Iraqi-Kurdish oil deal falls short of solutions

maktoob news ^ | By VIVIAN SALAMA and BRAM JANSSEN

[DeaconBenjamin]

The semi-autonomous Kurdish Regional Government has struggled to stabilize the local economy in the face of a militant onslaught and an expensive financial dispute with the Iraqi central government in Baghdad.

Negotiations between the two sides yielded some progress Thursday after Baghdad agreed to release $500 million in frozen budget payments. In return, the Kurds will provide 150,000 barrels of oil per day for Baghdad to sell.

But while the cash infusion may provide temporary relief, many here say it is nowhere near enough to stabilize the Kurdish economy amid the Islamic State group insurgency, which has driven more than 1 million people to seek refuge in northern Iraq.

Baghdad moved to withhold the 17-percent share of the national budget normally earmarked for the Kurdish region — an estimated $20 billion — after the Kurds independently shipped oil to Turkey in January without going through the Iraqi Oil Ministry. In May, the Kurdish government went a step further and sold the 1.05 million barrels — worth more than $100 million at the time — in Turkey.

Iraq's Supreme Court in June rejected a request from the central government, under then-Prime Minister Nouri al-Maliki, to outlaw direct oil exports from the Kurdistan region — a decision which some Kurdish officials interpreted as a license for further independent sales.

In recent weeks, however, the battle against the Islamic State group has overshadowed the issue. Tens of thousands of men have left their homes and jobs for the front lines, further adding to the regional economic slowdown.

The Kurds have pushed into disputed territory, including the oil-rich province of Kirkuk, reigniting a decades-old dream of Kurdish independence. Meanwhile, northern Iraq faces an unprecedented burden of providing shelter to more than 1 million people who fled the fighting.