Budget stalemate threatens Kurdistan’s solvency and stability

Baghdad takes a hard line against budget transfers to KRG as negotiations falter, prompting civil servant strikes and imminent protests.
Iraqi Prime Minister Mohammed Shia al-Sudani (right) and KRG Prime Minister Masrour Barzani (left) shake hands at a ceremony in Baghdad on April 4, 2023, to sign a temporary deal for restarting northern oil exports. (Photo credit: Prime Minister's Office)

SULAIMANIYA - The Kurdistan Regional Government (KRG) is descending toward a crisis of insolvency and civil unrest as Iraq's federal government appears increasingly reluctant to make financial transfers under a restrictive new budget law.

Baghdad has sent just one payment of 598 billion Iraqi dinars ($460 million) since the beginning of August, leaving the KRG far short of the revenue needed to pay a public sector wage bill of more than 900 billion dinars per month. Several groups of public employees throughout Sulaimaniya province have already announced strikes and protests against unpaid salaries.

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