Differences deepen between Baghdad and Kurds in north over budget and oil exports

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By Adel Kadhem

Azzaman, May 8, 2014

Tensions have intensified between the regional Kurdish government in the north and the central government in Baghdad even though the country is waiting for the results of the last month’s general elections.

The sides have never been so apart since the 2003 U.S.-led invasion Iraq, which the Kurds utilized to boost their autonomy and decide on almost all matters concerning their three provinces of Dahouk, Arbil and Sulaimaniya without recourse to Baghdad.

In the years since the 2003 invasion, the Kurds proceeded with plans to develop oil fields within and occasionally outside their autonomous region, striking deals with foreign firms and developing oil fields which currently have an output capacity of 400,000 barrels a day.

Nationally, they worked hard through their bloc of 63 deputies representing different Kurdish factions out of 325-member parliament, giving them the power to influence the make-up of successive Iraqi governments.

Through alliances and influence, the Kurds have been getting 17% annually of Iraq’s oil royalties, earning them up to 20 billion dollars a year, while the population of their region is estimated at 10-12 percent of Iraq’s.

The Kurds developed their own oil fields and started refining and exporting oil on their own, boosting their economy and adding billions more to their coffers.

Their oil policy and access to a large percentage of national oil revenues have angered the government, which currently garners support across the disparate non-Kurdish political spectrum in Iraq vis-à-vis its Kurdish policies.

So far the Kurds had on their side the National Iraqi Alliance, which fields up to 70 deputies in the parliament but the group has expressed disappointment at Kurdish policies and is reported to be willing to support the government to slash Kurdish share of national oil revenues to about 12%.

Abdulhussein al-Yasseri, a member of the parliament’s Finance Commission, said National Iraqi Alliance deputies, who broadly oppose Prime Minister Noori al-Maliki’s government, would support a vote on the budget that drastically reduces the Kurdish share of the oil revenues.

The passage of 2014 budget has been delayed for more than four months on the backdrop of differences between the government in Baghdad and the Kurdish region in the north.

The budget could not be approved because the government had so far failed to collect enough votes.

Yasseri said his group would even support the government in its demand to place oil output and exports originating in the Kurdish region under the control of Baghdad and that all oil revenues from whichever region in the country must be funneled to the Central Bank.