Iraq's Kurdistan Regional Government (KRG) faces financial crisis with $17B debt
by Anadolu Agency
ERBIL, IraqApr 11, 2015 - 12:00 am GMT+3
by Anadolu Agency
Apr 11, 2015 12:00 am
Iraq's Kurdistan Regional Government (KRG) faces an internal debt of $17 billion and does not have money to pay even the salaries of its civil servants, a parliamentary committee official told The Anadolu Agency on Friday.
The debt includes more than two months' salaries of civil servants of $1.25 billion, governorship's debt of $1.1 billion and private banks' debt of $10 billion. Additionally, there is debt owed to oil companies that pushes the total debt up to $17 billion, Ali Muhammed Salih, deputy head of the regional parliament's economy and finance committee, said.
Recently, the regional government borrowed $500 million from Turkey to deal with its financial crisis and expects another $500 million from it soon. The money given by Turkey has to be paid back in the future, Salih said.
Salih stated that the monthly payment of $400 million given under a deal by the central government in Baghdad was not even enough to pay salaries of civil servants in the Kurdistan Regional Government in Erbil.
The monthly payout is given from Iraq's national budget as part of the Dec. 2 oil deal with Baghdad.
According to the agreement reached by both parties, the regional government would export 250,000 barrels of oil per day and the Kirkuk province would provide 300,000 barrels per day under the federal government's supervision. In return, the federal government in Baghdad would provide 17 percent of its national budget to Erbil, which equals some $1 billion every month.
However, the sides could not find common ground until recently as Baghdad claimed that the regional government had not been delivering on its promise.