Iraq stepping away from Federalism as centralization lurks

ERBIL (Kurdistan 24) - Iraq made the fateful decision on implementing a federal system in 2005, following the drafting of a new constitution that was approved by a majority of Iraqi voters. However, nearly 19 years later, the full realization of federal principles remains elusive in Iraq.

The issue of salaries and budget allocation and distribution between Iraq and the Kurdistan Region has continued to be a complex challenge for a decade.

While the constitution and laws safeguard the rights of the Kurdistan Region, the federal government's actions often, indeed with political motivations, deviate from federal principles.

A federal system is often touted as a solution for those countries that have diverse nationalities and minorities of different ethnic backgrounds, or that have expansive territories.

At its core, this system relies on the equitable division of powers between federal and regional governments. It is a necessity without which the whole system could collapse.

Government economic policies and the management of critical areas like wages, budgets, customs, and internal revenue fall within the purview of regional governments in federal systems.

In many federal setups, financial structures prioritize revenue-generating regions, allocating 90 percent of generated revenue to them, with the remaining 10 percent channeled back to the federal coffers.

For regions lacking significant revenue sources like oil or minerals, a typical arrangement involves distributing 75 percent of domestic revenues, such as customs duties, to the regions, with the remaining 25 percent allocated to the federal government.

Regarding budgeting and salary matters, the responsibility lies with regional governments. This decentralized approach acknowledges the varying economic conditions and standards of living across different regions, avoiding central management that could lead to injustices.

Moreover, in numerous federal systems, regions wield influence over monetary policy. For instance, in the United States, regional Federal Reserve branch heads sit on the Federal Reserve Board, influencing decisions on interest rates and monetary policy.

The prevailing situation in Iraq reflects a departure from these federal principles, resulting in violations of the constitutional and legal rights of the Kurdistan Region. This stands in stark contrast to the federal systems successfully implemented in many nations worldwide.