Iraqi parliament approves record $153 billion budget bill after arduous debate

Iraqi parliament approves record $153 billion budget bill after arduous debate
After nearly two weeks of tense debate, the Iraqi parliament finally passed the country’s three-year budget bill, which includes creating tens of thousands of public sector jobs.
3 min read
13 June, 2023
The Iraqi parliament passed the budget law after a long debate [Getty]

Amid chaos and verbal conflicts, Iraq's parliament late on Monday finally approved a three-year budget bill of nearly 198.9 trillion dinars ($153 billion), the biggest in the country’s history.

The new deal gives Baghdad the upper hand in the issue over northern Iraqi-Kurdish oil and sets out record spending including a burgeoning public payroll.    

It will cover Iraq's budgets for 2023 and the next two years, but is subject to amendments. The law is based on an oil price of $70 per barrel, and the exchange rate for oil revenues in US dollars at 1,300 dinars per dollar.

The law is designed on oil exports at 3.5 million barrels per day (bpd), with an estimated deficit of record 64.36 trillion Iraq dinars.

According to the law, the semi-autonomous Kurdish region must first deliver 400,000 barrels per day (bpd) to the federal authorities, along with non-oil revenues, before it can receive a share of nearly 12 percent of the federal budget.

Ratifying the law was suspended for days due to conflicts between the two main ruling parties in the Kurdistan region, the KDP and the Patriotic Union of Kurdistan (PUK) regarding articles 13 and 14, which are relate to the share of the budget to the Kurds.

Iraqi Prime Minister Mohammed Shia Al-Sudani and Masrour Barzani, the PM of the Kurdistan Regional Government (KRG) from the ruling Kurdistan Democratic Party (KDP) early in April signed an agreement on resuming oil exports to Turkey, the region's share from the federal budget and fresh discussions on a new federal oil and gas law.

The parliament's finance committee has altered the deal so that Kurdish oil revenues can be deposited into an account belonging to the Iraqi finance ministry at the Iraqi Central Bank instead of an international bank account, as previously agreed upon between Barzani and Sudani.

An item in the law, proposed by PUK, gives the green light for any province in the Kurdish region to ask for their share of the federal budget and without referring to the KRG in Erbil.

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The PUK, which mainly runs Sulaimaniyah and Halabja provinces, had previously claimed that the KDP is denying it its fair share of federal and local incomes. The PUK on Monday in a statement described that as a "success" for itself.

However, Masoud Barzani, the president of the KDP in a statement accused some Iraqi and Kurdish parties of trying to weaken the constitutional entity of the Kurdistan region. 

"We stand firmly in the face of any attempts to undermine and eliminate the Kurdistan Region. For us, the Kurdistan region is not just a red line, it is a death line. It is Kurdistan or death," Barzani was quoted as saying by the K24, an outlet close to the KDP.  

In response, Abu Ala Al-Walai, commander of Kataib Sayyid Al-Shuhada, an Iran-backed Iraqi Shia militant group founded in May 2013 tweeted: "Either Iraq or death".

Sudani on Monday congratulated the Iraqi people on the occasion of passing the budget law, vowing his cabinet will review those items that have been amended by the lawmakers in order to see if they are coping with the government’s programme.

The Iraqi supreme federal court has previously ruled that the Iraqi parliament cannot amend the draft budget bill sent by the government if the amendments would create a financial burden on the cabinet.