Baghdad – Kurdistan Regional Government (KRG) President Nechirwan Barzani left the Iraqi capital on June 20 for the first time since taking office. The situation with the central government, especially the KRG oil exports, the public budget and the controversial city of Kirkuk.
After meeting with Iraqi Prime Minister Adel Abdul Mahdi, Barzani said he agreed to form a joint committee next week to address the outstanding issues underlying the constitution and discuss oil, budget, Peshmerga forces and Article 140 of the Iraq constitution in concern with the census in Kirkuk.
Kurdish oil and KRG salaries are very important on this trip. In about six months, Baghdad has not yet received a share of KRG oil, but the Federal Ministry of Finance continues to pay salaries to KRG employees. The difference raised the ire of Arab parties, suggesting that next year’s budget will depend on economic ties between Baghdad and Erbil.
According to its 2019 budget, the Iraqi government has promised to pay salaries of KRG employees instead of delivering 250,000 barrels of oil per day to the Iraqi National Oil Company. But KRG has recently shied away from oil supplies.
In this regard, Barzani told the Anadolu Agency, after his talks with Baghdad, “I have talked to the prime minister about this and we need to talk more about it. The distribution of 250,000 barrels is not a problem, but there are legal issues, as the reduction of KRG’s share of the 2014 budget has incurred many debts. “
Barzani met with parliamentary speaker Mohammed al-Halbusi on June 20 to discuss the oil issue. Halbusi said in a statement, “We have discussed the financial obligations of KRG, including oil sales, according to the 2019 federal public budget. We address the importance of strengthening relations between the KRG and the federal government, as well as addressing all issues of the spirit of fraternity and national partnership. “
Meanwhile, Barzani has suggested to Halbucci that Erbil will hold financial and energy parliamentary committees to address budget-related issues.
These committees have failed to find solutions for Barzani and Abdul Mahdi, though committees have been formed to resolve the crisis.
Sherwan Dobradani, a member of the Kurdistan Democratic Party, told Al-Monitor that a delegation of multidisciplinary government officials, led by Abdul Mahdi, will visit KRG in the coming weeks and resume discussions on outstanding issues, including oil.
“The results are really positive once the joint committees get their work done,” he said. “It is possible to find solutions that will please all parties.”
According to local media, Barzani has asked Baghdad to sue Ankara. The Iraqi federal government sued Ankara in 2015 seeking damages from the Turkish government of 26 billion for importing Kurdish oil without Baghdad’s permission. Barzani flew straight to Ankara after visiting Baghdad to discuss the oil crisis and many issues, including the Kurdistan Workers’ Party or PKK.
Faleh Ziyadi, a Member of Parliament, told Al-Monitor: “Iraq’s Prime Minister and Federal Finance Ministry are working with Erbil to resolve the issue of oil supplied to Turkey without considering Iraqi laws. Baghdad’s compensation to oil companies operating in KRG or the withdrawal of the lawsuit against Ankara means accepting the rights of the remaining Iraqi elements and the principle of social justice.”
Ziadi, a member of the Finance Committee, suggested that “the consequences of those actions will be severe when demonstrations against the government begin and next year’s budget legislation is passed.”
A source familiar with the talks told Al-Monitor on condition of anonymity: “The Kurdish delegation has suggested to Abdul Mahdi to either renew the Kirkuk agreement between Baghdad and Erbil or allow KRG to export oil until the oil companies are fully compensated.”
Abdul Mahdi, who has good relations with Kurdish parties, said he did not mind giving Erbil time to settle the debt but said he was in a critical position with the Shia alliance, which has so far rejected the solutions. Such solutions include the withdrawal of the Peshmerga and Popular Mobilization Units to Kirkuk. He said this would not be resolved anytime soon.
Kurdistan Alliance leader Mohsen Saadoun told Al-Monitor over the phone: “Activating Kirkuk’s joint security regime is constitutional because it comes from conflict zones, and any delay would make the situation worse.”
Saadoun said, “KRG is keen to work with Abdul Mahdi’s government by referring to the Constitution and previous agreements between the two parties.”
The problems and economic problems of Baghdad and Erbil need a comprehensive solution, and Baghdad is currently slipping some KRG commitments. However, other parties in the federal government may seek political reward, perhaps in support of Abdul Mahdi, who may be criticized and lose his government’s credibility. Otherwise, the crisis will only intensify as the draft budget for next year approaches.