Budget for Iraq in 2016 ... to see the options available


Dr.. Haitham cream flap

Future Center for Strategic Studies

There are major differences between the central government and the Kurdistan Regional Government, and those differences annually reflected on the delay in adoption of the general budget for Iraq, The Government of the territory claimed by (17%) of the general budget and refuses to share the sovereign expenses, and this is what happened in 2015 and because of exposure Iraq financial distress and a large budget deficit General amounted to more than $ 21 billion, leadership of the region refused to participate even in the bear part of the sovereign expenditure in order to reduce the deficit in the public budget, and called for a full share of the budget but demanded be lifted to 25% instead of 17%, and also announced its refusal to bear part of the debt compensation and Iraq announced that it is responsible for that debt and reparations.

And then leadership of the region in sharing agreements entered production away from the authority and direction of the central government, The production and export of oil by the leadership of the region was and remains the focus of a dispute between the central government in Baghdad and the leadership of the Kurdistan region of Iraq, and what has not been resolved will keep the situation in the framework of the relationship is balanced and compelling in The central government deal with the territorial Government and in favor of the territorial Government, initiated the leadership of the region to approve the oil law in June 2007 and endorsed by the Kurdistan Parliament prior to the approval of oil and gas law, the Federal State.

This in itself is a departure from the will of the federal government and impose a fait accompli policy, which is provocative to all the Iraqi people and proceeded to conclude oil contracts independently with international companies, and we find the Kurdistan Regional Government has approved sharing contracts with foreign oil companies as the Kurdistan Region signed 48 partnership contract with companies foreign, and announced the oil map did not include (Arbil, Sulaymaniyah and Dohuk) only, but included the disputed areas in Nineveh and Diyala, Kirkuk, Salah al-Din, as well as signed six other contracts with the US Exxon Mobil giant, most recently on 18 October / October 2011, of which two decades Alqosh and to the regions of Bashiqa within the limits of the province of Nineveh, and the third was held within the confines of the province of Kirkuk.

While the Oil Ministry of the central government entered into service with the oil companies decades and this in itself represents a duplication of Iraq's position on his handling with foreign companies such as Turkish Energy Company and Petroleum Kaiston golf from the United Kingdom and the company Hess Corporation Marathon Americas and company Respol YPF Spanish F M in the Austrian company, and Western Oil Sands of Canada, as well as Exxon Mobil Corp. of America, and began to work in the disputed areas declared new oil map of Kurdistan.

We emphasize here that some companies took interfere with the internal affairs of Iraq and began Government of the Territory override those companies in order to install a fait accompli on the ground and took the endemic companies in disputed areas (Diyala, Kirkuk, Nineveh and Salahuddin) and install the interests of those companies and extended too long to have an impact strong on their governments to support the mother cut off those areas in the future of the Government Center in preparation for the establishment of the state of Kurdistan.

Despite the violation of the provincial government of the Iraqi Constitution Article 111, which states that the ownership of the oil back to the Iraqi people, and the holding of the Iraqi Kurdistan sharing contracts with foreign companies have made a partner in the Iraqi oil company ownership, but the provincial government went on it and held a partnership with international companies Agreements insensitive to the Iraqi constitution, though, so she wanted the central government that the oil produced in the region marketing through Sumo Iraqi company and prepared by the only body authorized to sell Iraqi oil, but the Kurdistan Region refused to do so and also sold the oil away from the Sumo Iraqi company.

In the face of these oil contracts, which is a bone of contention between the central government and the government of the region, but the latter took the calls for increasing the share of the region and raised to 25% instead of 17%.

Every year we are witnessing a delay in the adoption of the general budget because of the position of the representatives of the Kurdistan Region and demanding full their share without participation in expenses sovereign, and therefore we are faced with the problem of chronic and large deficit in the general budget of the Iraqi state and the decline in oil prices dramatically and we have a large requirement must be carried out, whether political or security or military or economic We do not want to happen delay in preparing the 2016 budget and the delay in approval, as happened in previous years.

And it must settle the matter with the Kurdistan Regional Government, rather than that they can be to the loss of time and thus the Iraqi government have to bow to the demands of the region in order to pass and approve the budget and therefore we we left our problems with the Kurdistan without reaching solutions are final and achieved justice for all parties.

Here we propose the formation of a higher committee for early entry negotiations with the Kurdistan Regional Government to settle the issue once and for all and ask the two options:

First option: Delivery of oil produced entirely to the central government, including the 10% provided to the Government of the region by international oil companies:

The production of the Kurdistan region of Iraq, and because of its agreements with international oil companies on the basis of production sharing became produces nearly 600 thousand barrels per day, so if it wants the KRG to maintain the financial engagements with the central government to be delivered product oil to the Iraqi SOMO for the marketing of oil as the entity authorized the marketing of oil as well as a review of all its agreements with the corporate world because it involves a great waste of Iraqi oil wealth and stopped in the granting of new contracts world, especially in the disputed areas in Diyala and Nineveh, Kirkuk and Salahuddin oil companies and thus get a prescribed percentage which is 17% of the general budget.

The second option: to uplift the financial link between the regional government and the central government

That stuck to the region the previous orientations and continuation of the signing of a partnership with foreign companies oil contracts and indifference to the Iraqi constitution and to give new licenses for oil companies the world to invest in disputed areas requires decoding the financial link between the regional government and the central government and adoption of fully on the sale of oil produced in the region revenues private and that he entered In sharing agreements with international oil companies and conducted major operations of exploration for new deposits of oil and is expected to reach its production to more than 1.5 barrels per day.

The third option: Balancer option

This option is based on the idea that retaining the region the oil produced by its agreements with foreign oil companies in exchange for giving the central government part of the product in the region's oil production considering that the oil produced in the region dates back to the Iraqi people as a whole and not for the people of the region only on the basis of the text of Article 111 of the Constitution Iraqi for 2005, and to reduce the region's share of 17% to 12% discount on the grounds that the ratio of the share of the product are offset by the sale of oil revenues in the region.

It is all of the above has to be to enter into urgent negotiations with the Government of the Territory and must be offered options on the representatives of the Territory to leave it to the territory of the freedom to choose among those options is not to be to embarrass the central government at the end of the time of approving the budget, forcing them to respond at the end of the day to the demands of the region's leaders .