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SULAIMANI — As part of a temporary budget deal agreed last month, the federal government is expected to transfer 320 billion Iraqi dinars ($269 million) to the Kurdistan Regional Government (KRG) between September 24 and 27.

Citing sources with knowledge of the process, NRT reporter in Baghdad Omed Muhammad said that the federal government will begin paying monthly salaries to its public sector workers on Wednesday and the transfer to Erbil will be made shortly thereafter.

Locked in a long-running disagreement over the federal budget, both Erbil and Baghdad are facing budget shortfalls because of low oil prices and the negative economic impact of the coronavirus, which has caused some delays in processing payments.

On September 21, the KRG Minister of State Khalid Shwani complained that the federal government had not yet sent the transfer.

In April, Baghdad cut off all budget transfers to Erbil after the latter failed to send any oil to the federal government, as it was required to under the 2019 federal budget law. The move put huge financial pressure on the KRG, which repeatedly delayed and then cut public sector salaries.

The two sides reached a temporary agreement in early August where Baghdad would send 320 billion Iraqi dinars per month, in return for bringing customs procedures at the Region’s international border crossings under federal control.

Despite the deal, more than a month has passed since the KRG paid its own public servants, with many worrying that the KRG will again delay salary payments.

It is estimated that the KRG requires 894 billion Iraqi dinars ($749.3 million) to pay its public sector wage bill, about half of which, 452 billion dinars, had been supplied by Baghdad before April.

The August deal helps to address that, but by no means does so fully.

Beyond what it owes to its people, the KRG also carries significant foreign and domestic debt and has delayed payments to international oil companies operating in the Kurdistan Region.

(NRT Digital Media)


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