KRG has not yet presented draft budget to Kurdistan Parliament, likely extending streak since 2013

PEREGRAF

The Kurdistan Regional Government (KRG) has functioned without a formal budget for nearly a decade and is poised to go into 2023 without meaningful preparations to introduce new budget legislation. As a result, financial planning and spending will remain opaque and arbitrarily decided by the executive.

According to the internal by-laws of the Kurdistan Parliament, the KRG Council of Ministers is expected to present a budget draft in October so that lawmakers can craft and pass a law outlining government expenditures and revenues by the beginning of the new year.

"The budget law allows the government to spend money according to the law," Dr Khalid Haider, an economist and university lecturer, told Peregraf.

"What money exists in the Kurdistan Region and has been spent without a law for years is illegal," he added.

In the years between 1992 and 2013, the Kurdistan Assembly and then the Kurdistan Parliament, passed just ten budget laws due to the Kurdish civil war and political disruption, but the post-2005 stability theoretically have space to conduct routine legislative business.

Since 2013, however, former KRG prime minister Nechirvan Barzani and his successor Masrour Barzani have failed each year to send a budget to parliament, leaving lawmakers unable to conduct even basic oversight on spending.

Other than independent oil sales, the KRG has a number of sources of income, including taxes and customs revenues, but the total raised by the government and how it is spent is not made public, eliciting concerns about transparency.

Moreover, the budget been a source of political contention between the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK). Each has accused the other of not sharing what they raise in their areas of control in a fair way.

"At the start of this term of parliament and during cabinet formation, the priority was the budget bill," Ziad Jabbar, head of the finance committee in the Kurdistan Parliament, told Peregraf.

"But I haven't seen anything so far to give hope that the draft will be sent to parliament," he added.

Jabbar is a member of the PUK, which is one of the three members of the current government along with the KDP and the Change Movement (Gorran).

"The weak point of any government is the lack of a budget law," he argued, adding that there is no justification for the executive’s failure to prepare a draft.

The KRG’s ninth cabinet, which is led by Prime Minister Masrour Barzani, has repeatedly promised to write budget bills. Since it was formed in July 2019, the budget issue has been discussed at dozens of cabinet meetings according to minutes published on the Council of Ministers’ website, but draft budgets for 2020, 2021, and 2022 were never presented.

So far, a budget plan for 2023 has not been forthcoming either, with the Kurdistan Parliament’s internal deadlines for passing a budget fast approaching.

At his latest press conference, KRG Spokesperson Jotiyar Adil claimed that relevant ministries have been tasked with preparing a new budget, but appeared to hedge about whether it would be ready on time by saying that its contours would be determined by the Iraq’s federal budget law. Negotiations in Baghdad have just begun and a draft has not been presented to the federal Council of Representatives.

Peregraf asked Adil for a specific statement on the cabinet’s budget plans, but did not receive a response. Thee KRG Ministry of Finance, other government departments, and KDP MPs on the Kurdistan Parliament’s finance committee did not respond to similar requests.

Haider explained that a clear, public, and accountable budget is critical to the political legitimacy of the KRG and will help with economic development.

"The existence of a budget bill gives confidence to the government and citizens will have be assured. The KRG can implement their plans and revitalize the country's market and economy," the economist said.

This year, Peregraf’s Editor-in-Chief Surkew Mohammed filed freedom of information lawsuits against Prime Minister Barzani, Kurdistan Region President Nechirvan Barzani, and Kurdistan Parliament Speaker Rewaz Fayaq seeking data on how their offices spent public money.

Earlier this month, a court in Sulaimaniyah ruled against Fayaq, saying that the information should be released. A court in Erbil has not yet ruled in the cases against the prime minister and president.

"The existence of a budget law is an important aspect to transparency because the law determines the revenues and expenditures of the Kurdistan Region," Jabbar said. "The lack of a budget law means a lack of transparency and justice."

The PUK lawmaker said that the ministries of finance and planning had prepared a budget draft in 2020, but it was rejected by the KRG Council of Ministers and never sent to the Kurdistan Parliament.

Regional elections scheduled for October were delayed and the government parties in the Kurdistan Parliament voted to extend the legislatures life by a year, which also extended the term of the cabinet.

Gorran MP Said Jalal Muhammed told Peregraf that his party has called on the KDP and the PUK to use this extension to pass a budget and expressed optimism that this would happen.

He explained that since 2013 the KRG has always had an excuse for why it could not pass a budget, usually that the federal government is not sending the Kurdistan Region’s budget share or that oil prices are low.

"But there is now no justification that there should not be a budget law," Muhammed said.

The Kurdistan Parliament’s leadership has officially expressed concern about the prospect of again failing to pass a law.

"Unfortunately, this is the second KRG cabinet, under different pretexts and justifications, that has not fulfilled the task of preparing the budget bill and sending it to parliament," Speaker Fayaq said during a legislative session in September.

Omar Gulpi, a member of the Kurdistan Parliament's finance committee, issued a statement criticizing the government for not sending a draft budget on time.

"With the absence of a budget law, the government is doing all its work in the field of income and spending illegally," Gulpi said.