Economic Advisor Estimates Baghdad Owes the KRG Trillions
28/09/2012 03:04:00 RUDAW
ERBIL, Kurdistan Region – Based on a recent agreement between Baghdad and Erbil, the deferral government has agreed to pay governance costs to the Kurdistan Regional Government (KRG).
KRG officials say this payment by Baghdad is long overdue and that the deferral government owes the Kurdistan Region trillions of Iraqi dinars.
Although the central government is required to pay the KRG's share of sovereign expenses that include 12 sectors, it paid only the expenses of four: food, medicine, census and pilgrimage.
Abdulkhaliq Rafiq, an economic advisor for the KRG Ministry of Finance, said, "From 2005 to 2012, the share of the Kurdistan Region’s governance budget was over 11 trillion dinars.”
He added, “Baghdad does not pay the KRG in cash when it comes to food and medicine. Instead, they buy medicine and food and give Kurdistan its share."
In 2012, 8.95 trillion dinars was allocated for governance expenses. According to the general Iraqi budget law, 17 percent of that amount – or 1.52 trillion dinars -- must be given to the Kurdistan Region.
Rafiq told Rudaw that over the past two years, Baghdad has paid some governance expenses such as purchasing electricity from abroad, pilgrimage and for Kurdistan’s census. “But it did not pay in the previous years and the amount due is big," he said.
On Sept. 13, the KRG agreed to begin exporting oil to the international market again, and Baghdad agreed to pay the expenses of companies involved in this process. This agreement also included a promise from Baghdad to pay the governance expenses that are owed.
Ali Hassan Balo, an advisor to the KRG Ministry of Natural Resources, said, "Baghdad agreed to pay the costs of fuel purchases and consumption at electricity stations in the Kurdistan Region."
According to the data obtained by Rudaw, the money owed by Baghdad to the Kurdistan Region from the governance budget from 2005 to 2012 is equal to 2.68 trillion dinars. And, for the costs of electricity stations and fuel, Baghdad must pay 1.68 trillion dinars.
"We demand our share of this budget every year, but Baghdad refuses to pay,” Rafiq said. “In addition, within the same time period, Baghdad has failed to pay the budget of the Peshmerga forces which is equal to 6.13 trillion dinars.”
He also mentioned the Kurdistan Region’s share in Iraq’s general budget from the past two years, saying, "In the complementary budget of 2011, Kurdistan's share was 772.9 billion dinars which Baghdad has not paid. In 2010, it was 217 billion dinars which Baghdad has not paid.”
According to Rafiq, the total amount owed by Baghdad to the KRG from 2005 until the current year is 9.8 trillion dinars.