Iraqi PM: Controversial budget law has 'problems and errors'

Iraqi Prime Minister Mustafa Kadhimi said on Tuesday that a controversial law recently passed to manage budget shortfalls includes "problems and errors," indicating that his government may seek to address harsh criticism of the Kurdistan Regional Government (KRG), which argues that it unconstitutionally limits funds allotted to the autonomous region.

ERBIL (Kurdistan 24) – Iraqi Prime Minister Mustafa Kadhimi said on Tuesday that a controversial law recently passed to manage budget shortfalls includes "problems and errors," indicating that his government may seek to address harsh criticism of the Kurdistan Regional Government (KRG), which argues that it improperly limits funds allotted to the autonomous region.

On Nov. 12, the Iraqi parliament approved the bill in the absence of representatives from the Kurdistan Region, who boycotted the session over disagreements about a clause that Kurdish lawmakers described as “unfair.” 

Read More: Iraq’s parliament passes deficit law, despite Kurdish objections

"We have problems with the fiscal deficit law and it involves problems and errors," Kadhimi said during a cabinet meeting, according to a statement released by his office. The statement did not specify whether or not Kadhimi was referring to provisions in the law that have been challenged as unconstitutional by the KRG.

The paragraph which the Kurds oppose stipulates that the region’s regular share of the budget is determined according to ongoing agreements between Baghdad and Erbil regarding oil and non-oil revenues.

"In the event that the region does not comply," it reads, "the expenses will not be paid to the region."

This law cancels such agreements, which require the federal government to send 320 billion IQD ($268 million) per month to cover government salaries over a period of three months and is limited to the last quarter of 2020.

Iraq, including the Kurdistan Region, is facing a severe financial crisis resulting from similar disputes in the past, the outbreak of the coronavirus, and the resulting crash of global oil prices.

"We have been working to maximize state revenues since the beginning of the formation of the government, which must be matched by providing better services to citizens," the statement added, pointing out that "investment is a priority for us, and the government is keen to facilitate all procedures for investors."

Editing by John J. Catherine