Baghdad and Irbil are still arguing over the national
budget. Prime Minister Nouri al-Maliki cut off money to the Kurdistan Regional
Government (KRG) over its independent oil sales. Then at the start of Premier
Haidar Abadi’s administration a temporary deal was made whereby the Kurds
delivered oil for the central government, but that eventually broke down when
neither side met their obligations. In February, PM Abadi said that Baghdad
would pay KRG salaries in return for Kurdish exports, which Irbil then accepted.
It didn’t appear that either side was serious about their remarks showing the
continued divide between the two.
On February
15, 2016 Prime Minister Haidar Abadi was being interviewed on state-run
Iraqiya TV when he offered a new budget deal to the Kurds. He said that Baghdad
would pay the salaries of Kurdistan’s government workers if it exported oil for
the central government again. Kurdish state employees have not been paid for
months leading to protests across the region. The problem with Abadi’s offer
was that it wasn’t clear that he was serious. Baghdad is facing its own
financial crisis due to the drop in oil prices and has discussed cutting its
own public salaries as a result.
Surprisingly two days later the KRG said that
it accepted Abadi’s proposal. It said that there were 400,000 government
workers in the region, which needed roughly $747 million a month. It then went
on to list all the times that Baghdad broke deals over the budget, and claimed
that it made more in 2014 from their independent oil sales than it received
from the central government. Just like Baghdad it was pretty clear that the KRG
was not serious either. Kurdish Premier Nechirvan Barzani said
as much when he claimed that Abadi’s offer was just political theater. They
only took up his offer in an attempt to embarrass him because they knew that he
could not follow threw.
The central and regional governments are still far apart
over the budget. They are each following their own paths in the face of the
financial crisis caused by the collapse in world oil prices. Both have built up
a massive public sector with hundreds of thousands of workers, which the ruling
parties use as part of their patronage networks to stay in power. Neither has a
large private sector either to get them through this as they have based their
entire economic platforms on their petroleum industries. To make the situation
worse they are doubling down on their energy sectors instead of trying to carry
out any meaningful reforms. The result is that the two will continue to drift
apart on the budget and national policy.
SOURCES
Agence France Presse, “Iraq PM offers cash-strapped Kurds
salaries for oil,” 2/16/16
eKurd, “Iraqi Kurdistan News in brief – February 18, 2016,”
2/18/16
- “Iraqi Kurdistan News in brief – February 20, 2016,”
2/20/16
- “Kurdistan says will accept Iraqi PM’s oil for salaries
deal,” 2/17/16
Osgood, Patrick and Tahir, Rawaz, “New rhetoric underscores
Erbil-Baghdad oil disputes,” Iraq Oil Report, 2/17/16
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