SULAIMANI (ESTA) — The Kurdistan Regional Government (KRG) will commit to the federal budget law passed by the Iraqi parliament late on Wednesday, Deputy Prime Minister Qubad Talabani said.
The Iraqi Council of Representatives approved the federal budget of 130 trillion Iraqi dinars ($89.65 billion) as the country wrestles with an economic and financial crisis due to low crude prices.
The budget deficit is estimated at 28.7 trillion Iraqi dinars ($19.79 billion).
“The budget was approved. We hope it returns economic stability to Iraq and improves the financial situation in Iraq and the Kurdistan Region,” Talabani said in a video speech.
“This result is not the end of our road, but it is the beginning of a new path. We hope it improves the relations between the Region and Baghdad, and turns over a new page between both sides,” he added.
“We ensure all sides that we will immediately abide the budget. We will inform the ministries to get in touch with the central government and express readiness to implement the budget [law].”
After months of wrangling, the KRG and the central government reached an agreement on thorny issues, including oil and non-oil revenues.
Under the 2021 budget law, the Kurdistan Region will be committed to produce 460,000 barrels of oil per day (bpd).
After deducting expenses for production operations in the Region, transport of oil and the domestic consumption of crude oil, the KRG must hand over to Baghdad revenues generated from regional oil exports of 250,000 bpd, according to Iraq’s SOMO pricing, as well as 50 percent of non-oil revenue.
The Kurdistan Region, in return, will receive its share of the budget, which is set at 12.67%.
Prime Minister Masrour Barzani praised the approval of the budget in a statement and said it helped restore a “sliver of hope” for better relations with the federal government.
Kurdistan Region President Nechirvan Barzani also said the budget law could become a “good start and a motive” to resolve other issues between Erbil and Baghdad.
“We hope all sides will abide by the law. The implementation of the law will strengthen the political process and coexistence and secure citizenship rights for all. It opens a door for productive talks for all sides,” he added.
Iraqi Prime Minister Mustafa al-Kadhimi also said the approval of the budget was an “important step forward” and evidence that “solidarity work brings stability and progress”.
“Clashes and crises will not take us to a result. Let’s work to serve our people,” he added.
Shia lawmaker Wafa al-Shimmari said the budget’s approval would “help stabilize Iraq’s economy, draw investments and pave the way for the country’s rebuilding”, according to Reuters.
The 2021 budget set an oil price of $45 a barrel and expected oil exports of 3.25 million bpd, including 250,000 bpd from the Kurdistan Region, according to the budget law.
Iraq relies on oil to fund 97% of its state budget, and its commitment to an OPEC+ deal on reducing oil output has squeezed the finances of a government struggling to tackle the fallout from years of war and rampant corruption.
