SULAIMANI (ESTA) — The Patriotic Union of Kurdistan (PUK) leadership said on Thursday the approval of the federal budget bill for 2021 was an “important start” to end disputes between Erbil and Baghdad.
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 PUK leadership hoped the approval of the budget bill will improve the financial and economic situation in Iraq and the lives of people in the Kurdistan Region.
“The approval of the budget [bill] is an important start to end disputes and a motive to resolve other issues,” the PUK leadership said in a statement.
“The budget’s approval has made it clear for all sides that joint work and negotiations serve our nation’s case more than disputes and conflict,” it added.
“Kurdistan’s people are tired of years of economic instability and look forward to a future when their rights and financial entitlements are secured and have a steady livelihood.”
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 13.9%.
Kurdish Prime Minister Masrour Barzani praised the approval of the budget in a statement on Wednesday and said it helped restore a “sliver of hope” for better relations with the federal government.
Deputy Prime Minister Qubad Talabani said the Kurdistan Regional Government (KRG) would “immediately” abide by the federal budget law.
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.
