Funding the north with the oil of the south is another face of political corruption in Iraq

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Funding the north with the oil of the south is another face of political corruption in Iraq

 

 

Sunday 16 August 2021

 

Dr.. Haider Hussein Al Tohme  https://annabaa.org/arabic/economicarticles/28130

 

The oil file has been a pivotal factor in the fluctuation in the stability of relations between Baghdad and the Kurdistan Region for years, and the regional government has used its political relationship with the ruling parties in Baghdad as a pressure card to achieve economic gains and acquire sovereign revenues for the benefit of the Kurdistan Regional Government, as well as raising the region’s share in the federal budget from (12) %) to (17%) in the government of Nuri al-Maliki in a political deal that was passed at the expense of the stricken southern governorates.

As for Haider al-Abadi’s government, the scene has changed a lot after the government returned the region’s share to approximately 12% of the federal budget, and obligated the region to hand over oil and sovereign revenues in exchange for releasing the region’s share of the budget. The federal budgets of the Haider al-Abadi government included a binding paragraph that stated: “In the event that any party (the federal government, the Kurdistan Regional Government) does not fulfill its oil and financial obligations agreed upon in the budget, the other party is also not bound by its oil or financial obligations.” Haider al-Abadi's government has committed to the text of this article, despite the Kurds' acquisition of the finance portfolio for a period of time.

In 2018, the regional government supported former Prime Minister Adel Abdul-Mahdi with the aim of refinancing the region from the federal budget without oil or financial compensation. Al-Mahdi in financing the region’s share of the federal budget for 2019, despite the text of Article (10/Second/A) which stipulates that the region hand over the agreed share of (250) thousand barrels per day to SOMO, which was not achieved throughout 2019, despite the regional government’s receipt All its share of the federal budget, which amounts to more than (9) trillion dinars, without the delivery of oil and non-oil revenues to the region.

At that time, the federal government ignored the text of Article (10/Second/C) in the Federal Budget Law for the year 2019 in force by deducting the amount of damage caused by the Kurdistan Region’s failure to deliver the agreed quantity (250 barrels per day), from the region’s share in the 2019 budget. In addition to the Kurdistan Regional Government’s violation of the text of Article (10/Second/D) in the Federal Budget Law for the year 2019 in force, which obliges the Kurdistan Regional Government, when there is any increase in the exported oil quantities, to deposit the actually earned revenues to the account of the state’s public treasury, and the region’s exports have exceeded (500) thousand barrels per day in 2019, according to the statement of the Federal Oil Ministry.

In the middle of the year 2020, after Mustafa Al-Kazemi obtained the support of the Kurds in forming a new government, Al-Kazemi immediately took the initiative in taking power in Iraq in the month of May 2020 to pay an amount of (400) billion dinars to the Kurdistan Regional Government as a goodwill gesture to resume negotiations on the existing differences, despite the difficulty The financial situation in the state treasury at the time, and Iraq's loss of two-thirds of its oil revenues due to the collapse of oil prices in global markets. The Ministry of Finance stipulated in Article (2) of the financing letter sent to the region that a final settlement should be reached between the center and the region within a maximum date of (30) days from the date of depositing an amount of (400) billion into the account of the regional government.

At the beginning of August of last year, the Ministry of Finance evaluated the results of the conduct of the commissioners between the two parties seriously and clearly, noting that the financial payments sent to the Ministry of Finance of the Kurdistan Region did not reach the beneficiaries, in addition to receiving requests signed by tens of thousands of employees of the region to link their salaries through banking mechanisms to the government. Federal directly. In addition to the Kurdistan Regional Government's refusal to provide the financial revenues obtained from the customs ports, which is in violation of the principle of partnership contained in Article 114 (first) of the Constitution to ensure control over the border crossings in the region.

