Part of the capital of the Kurdistan region of Iraq, Erbil. Photo: Kurdistan24
Baghdad (IraqiNews.com) – The Iraqi Ministry of Finance has officially transferred 841 billion Iraqi dinars (approximately $641.7 million) to the bank account of the Kurdistan Regional Government’s (KRG) Ministry of Finance and Economy to cover June’s public worker wages.
The federal government in Baghdad withheld 120 billion Iraqi dinars (around $91.5 million) from the allocated amount due to the KRG’s failure to transfer the necessary monthly amount generated from non-oil revenues to Baghdad's treasury.
The KRG earlier indicated that its local non-oil income have dropped dramatically, leaving it unable to fulfill the 120 billion dinar objective and likely requiring Erbil to seek local loans to settle the outstanding wage shortfall.
The payment was made during a time of acute budget stress and internal cash problems in Baghdad, which slowed payroll payments across many sectors.
Under the current revenue-sharing arrangement, which is overseen by the Finance Ministry in Baghdad, the federal government would fund regional payrolls in exchange for a precise percentage of the KRG’s internal income and its oil sales under federal management.
The KRG requested earlier decreasing the monthly payments to 60 billion Iraqi dinars (about $45.78 million) due to internal deficits, but the federal finance ministry rejected the proposal, claiming that it can only be approved by the Iraqi cabinet.