Iraq won’t pay KRG full amount needed for salaries: Sudani

ERBIL, Kurdistan Region - Iraq’s Prime Minister Mohammed Shia’ al-Sudani on Wednesday told lawmakers that the Kurdistan Regional Government (KRG) will not receive the full amount of money it needs to pay its civil servant salaries, attributing the shortfall to insufficient funds in the Kurdish government’s share of the federal budget.

“Sudani informed us that they will only send the 760 billion dinars [about $580 million]” to Erbil for the remaining months of this year, Kurdish lawmaker in Baghdad Sabah Habib told Rudaw.

Baghdad has already allocated 761 billion dinars for the October salaries of the KRG's civil servants. However, the Kurdish government has not yet decided to accept the payment, holding out hope that its efforts to secure the full amount will succeed.

The KRG has said that it needs over 900 billion dinars (about $687 million) monthly to cover its payroll.

The Iraqi parliament on Wednesday hosted Sudani to review the progress made by his cabinet since taking office over two years ago.

Kurdish legislator in Baghdad Soran Omar, who attended the session, said in a Facebook post that, in response to his inquiry about delays in the salaries of the KRG civil servant, Sudani said that his cabinet has complied with the decision of the Iraqi Federal Court and the Kurdistan Region’s share of the federal budget.

He was referring to a February ruling by the top court that ordered the federal government to pay the salaries of the KRG civil servants and for Erbil to hand over all oil and non-oil revenues to Baghdad.

Wednesday’s parliamentary session was closed to the media, but a video circulating on social media shows Sudani telling the lawmakers that the federal budget allocation for the Kurdistan Region’s civil servant salaries has been depleted. He added that increasing the funds would require a reallocation from another budget section.

Article 12 of Iraq’s three-year federal budget bill, passed in June 2023, obliges the KRG to hand over the non-oil revenues to the federal government, in return for the Region’s share in the budget which is 12.6 percent.

KRG has said it pays half of its local income to Baghdad.

In the video, Sudani suggests that the resumption of the Kurdistan Region’s oil exports, which have been stalled since March last year, could help resolve ongoing issues, saying, “We might find a solution.”

Sudani has sent a bill to the Iraqi parliament seeking the resumption of KRG’s oil exports by increasing the rate for the production and transportation of a barrel of oil from the Kurdistan Region by nearly $10. The first reading has been given to the bill.

Sudani emphasized that there is no “political stance” preventing Baghdad from paying salaries to the Kurdistan Region.

However, he underscored the need for the KRG to comply with its obligations, particularly regarding the handover of non-oil revenues to the federal government, adding that Erbil has failed to comply so far.

Oil exports from the Kurdistan Region through the Iraq-Turkey pipeline were suspended after a ruling by a Paris-based arbitration court ruled in favor of Baghdad over Ankara, saying the latter had breached a 1973 pipeline agreement by allowing Erbil to export oil independently since 2014.

Before the halt, Erbil exported around 400,000 barrels per day through the pipeline, in addition to some 75,000 barrels of Kirkuk’s oil.