ERBIL, Kurdistan Region - The Kurdistan Regional Government (KRG) on Wednesday ordered its ministries to expedite establishment of an electronic payment system and called on Baghdad to transfer outstanding salary payments for civil servants who went two months without getting paid as problems persist in regularising the federal government covering the KRG’s payroll.
At a meeting of the Kurdistan Region’s council of ministers, headed by Prime Minister Masrour Barzani, the ministries were instructed to coordinate with Baghdad “to complete the biometric registration and assignment of employee numbers to all salary recipients and to expedite the activation of the electronic salary payment system,” according to a statement from the KRG.
“In return, the federal Ministry of Finance must promptly transfer the full amount of the salaries for July and August 2024 so that the KRG can disburse the August salaries to its employees as soon as possible,” the statement added.
After two months of delay, the Kurdistan Region’s civil servants started receiving their July salaries on Tuesday. In late August, the federal government sent the first batch of civil servant wages, but Baghdad said the disbursed amount was for the month of August, and it would not send more than the 36 billion dinars already dispatched for July, citing a report from the Federal Board of Supreme Audit that indicated Baghdad has sent an extra 600 billion dinars to the KRG this year. The board argued that this amount, combined with the KRG’s local income, should suffice to cover for July’s salaries.
Baghdad has paid the salaries of Kurdistan Region’s civil servants for the first six months of this year, albeit with delays. The Iraqi government has pointed to repeated problems such as duplicate names in the payroll list, as well as issues with names on the Kirkuk payroll in July.
Six private banks are involved in offering digital banking services to the KRG’s over a million public employees as part of the My Account program. The federal government has shouldered the payment of the employees since the beginning of this year but has yet to agree to continue the process through the KRG’s banking initiative. Baghdad wants to apply its own banking program, Tawtin (localization).
About 120,000 of the Kurdistan Region’s public servants are currently registered in the My Account initiative and received their salaries through the program for the first time on Wednesday, according to Aziz Ahmad, deputy chief of staff to Prime Minister Barzani.
The KRG has failed to pay the salaries of its civil servants on-time and in-full for a decade due to a financial crisis that worsened when its oil exports were halted a year ago following a court ruling on a dispute between Iraq and Turkey over the Kurdistan Region’s independent oil sales.
Erbil currently is dependent on local income sources and its controversial federal budget share.
