Iraq and Gulf Analysis

Archive for January 16th, 2011

More Kurdish Protests against the Budget

Posted by Reidar Visser on Sunday, 16 January 2011 15:14

It has been reported that 40 Kurdish deputies withdrew from today’s parliament meeting in protest against the revised version of the budget, now presented for its first official reading.

What the Kurds protest against are the limited changes to the previous version. That was tentatively “read” in the parliament earlier, and the Kurds rightly protested that it had not been duly considered in the financial committee. However, even though the procedural objection of the Kurds was sustained and a provisional financial committee formed, the document that was presented today apparently still contained all the clauses to which the Kurds have made exception. Over and above that, the one major change appears to relate to additional funding for the next Arab summit to be held in Baghdad!

Basically, the Kurds dislike the clause in the budget that obliges them to stick to an oil production target of 150,000 barrels per day. Or rather, they dislike the conditions attached to this item, i.e. firstly that any failure to produce that much will automatically reduce Kurdistan’s share of the national income from 17%, and secondly that the compensation for expenses that will be paid to foreign companies operating in Kurdistan has not been decided. In other words, there could in theory be a repeat of the stalemate seen in 2009 in which no agreement on the validity of the contracts signed by foreign companies operating in Kurdistan is reached – either because the Kurds refuse to submit the contracts to Baghdad for approval (which would signify an admission of a loss of sovereignty in the oil sector) or because the remuneration offered by Baghdad is seen as inadequate by the Kurds or their foreign partners.

The underlying political dynamic that has enabled this situation to emerge consists firstly of the enduring centralistic tendencies in at least some leading personalities in Maliki’s entourage, and secondly the emergence of Iraqiyya as a potential supporter of these tendencies, for example through people like Rafi al-Eisawi whose finance ministry is directly involved in hammering out the budget. More dialogue is expected before a second reading and then the vote itself, perhaps in February. The problem for the Kurds is that Maliki does not need their votes to pass the budget (which he can do with the support of Iraqiyya alone), and unlike in 2010, the Kurdish president, Jalal Talabani does not have the power to veto it.

Posted in Iraqi nationalism, Oil in Iraq | 2 Comments »