The irony is that the aforementioned Ministry of Finance statement on the progress of negotiations with the Kurdistan Region held the latter responsible for obstructing reaching a fair agreement between the two parties consistent with the constitution and the law, despite the region receiving an amount of (400) billion dinars, but the statement of the Ministry of Finance was met with a letter directed by the General Secretariat of the Council The Ministers obligate the Minister of Finance to disburse the amount of (320) billion dinars to the account of the Kurdistan Regional Government. The aforementioned book reveals a number of manifestations, the most important of which is the submission of the Baghdad government to political pressures at the expense of the national interest, and the continued acquisition of large sums by the Kurdistan Regional Government of the federal budget without a significant return.

Despite the repeated reneging of promises and pledges that the Kurds make annually to acquire a share of the federal budget in exchange for promises only, the Federal Budget Law for 2021 was also disappointing after including the same mined texts in the new budget, due to a political deal between the leaders of the blocs and the three presidencies that took place in early January The first 2020. The draft budget for the year 2021 included many items that restore the same biased scene in favor of the North at the expense of the resources and interests of the South, as follows:

1- (Article 11/second) in the 2021 budget did not refer to the mechanism for settling accounts between the center and the region if the latter waived its obligations, and a paragraph (and the accounting settlement between the center and the region is done monthly) should have been added to the text of the aforementioned article, for the purpose of settling accounts on a monthly basis and deduction The amount of damage resulting from the region's non-compliance for one month of the financing due for the following month.

2- The draft budget did not mention the fate of the federal government’s accumulated debts owed by the region due to the latter’s failure to implement its financial obligations, which should add an article obligating the region to pay its debts to Baghdad due to the receipt of huge financial payments free of charge during the past years, the latest of which is the receipt of nearly (10) trillion dollars Dinars in 2019 without delivering a single barrel of oil to the central government, contrary to the text of the 2019 budget law.

3- The following paragraph should have been added at the end of Article (11) regarding the region ((in the event that any party (the federal government, the Kurdistan Regional Government) does not fulfill its oil and financial obligations agreed upon in this budget, the other party is also not bound by its oil or financial obligations. .))

North oil is above the law

The National Oil Marketing Company "SOMO", at the end of last July, calculated the total revenues and exports of crude oil during the first half of this year. Somo indicated that the sales of the Kurdistan region, which took place outside the exports of the National Oil Marketing Company, and exported directly by the region, amounted to about (77) million barrels, while its total revenues, if calculated at the export price of a barrel of Kirkuk crude oil by a marketing company, amounted to about (77) million barrels. Oil is about 4.8 million US dollars.

Despite the marathon negotiations prior to approving the budget and the agreements it included at the time, which were included in the budget’s strength, stipulating that the region would deliver an amount of (250) thousand barrels per day of oil, and half of the other financial revenues to the federal government, in return for obtaining a percentage of (12.6%). However, the region did not deliver a single barrel of oil to Baghdad, nor did it transfer the values of oil or non-oil revenues to the federal treasury, as stipulated in the agreement.

According to members of the Iraqi Council of Representatives, Baghdad agreed to send another financial payment of (200) billion dinars to the Kurdistan Region. After the first payment was sent last month. It is expected that the current government will continue to send monthly payments to the Kurdistan Regional Government without legal cover and in violation of the provisions of the Federal Budget Law, which obliges the region to deliver oil revenues of at least (250) thousand barrels per day, in addition to half of the non-oil revenues generated in the ports of northern Iraq. In return for handing over the region's share in the federal budget.

The continuation of the current political approach of the ruling power parties, which is based on the bias of the regional government and the bartering of power and political gains for the wealth and rights of the Iraqi governorates, and the southern ones in particular, is one of the most prominent and heinous files of political corruption in Iraq. The continuation of these practices portends the division of the country’s unity and the possibility of the independence of the southern oil-producing governorates, especially with the weak service reality, the deterioration of infrastructure, and the spread of poverty and deprivation rates in these governorates, in return for the northern governorates enjoying the wealth of the north and south at the same time.

 

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