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Political disagreements freeze Iraq’s budget bill

Iraq: Parliament finance committee suspended amid budget bill row
4 min read
29 May, 2023
Deep disagreements between the two main Kurdish ruling parties in the Iraqi Kurdistan region is the main cause of delaying a parliamentary vote on Iraq’s budget bill for 2023.
The plenary session of Iraq's new parliament held on January 09, 2022 in Baghdad, Iraq. Following the Oct. 10 parliamentary elections, {Getty}.

Negotiations on Iraq’s budget bill for 2023 have been deferred after the parliament's deputy speaker suspended the legislature's finance committee over legal irregularities the and bypassing of a joint agreement between the Iraqi federal government and the semi-autonomous Kurdistan Regional Government (KRG).

"Our committee has been suspended as per a document from the deputy speaker of Iraq’s parliament, because our committee members are now 24, while according to law the number should not exceed 23," Jamal Kochar, Iraqi lawmaker from the Kurdistan Islamic Union (KIU) bloc and member of the Iraqi parliament's finance committee told The New Arab in a phone interview.

"A political agreement is needed before negotiations on Iraq's budget bill for 2023 resumes. The bill has been stuck at the finance committee because the political agreement between the Iraqi government and the KRG has been violated."

The finance committee on Saturday announced some amendments to the budget bill, including a condition that the 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 per cent from the federal budget.

Another amendment states that the KRG should allocate 10 per cent of its share from the federal budget to pay off salary cuts to its public sector employees. Furthermore, the changes stipulate that Kurdish oil revenues should be deposited "in an account belonging to the Iraqi Finance Ministry, at the Iraqi Central Bank", instead of an international bank account as previously agreed.

The federal government in mid-March sent the draft three-year budget to parliament. The Iraqi federal government and the KRG early in April signed an agreement on resuming oil exports to Turkey, Iraq’s draft budget law and fresh discussions on a new federal oil and gas law.

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Masrour Barzani, the KRG Prime Minister from the ruling Kurdistan Democratic Party (KDP) on Saturday refused the amendments by the finance committee. Shakhawan Abduallh, deputy speaker of the Iraqi parliament from the KDP, has ordered the suspension of the finance committee, citing legal irregularities in the number of the committee’s members. 
Kurdish opposition parties in the Kurdistan region as well as the Patriotic Union of Kurdistan (PUK), a main ruling part and rival to the KDP, have supported the alterations by the finance committee. 

Last week, lawmakers from the KDP and the PUK clashed in the Kurdistan region’s parliament in Erbil over the reactivation of the KRG's electoral commission, after the two rival factions disagreed on renewing the mandate of the commission in order to supervise parliamentary elections scheduled for 18 November.

Sudani, from the Shia community, was chosen to form the new government on 13 October following months of infighting between pro-Iran factions and parties loyal to Iraqi nationalist Shia cleric Moqtada Sadr.

He has the backing of the Coalition for the Administration of the State, which is an alliance of powerful pro-Iran Shia factions, Sunni factions led by al-Halbusi and two key Kurdish parties, the KDP and the PUK. 

The Coalition for the Administration of the State is expected to meet late on Monday to discuss the Kurdistan region’s share and passing the budget bill in the parliament. 

Ankara stopped handling 450,000 bpd of exports from Iraq's north on March 25 after an international tribunal ruled in a nine-year-old dispute that Baghdad was right to insist on overseeing all Iraqi oil exports.

The tribunal run by the International Chamber of Commerce (ICC) ordered Turkey to pay Baghdad damages of US$1.5 billion for allowing the KRG to export oil between 2014 and 2018 without the Iraqi government's consent.

The KRG cut nearly 25 per cent of the salaries of its public sector in 2014, when oil prices plummeted and Kurdish fighters were battling the Islamic State group. In 2016, the KRG halted pay rises to its employees without approval from the region's parliament.