New clarification from the Federal Ministry of Finance regarding the settlement of outstanding matters with the region


2020.08.17 – 18:35

Baghdad – People  

On Monday, the Federal Ministry of Finance issued a new clarification on the settlement of pending matters with the Kurdistan region.  

  

The ministry stated in a statement, which “people” received a copy of (August 17, 2020), that it “affirms its commitment to its constitutional duties, economic and financial reform and public financial management, including its obligations towards the Kurdistan Regional Government without the presence of the draft Federal Budget Law for the year 2020”. .  

The Ministry summarized its clarification with the following points:  

– When the government took over in May / 2020, it was decided not to proceed immediately in drafting the budget for the year 2020 until the stability of oil prices in the global markets for the purpose of knowing the most clear revenues, and the ministry also had to compensate for the revenues resulting from the collapse of oil prices and the decrease in demand for it and Iraq’s obligations Under the OPEC Plus agreement.  

  

– The Coronavirus epidemic has led to the emergence of additional demands on state expenditures as well as very large additions to public salaries as a result of previous government commitments in the field of employment and employment, and the Ministry of Finance has to deal with the large number of new graduates who are waiting for jobs from the state in light The instability of oil prices on the world markets and the decline in revenues from it.  

– During the month of May / 2020, the government agreed to transfer (400) billion dinars to the Kurdistan Regional Government in the case of emergency to meet the demands of regional government employees who had not received their salaries for several months, and this funding was subject to entering into discussions with the regional government to resolve all outstanding issues. Between the federal government and the regional government about oil and non-oil revenues.  

– The discussions began in multiple rounds to reach a final agreement in light of the mutual obligations between the two sides and based on the original agreement, the Ministry of Finance did not make any financial transfers to the region since the April payment, however the financial conditions of the Kurdistan Regional Government deteriorated and requests were submitted to the Ministry of Finance again. To provide financing to the Kurdistan Regional Government in order to meet the expenses of the salaries of its employees. A seven-point agreement (attached) between the Prime Minister and the Prime Minister of the region’s government was concluded on 8/15/2020 on the basis of which the Ministry of Finance was invited to finance (320) billion dinars in August / 2020 to the region, and that this amount is basically based. Based on the ministry’s estimates of the region’s share of federal expenditures, and the Ministry of Finance’s estimates of the region’s oil and non-oil imports.  

– The Ministry of Finance considered that the aforementioned amount in light of the current circumstances and within the framework of the goodwill atmosphere that prevailed in the discussions between the federal government and the Kurdistan Regional Government, and based on the fact that the funding request submitted by the General Secretariat of the Council of Ministers, which includes the approval of the legal department therein, falls within the reasonable and will be modified later by increase or decrease In the final calculation between the federal government and the regional government, and based on all that, the Ministry of Finance approved this request on 8/17/2020 and authorized the financing of an amount of (320) billion dinars to the Kurdistan Regional Government for the month of August / 2020.  

  

– The Ministry of Finance stresses the necessity to proceed with the dialogue to implement the attached interim agreement in relation to customs and oil revenues and the region’s commitment to the OPEC Plus agreement and settlement of the debts of the Iraqi Trade Bank (TBI).  

  This must be done within 30 days.  

– Thus, the total funds made by the Ministry of Finance since the beginning of this year are (1,360) trillion dinars through the previous government and (720) billion dinars by the current government, with a total of (2.080) trillion dinars.  

– The Ministry of Finance will present the draft budget law for the year / 2020 before the end of next September of this year, and the funds will be determined to the regional government. The Ministry of Finance: The financial basis for the financing of the region’s government, finally, in the 2021 budget.  

  https://www.nasnews.com/view.php?cat=38070

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