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People celebrate to show their support for the upcoming September 25th independence referendum in Kirkuk, Iraq September 11, 2017. REUTERS/Ako Rasheed - RC1A4278AD30

Baghdad will cut Erbil’s share in 2018 federal budget

Iraq’s cabinet proposed on Sunday to slash the Kurdish share of the country’s revenue in the 2018 federal budget, a move that Kurdish officials said was aimed to further punish them for a Sept. 25 referendum on independence.

If approved, the budget would further damage the relationship between Baghdad and Erbil — the semi-autonomous region’s capital — already at boiling point after the central government launched a military offensive last month that swiftly recaptured the oil-rich city of Kirkuk.

A preliminary draft document seen by Reuters and confirmed by three lawmakers and two Iraqi government officials shows the Kurdistan region’s share of the 2018 budget trimmed to 12.6 percent, down from the 17 percent the region has traditionally been entitled to since the fall of Saddam Hussein.

The 12.6 percent figure was “very accurate”, said a government financial advisor on condition of anonymity, who said it was based on population data from the trade ministry’s ration card program.

Iraq’s central government and the Kurdish autonomous region have quarreled over money repeatedly since the 2003 fall of Saddam Hussein.

The post-Saddam constitution put in place a system guaranteeing the Kurds self-rule with a share of overall revenue proportionate to their share of the population.

The reduced budget would dramatically add to the Kurdistan Regional Government’s (KRG) financial difficulties. The region says it is already stretched thin due to a three-year war on Islamic State and the cost of supporting hundreds of thousands of refugees who have fled the militants.

Read full article by Ahmed Rasheed, Raya Jalabi on Reuters, November 6, 2017.

Country: Iraq
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