Baghdad approves 3-month stop-gap funding for KRG

Three monthly loans of $538 million promise temporary relief to pay civil servant salaries, but unresolved questions loom for Kurdistan's oil industry.
KRG Prime Minister Masrour Barzani (center left) meets with former Iraqi Prime Minister Nouri al-Maliki (center right), the leader of the State of Law coalition, in Baghdad on Sept. 14, 2023. (Photo credit: KRG)

SULAIMANIYA/ERBIL - The Iraqi government has approved a temporary framework for paying civil servants of the Kurdistan Regional Government (KRG), temporarily averting an imminent crisis of insolvency but also leaving major questions unanswered regarding the future of Kurdistan’s oil industry and economic stability.

In a decision Sunday the Cabinet authorized three monthly loans of 700 billion Iraqi dinars ($538 million) starting in September, according to a Cabinet statement.

The decision came on the heels of KRG Prime Minister Masrour Barzani’s Sept. 14 visit to Baghdad to meet with Iraqi Prime Minister Mohammed Shia al-Sudani and a variety of political leaders. Barzani suggested the first tranche of money from Baghdad would be used to fund the July salaries of civil servants, whose paychecks have been delayed by the KRG’s lack of revenue.

"This new deal guarantees that our citizens will receive their salaries in full and on time," Barzani said in a Sept. 17 statement.

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