Iraqi-Kurdish Relations in Turmoil After Approval of New Budget

The Iraqi parliament approved a new general budget bill with a simple majority on March 4, despite a Kurdish boycott and moderate opposition from Shia and Sunni representatives. The bill will cut the Kurdish Regional Government (KRG)’s expenditure share from 17 percent to 12.5 percent in the coming calendar year. In September 2017, a dispute unfolded between the Iraqi legislature and Kurdish parliament when the latter held an independence referendum. Six months later, according to Al-Monitor, the situation has reached a “crisis stage.” When asked about the KRG’s reduced spending powers, Kurdish Democratic Party leader Massoud Barzani called the budget plan a “clear violation of the principle of partnership.” However, Iraqi officials have dismissed the Kurds’ dissenting opinions. Iraqi Legal Committee officer Bader al-Morshedi told the Badr newspaper that a possible Kurdish appeal has “no legal grounds that could help fulfill their demands, especially [in regaining] the 17 percent share, which was initially granted to them by virtue of a political consensus.” He continued, “The law is above any and every political consensus or agreement.”

Still, Arab News reported that members of the Kurdish parliament are threatening to abandon Iraqi politics. "We boycotted the vote and there are proposals for Kurdistan to withdraw from the entire political process in Iraq over the unfair treatment we have received," explained Kurdish Parliamentary Representative Ashwaq Jaff.

Iraq’s expected 2018 budget is approximately $88 billion. As the primary source of national revenue, Iraq’s oil exports have risen to 3.8 million barrels per day at $46 per barrel, but a fall in global prices has worsened Iraq’s finances, a situation exacerbated by damage to its infrastructure perpetrated by the Islamic State. In the financial sector, the nation’s  “three presidencies,” the Sunni Speaker of the Parliament, the Shi’ite Prime Minister, and the Kurdish president of the KRG, have not been able to reach a mutual solution. 

The developments in the oil market parallel an ongoing political battle over regional resource mining. Shia lawmakers criticized the budget plan’s lack of spending allocation to southern, Shia-dominated oil production and Shia militias, while Sunni representatives sought more funding for Sunni-majority areas retaken from militants, including Mosul. Though the Iraqi parliament congratulated representatives for cooperating on the new budget bill, it appears that Iraq’s three presidencies have yet to agree on the nation’s future.