The Kurdish Globe
By Muhammed Tahir
After two weeks and 25 sessions of intensive discussions and work on the draft budget of Kurdistan Region for the year 2012 and after the opposition MPs boycotted the meetings at the last night of the process, the majority of the Kurdish parliament members approved the budget.
According to Dr. Arsalan Bayiz, the Speaker of the Parliament, approximately 75% of the articles and paragraphs of the budget were approved by both the ruling and the opposition MPs, and only 25% were approved in the absence of the opposition.
Speaker Bayiz mentioned in a press conference following the approval of the budget that they have agreed to allocate a budget for the disputed areas, as they have done in the previous years, for instance supplying electricity to Kirkuk with a budget of USD 500 to 600 million per annum.
On the thirteenth day of the session and while going through the articles, discussions reached the oil revenues section, where the explosion happened.
Due to failure by the parliament to accept a request to establish a committee to investigate the border point and other regional revenues, opposition MPs left the parliament hall and announced a strike. They stayed inside the parliament building overnight without participating in the last sessions to show their disagreement.
Despite the strike, the session continued and the remaining MPs continued discussing and approving the articles of the budget. They decided that a special account should be opened for the revenues of producing and refining oil until the oil revenue fund is established according to the Region's 2007 Oil and Gas Law.
The opinion of another group about this issue was that this investigation and the subsequent follow up is the task of the Supreme Financial Audit Board and that this board should be activated as soon as possible.
"Although, the Financial Audit Board exists, it doesn't have a chairman and the other monitoring and audit institutions are not active, that is why we asked for an investigation committee," explained Kardo Mohammed, head of the opposition Gorran List in a press conference where they announced their strike one hour after they boycotted the session and left the hall.
MP Nuraddini, however, argues that the opposition was the factor behind the failure to elect a chairman for the board by not voting for the candidate for the post.
"Besides there are finance and energy committees at the parliament and three Gorran MPs are members of the finance committee," Nuraddini explained to the Globe. "Even if another committee is established, it might not be more active."
MP Mohammed argued that they will not attend any other session concerning this year's budget, while Aram Qadir, MP on the list of the Islamic Society Party told the Globe that as MPs they will continue to follow up and evaluate Region's revenues.
Omar Abdulaziz, member of the parliament from the opposition Kurdistan Islamic Union List, did not see the possibility of a demonstration as a distant possibility.
At the eighth session of the Kurdistan Parliament regarding the Region's 2012 budget draft, Kurdistan Regional Government's (KRG) Minister of Finance and Economy Bayiz Talabani responded to MPs questions and comments of the past 7 sessions.
Some parliament members had requested that housing loans in the villages be increased to IQD 25 million (approximately USD 20,000) from its current rate of IQD 20 million, while some others argued that it should become IQD 30 million for everywhere.
"Increasing these loans will become an overload for the budget, but if all the parliament decides to do so, we will increase them," responded Minister Talabani.
An MP from the opposition Gorran Bloc had recommended that every year an amount of IQD 600,000 (approximately UQD 500) should be given to those whose retirement salaries is less than IQD 400,000 per month.
Another request was that an annual amount of IQD 480,000 be given to the grade 9 and 10 employees who do not receive any allowances except professional and family allowances.
Talabani agreed with the requested and said "they will be implemented."
"A committee is established at the Ministerial Council to review all the allowances," explained the Finance Minister. "A number of ministers are members in this committee and we have asked that parliament has a member as well."
Responding to a question about why the revenues generated at the border points are not reflected in the budget, Talabani responded that because the central government audits the budget, they have not reported those revenues in the draft fearing that the central government "would take these revenues."
"We did put these revenues in the budget last year, but the Iraqi Finance Ministry deducted these amounts from our share and did not give it back to us."
Another comment was that part of the border revenues disappears, Minister Talabani argued: "Let the parliament establish an investigation committee to go and do investigations. If they proved that we have sent anything wrong, let them put me on court and hang me."
Commenting on the oil revenues, the KRG minister told the MPs that the oil revenues do not enter into the budget and have a specific account.
"Last year USD 250 million of the revenues of this account was brought to the parliament and you decided how to spend it, and the remaining USD 250 was spent on projects," Talabani said. "This year as well, whatever revenues go into this account will be spent on projects."
Another criticism addressed to the minister was the bureaucracy at the ministry that delays the process of distributing the shares of the ministries which in turn delays the works and projects of the ministries; something which Talabani argues is being addressed by the Council of Ministers.
The issue of the delays in the preparation and approval of the budget and the six-month year was an ongoing issue in the budget-specific sessions of the parliament.
"We have not held the budget for the ongoing projects and the operations, and the loans are put on hold due to the modifications we are doing on their amounts and procedures," explained Finance Minister while claiming that Baghdad is the main factor behind the delays.
Some MPs, however, believe that KRG can prepare its budget without Baghdad, because the oil production capacity of the country and the oil prices can be estimated.
Talabani responded "let the parliament decide that we prepare the draft budget without waiting for the national budget, we will do that by November, but we should also be given the authority to amend it according to the actual numbers without coming back to the Parliament."
Addressing the issue of the high level of the operations budget, Minister Talabani says the increasing number of government institutions and its employees are the major factors behind this problem.
The operation budget of 2012 is 2.5 times higher than the investment budget, just opposite to the common ratio in developed countries.
In the annual financial statement, it was observed that the actual expenditures were more than the operation budget of last year, and some MPs have commented on that. But Talabani says that this does not mean that they are spending without control.
"Last year we decreased 10% of the government's operating budget, the left-over was not sufficient that is why they spent more than the budget."
On the ninth day of the talks, all the MPs, with the exception of one, agreed that the finance and legal committees be assigned to reorganize all the comments about the budget and implement all the approved modifications in a legal way and prepare a version of the draft ready for approval.
Fazil Hassan, member of the parliament from the Future of Kurdistan Party did not agree with this suggestion and recommended that the draft should be sent back to the government to be amended there.
Although, ministers of finance and planning responded to almost all the comments and questions of the parliament members about the draft, some MPs were still not convinced and argued that the minister's answers were not clear in respect to some issues, including the oil and border revenues and the deficit of IQD 2 trillion.
Following the work of the finance and legal ministries, the discussions on the budget continued, and articles of the budget draft started to be approved one by one and gradually. On the thirteenth day, the political parties, budget was discussed and approved. The total budget was IQD 180 billion and was approved after long discussions among MPs and a divergence of opinions among the different lists.
Ashti Aziz, an opposition MP on the Gorran List, argued that the share of the ruling parties in the budget is huge compared to the rest, while Omar Nuraddini, another MP on the ruling Kurdistani Block states that if the number of seats is used as a basis for distribution of the shares, KDP and PUK have got less than their entitlement.