Kurdistan Region PM says deal with Baghdad will resume budget payments to KRG

"We overcame this difficult, long-standing obstacle together."
Kurdistan Region Prime Minister Masrour Barzani (Left) and Iraq Prime Minister Mustafa al-Kadhimi in a previous meeting in Erbil. (Photo: KRG/Archive)
Kurdistan Region Prime Minister Masrour Barzani (Left) and Iraq Prime Minister Mustafa al-Kadhimi in a previous meeting in Erbil. (Photo: KRG/Archive)

ERBIL (Kurdistan 24) – The federal government of Iraq will resume budget payments to the Kurdistan Regional Government (KRG) as part of a new deal announced on Monday by Kurdistan Region Prime Minister Masrour Barzani.

"I spoke with Prime Minister Mustafa al-Kadhimi today as part of our ongoing talks and shared commitment to bring certainty to the Erbil-Baghdad relationship," the premier tweeted.

"I’m pleased to announce we’ve reached a deal that will see federal budgetary payments restored to the KRI and backdated to Jan 2021," he added.

Barzani noted that “during our call, I thanked him for his leadership and the federal cabinet for its support for this important milestone. We overcame this difficult, long-standing obstacle together.”

The Iraqi parliament on March 31 approved most of the articles of the federal budget for the year 2021, in particular the Kurdistan Region’s share, after disagreements and negotiations that spanned for months.

Read More: Iraqi parliament approves Kurdistan’s share of 2021 budget

Articles 10 and 11 of the bill relate to the Kurdistan Region and its share of 12.67 percent. The bill calculated revenues from exporting crude oil based on an average price of 65,250 thousand dinars (about $45) and an export rate of 3.250 million barrels per day, including 250 thousand barrels per day from the Kurdistan Region.

However, the Iraqi government has not sent the region’s financial dues since the approval of the 2021 budget, and never delivered monthly allotments for up to a year between 2020 and early 2021. Erbil, in turn, has not sent Baghdad the 250 thousand barrels of oil per day as outlined by the bill.

Read More: Baghdad 'has not sent a single dinar' since passage of 2021 budget: Kurdistan Region

The overall budget amounted to 164.4 trillion dinars, about $112 billion, and a fiscal deficit of 63 trillion dinars, or roughly $43 billion.

On May 10th Kadhimi stated that relations between the federal government and the Kurdistan Regional Government (KRG) are in a "golden era," adding that he has worked with the Kurdish leaders to "bridge an understanding between Baghdad and Erbil."

Read More: Iraq PM says KRG financial dues to arrive soon, proposes talks on disputed territories