Iraq PM Calls for Investing in High Oil Prices to Support Economic Reform

Iraq’s Prime Minister Mustafa al-Kadhimi underscored the importance of investing in high oil prices to help ease economic burdens on the people.

During a meeting with the parliament’s finance committee on Sunday, Kadhimi said the draft budget submitted by the government aims to achieve economic and financial reform and support vital sectors to help address the majority of problems suffered by the country’s economy for decades.

According to a statement by his media office, the premier stressed the need to activate automation mechanisms, digital trading and the Federal Service Council’s role, in line with the economic reform plan.

He further highlighted the significance of the fair distribution of wealth among all Iraqi regions, in line with the constitution.

He said the country was facing several challenges, adding: “We have been working hard to reform the current situation and put the country’s economy on the right track, in implementation of the government’s agenda that was passed by the House of Representatives.”

The financial committee has held more than 300 meetings within a month with several ministers and senior officials in various sectors to decide on the frameworks that would balance between spending and revenues.

“The committee handed over a copy of the amendments made on the budget to the government,” the statement added, noting that they cover reducing expenditures and maximizing revenues in a practical manner.

The committee stressed it worked on supporting the private sector and taking bold steps to address and support industrial, agricultural and real estate banks to achieve comprehensive development in these sectors.

Meanwhile, disagreements are still ongoing between the federal government in Baghdad and the Kurdistan Regional Government (KRG) on the Kurds’ share in the budget and the mechanism for implementing the oil in exchange for salaries deal.

Deputy Prime Minister of the Kurdistan Region Qubad Talabani said on Sunday that the region is ready to conclude a deal with the federal government to implement all the obligations, provided that the deal is fair and enforceable.

The Kurdistan Region’s share in the federal government’s budget does not exceed five percent after the deduction of sovereign expenses, he noted.

Talabani called for re-establishing Iraqi state-oil marketer SOMO in a new way that guarantees the transparent management of selling and marketing oil, including the region’s oil.

“We have been in contact with Baghdad for nearly a year, and our current talks are different and numerous and focused on many issues,” he said.

Head of the Kurdistan Democratic Party’s (KDP) bloc in the Iraqi parliament Vian Sabri told Asharq Al-Awsat that negotiations will continue a final agreement on the region’s share is reached, according to the constitution and regulations.

“Our position is to support the region’s commitment to deliver 250,000 barrels of oil per day to the federal government and half of the non-oil revenues.”

“In return, the federal government will commit to paying the region’s dues according to their legal deadlines,” she stressed.