KRG slams ‘unconstitutional’ changes to Iraqi budget bill

ERBIL, Kurdistan Region - The Kurdistan Regional Government (KRG) on Friday slammed last minute amendments made to the 2023 federal budget bill, saying they were “unconstitutional” and in violation of previous agreements between Erbil and Baghdad.

The Iraqi parliament’s finance committee on Thursday amended two articles of the bill that pertain to the Kurdistan Region, two days before the legislature is scheduled to vote on the budget.

“The changes made in the budget bill by some members of the Iraqi parliament’s finance committee on May 25, 2023 against Kurdistan Region are unconstitutional and against the agreement between the KRG and the federal government,” reads the KRG statement.

The amendments under dispute relate to establishing Iraq’s State Oil Marketing Organisation (SOMO) as the responsible party for selling Kurdistan Region’s oil, decreasing the time for Erbil to pay off its debts from seven years to five, creating an account for Kurdistan Region's oil revenues in the Iraqi central bank, and granting the finance minister the power to authorize the Region's prime minister to make withdrawals from that account. In the previous draft, that power was held by the Iraqi prime minister, Mohammed Shia’ al-Sudani.

The KRG said these changes “infringe” on the rights of the Kurdistan Region. “We will not abide by any other decision except that of the agreement previously made with the government of Mr. Sudani,” it added.

A KRG delegation negotiated the budget with Sudani ahead of the prime minister’s cabinet submitting the bill to parliament for approval.

During the financial committee meeting on Thursday, members from the Kurdistan Democratic Party (KDP) left in protest and said they plan to challenge the changes.

"We will collect signatures from members of the committee to appeal the vote conducted to amend Kurdistan Region's share," KDP MP Khalil Doski told Rudaw, adding that eight signatures are required to redo a vote in the 23-member committee.

Iraqi Parliament Speaker Mohammed al-Halbousi announced on Thursday that the vote on the three-year budget bill will take place on Saturday, more than two months after the cabinet approved it.

The 2023 budget includes a record $152 billion in spending, 12.6 percent of which is allocated for the Kurdistan Region.

Financial matters are a frequent source of tension between Erbil and Baghdad. Erbil says it regularly does not receive its entitled share of federal funds and Baghdad opposes Kurdistan Region’s independent oil sales.

On April 4, the KRG and the federal government signed a temporary deal to resume exporting Kurdistan Region’s oil exports after the flow was halted following a ruling from a Paris-based arbitration court against Turkey facilitating exports through its Ceyhan port. Baghdad has asked Ankara to resume the exports that have been on hold for two months, but the Turkish government has not yet done so.

Iraq did not have a budget law in 2022 amid political uncertainty after the 2021 election. The lack of a budget jeopardized the oil-dependent economy with Baghdad prevented from taking advantage of soaring oil prices following Russia's invasion of Ukraine to combat poverty and bring much-needed economic stability