ERBIL, Kurdistan Region - Iraq on Thursday deposited into the Kurdistan Region’s account the salaries of civil servants for the month of May, the federal finance ministry announced, without specifying the amount of money sent.
“The accounting department of the Ministry of Finance began sending the salaries of civil employees of the Kurdistan Region,” Iraq’s finance ministry said in a statement.
The funds disbursed include those of the “disabled in the directorates of the social protection, care and social development network, the salaries of civil and military retirees, entitlements of the [Ministry of] Martyrs and Anfal Affairs, contracts, and the entitlements of the region’s departments,” the ministry added.
Iraq’s Federal Supreme Court in February ordered the Kurdistan Regional Government (KRG) to submit a breakdown of the monthly budget for the Region’s employees’ salaries to the finance ministry so Baghdad could start paying the Region’s share from the federal budget.
The ruling mandates the Kurdish government to open accounts for its employees at Iraqi state-owned banks - a process dubbed Tawtin (localization) by Baghdad.
On Tuesday, Iraq’s state-owned Trade Bank of Iraq (TBI) issued its first batch of debit cards for Kurdistan Regional Government (KRG) employees as part of the Kurdish government’s initiative MyAccount, aimed to stop paying its employees in cash.
Six private banks are involved in offering digital banking services to the KRG’s over a million public employees. The federal government has shouldered the payment of the employees since the beginning of this year but has yet to agree to continue the process through My Account. Baghdad wants to apply its own banking initiative, Tawtin.
KRG officials claim that the TBI has joined the My Account initiative and that the bank is offering banking services to its employees in the framework of the initiative. The TBI has not confirmed this, instead using the word Tawtin - a process the KRG has campaigned against - in its statement about the process last month.
The KRG has failed to pay the salaries of its civil servants on time and in full for a decade due to a financial crisis which deteriorated when a ruling by a Paris-based arbitration court suspended its export of oil to the international markets over a year ago. The Kurdish government now relies on local income and its controversial share from the federal budget.
Erbil has repeatedly accused Baghdad of not making regular payments of its share of federal funds. Last June, Iraq passed a three-year budget of which the Kurdistan Region's share is 12.6 percent. Baghdad has claimed it has fully implemented its financial obligations to the KRG, including through loans to assist the Region in paying the salaries of its civil servants.
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