KurdistanObserver.com

Kurdistan Region Will Receive 17 Percent of Iraq's National Budget

The Kurdish Globe

By Hawar Kirkuki

December 28, 2006

Kurdistan Regional Government Prime Minister Nechirvan Barzani said that Kurdistan Region will receive 17
percent of Iraq's national budget, and urged the Iraqi government to implement the constitutional article regarding Kirkuk on time.

Describing talks with Baghdad as "successful and fruitful," Barzani told reporters upon his return to Erbil International Airport last Tuesday that the KRG reached an agreement with Iraqi authorities over Kurds' share of the national budget.

However, he added, "The agreement will be put before the Council of Ministers in Baghdad and they will make the final decision on it." 

The KRG has asked the Iraqi government to hand over an alleged sum of $486 million (US) to the Region's treasury. According to previous agreements between the KRG and the Baghdad government, the price of oil per barrel was estimated at $26(US), while oil has been sold at more than $60(US) over the past year.

Kurds demand a share of the Iraqi government's extra oil income.

The Iraqi government has agreed to pay $364 million to the KRG in three phases. The rest of the money has been spent on projects in Kurdistan carried out by Iraqi government ministries, Kurdish officials say.

KRG officials also participated in talks on oil law in Baghdad. Barzani said he held talks with Iraqi Prime Minister Nouri al-Maliki on the issue.

Oil has been a major issue dividing Kurdish and Iraqi authorities in post-war Iraq. KRG says it is constitutionally allowed to drill for oil in areas under its control, but Iraqi oil officials have threatened that KRG's oil deals will not be "valid."

"Most of the oil wells are in southern Iraq, and the oil law allows KRG to talk with companies and make deals for oil production," Barzani said.

"In the future, a law will be issued, according to which each region and part of the country will have its share of oil revenues. We need to have our share of that and we are waiting for that law to be issued."

For most of late November and early December, a Kurdish delegation led by PM Barzani was in Baghdad to hold talks with central authorities over "suspending dossiers."

According to preliminary agreements between the KRG and federal authorities, a representative from the Baghdad government will attend talks between the KRG and oil firms.

Once the KRG reaches a deal with a company to drill for oil in Kurdistan, the contract will be sent to Baghdad for assessment and approval by an Iraqi government committee. The contract will then be returned to the KRG and it will have 60 days to sign it.

"There needs to be some criteria according to which the (oil) contracts are investigated so as to know if there is any corruption in the deals or to what extent the company will implement its obligations," Barzani said.

Another issue on the agenda during the talks between the KRG and Iraqi officials was that of Peshmerga.

The Iraqi government had earlier asked the KRG to send its strong Peshmerga troops to southern and central parts of the country to provide security. However, KRG has been reluctant to accede to that demand so far, saying that some conditions must first be met.

Barzani told reporters that the KRG has asked the Iraqi government to fund Peshmerga forces from its $8 billion 2007 defense budget. But the Iraqi government has not yet agreed to that demand.

"After lots of talks ? we didn't achieve any result. But we insist that Kurdistan Peshmerga must have a share in Iraq's defense budget and we will continue our talks with Baghdad to resolve this issue."

In a closed session of the Iraqi Parliament last month, Mahmoud al-Mashhadani, Iraq's Sunni parliament speaker, had called upon the Kurdish leadership to send Peshmerga forces to Baghdad to protect the lawmakers.

The KRG has approximately 100,000 Peshmerga forces under its command and Iraq's constitution recognizes them as "regional guards."

Disputes over the oil-rich Kirkuk continued in Baghdad as well.

Kurds demand the normalization of the situation in Kirkuk in line with Article 140 of Iraq's national constitution that was ratified last year.

The Iraqi government has formed a committee for implementing the constitutional article, led by the country's Minister of Justice. Barzani reiterated the Kurdish stance that no delay in executing Article 140 is acceptable.

"We insist on implementing the constitutional Article (on Kirkuk) and PM al-Maliki reiterated that this article has to be implemented on time," PM Barzani said.

Iraq's constitution has set a three-step roadmap to normalize the situation in Kirkuk and other areas that were Arabized by the government of former President Saddam Hussein. A referendum on the city's fate is to be held by the end of 2007 on whether it should remain under central government's control or join Kurdistan Region.

The city is populated by Kurds, Turkomans, Arabs, and Christians, and is currently administratively linked to the Iraqi government.