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ERBIL, Kurdistan Region - The White House on Monday welcomed the recent dialogue between Erbil and Baghdad which resulted in the Iraqi government releasing funds to facilitate the much-needed payment of the Kurdistan Region’s civil servants.
“We are encouraged by the Government of Iraq’s decision to release additional funds to the KRG to help ensure civil servants receive their salaries and to promote stability and economic growth,” Jake Sullivan, US National Security Advisor to President Joe Biden said in a statement on Monday.
Iraq’s Council of Ministers on Sunday agreed to send the Kurdistan Regional Government (KRG) a loan of 2.1 trillion Iraqi dinars to pay the salaries of its civil servants. The amount will be paid in three equal installments and will cover the salaries of September, October, and November.
The KRG’s share in the 2023 federal budget will then be used to pay back the loans. If the share is not enough to cover the loans, Erbil’s dues will be settled using its allocations within the 2024 budget.
"We welcome the constructive dialogue conducted last week between the Government of Iraq and the Kurdistan Regional Government (KRG) meant to resolve outstanding issues in a manner consistent with the Iraqi constitution," Sullivan added.
On Sunday, the KRG announced that the first installment of 700 billion Iraqi dinars will be used to pay the July salaries of the Region's employees who have not yet received their wages for the past two months.
The Iraqi government made the decision after a delegation led by Kurdistan Region Prime Minister Masrour Barzani went to Baghdad to lobby for the Region’s financial entitlements.
Iraq passed its highly contentious budget bill for the years 2023, 2024, and 2025 in June, which includes a record $152 billion in spending, of which the Kurdistan Region’s share is 12.6.
However, budget issues between the two governments have not been resolved as Erbil blamed Baghdad for not sending the required funds to pay the Region’s civil servants.
Economic woes in the Kurdistan Region have worsened in recent months after Turkey suspended the flow of Kurdish crude oil through the Iraq-Turkey pipeline to its Ceyhan port in March following a ruling from a Paris arbitration court, causing the KRG billions of dollars in losses.
“The United States will continue to work with all relevant parties to expeditiously reopen the Iraq-Turkey pipeline as soon as possible,” the White House statement said.
The Kurdish government has failed to pay its civil servants on time and in full for nearly a decade due to the financial crisis.
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