14/24
- “Iraq pays February salaries of Kurdistan Region’s civil servants: Ministry,” 3/12/24
- “KRG to begin distributing salaries Friday,” 2/1/24
- “PM Sudani ‘ready’ to pay KRG salaries directly: Office,” 11/22/23
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