BAGHDAD: A preliminary deal between Iraq and its Kurdish region on long-running financial disputes has reduced a threat to national unity, Oil Minister Adel Abdul Mahdi said yesterday.
Baghdad has long opposed the three-province autonomous region’s independent export of oil, while Kurdish leaders have criticised Iraq for withholding budget payments. In a first move to end the disputes, both sides agreed for Iraq to pay $500m to Kurdistan in exchange for 150,000 barrels of oil per day to the federal government.
The crisis “created a rift that threatens not only economic, security and political interests, but also national unity,” Mahdi said in a statement.
The dispute was harming both sides, with Iraq losing oil revenue and the Kurdish region not receiving federal budget payments, Mahdi added.
The agreement, while not final, “opens the way” to permanent solutions, he said.
UN Iraq envoy Nickolay Mladenov hailed the deal as “a very important first step.”
“The agreement will allow public sector employees in the governorates of Arbil, Dohuk and Sulaimaniyah to begin receiving salaries. It will also allow the Kurdistan Regional Government to resume contribution to the federal budget at a time of national crisis,” he said in a statement.
The deal was reached at a meeting in Kurdish capital Arbil between Mahdi, Kurdish regional premier Nechirvan Barzani and his deputy, Qubad Talabani, the Kurdish government said.
“Barzani will head a delegation to Iraq in the coming days to reach a comprehensive, fair and constitutional solution to all differences,” it added.
The budget dispute has lasted almost a year and had led to a sharp deterioration of relations between the federal government and the Kurdish region. A resolution of the budget feud is an essential step in improving cooperation at a time when both are battling the Islamic State. AFP
