Government threatens to slash Kurds’ quota of oil royalties

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By Zeena Sami

Azzaman, December 12, 2012

The feud between the central government and its regional counterpart in the Kurdish north is spilling over to finances.

As tensions between the sides are mounting and fears of a military confrontation rising, the government in Baghdad has said it intends to slash Kurdish share of Iraqi oil revenues from 17% to 13%.

The Kurdish regional government in Arbil has been receiving 17 of every 100 dollars Iraq earns from its oil sales in the years since the downfall of former leader Saddam Hussein in 2003.

But the central government in Baghdad now says the percentage is much higher than the percentage of the population of three autonomous Kurdish provinces when compared with the population of the country at large.

Prime Minister Noor al-Maliki and his bloc in parliament have threatened to slash the quota, thereby denying Kurds of billions of dollars.

The Kurds say the move by Maliki is politically motivated and would heighten rather than calm current tensions.

The parliament has yet to vote on the issue but if the present differences are not solved, the government seems adamant to go ahead and cut the Kurdish budget.

Despite criticism from Kurdish deputies in the parliament and their allies, the government is certain to raise enough votes to allow it to go ahead with its move.

The Kurds rely almost solely on their allocations from the central budget. A cut in the Kurdish share from oil revenues is bound to cause deep financial problems for the Kurdish regional government.

Presently, the Kurdish region comprises three provinces – Arbil, Dahouk and Sulaimaniya.

But the Kurds want to add more territory to their semi-independent enclave and now have their own militias in control of the oil-rich Province of Kirkuk and other areas.

The Kurds have fiercely resisted attempts by Maliki to deploy units from the national army in Kirkuk and other territories.