President Barzani’s Baghdad visit: A turning point for Kurdistan?

President Barzani’s Baghdad visit: A turning point for Kurdistan?
2025-01-19T07:27:52+00:00

Shafaq News/ As the Kurdistan Region (KRI) grapples with mounting financial strain and a deepening dispute with the Iraqi government, President Nechirvan Barzani’s visit to Baghdad in early 2025 marks a “symbolic” moment. Amid escalating external pressure, especially from the US, for a swift resolution to the oil and budget conflicts, the stakes could not be higher.

As leaders from both sides sit down to negotiate, the central question looms: can Baghdad and Erbil resolve their long-standing issues, or will divisions continue to hinder the nation's path toward stability and unity?

Inside the Baghdad-Erbil Conflict

The main points of disagreement between Baghdad and Erbil center on oil exports, budget allocations, and constitutional compliance.

A key matter has been the suspension of oil exports from the Kurdistan Region, which has been on hold since March 2023 due to a legal dispute over pipeline agreements. The Iraqi government proposed a budget amendment to restart these exports, but it has faced resistance in parliament.

The salary payment issue, tied to federal budget allocations and the KRI’s oil revenue contributions, has also deeply impacted the Region’s people, sparking strikes and shutdowns in several areas such as Al-Sulaymaniyah, with schools, universities, and government offices disrupted. After halting oil exports through the Turkish Ceyhan pipeline, Baghdad began providing loans to cover salaries. In 2024, the Federal Supreme Court issued a binding decision mandating the direct disbursement of salaries to Kurdistan Region employees, bypassing Erbil. However, payments continued to face interruptions, with the Kurdistan Regional Government (KRG) accusing Baghdad of irregular disbursements.

Last Opportunity for Baghdad

Throughout 2024 and 2025, several high-level discussions have taken place to address these problems. President Barzani visited Baghdad in April 2024 and January 2025 to meet with Iraqi officials and discuss the disagreements, including the implementation of Article 140 of the constitution addressing disputed territories, delayed salary payments for KRI employees, amending Article 12 of the Federal Budget Law on compensating the KRG for the costs of oil production and transportation and restarting oil exports through the Ceyhan pipeline.

Barzani’s recent two-day visit to Baghdad was viewed by many observers as a “last opportunity” for the federal government. During the visit, he participated in a meeting with the State Administration Coalition (SAC), a political bloc that includes the Iran-backed Shiite Coordination Framework, the Kurdistan Democratic Party (KDP), the Sovereignty (Al-Siyada), the Taqadum alliance, and the Patriotic Union of Kurdistan (PUK).

Prime Minister Mohammed Shia Al-Sudani and Speaker Mahmoud Al-Mashhadani also attended the meeting, where SAC emphasized that “the salary problem is strictly technical, with no political motives,” urging all parties to refrain from media escalation.

The discussions between Barzani and Al-Sudani centered on addressing service-related concerns affecting citizens and organizing mutual commitments between the federal government and the Region, based on constitutional principles and the Budget Law. Barzani also met with Iraq’s Chief Justice of the Federal Supreme Court, Jassim Mohammed, to discuss the court’s role in resolving outstanding matters, particularly salaries and financial entitlements. Both sides recognized the importance of cooperation between the judiciary, and federal and Regional institutions to resolve tensions based on legal principles, contributing to national stability and upholding the rule of law.

In a separate meeting, Barzani and Haider al-Abadi, leader of Iraq's Victory Alliance (Al-Nasr), stressed the importance of strengthening “joint action” between both governments. The Kurdish president also met with Speaker Al-Mashhadani, discussing the need for “enhanced cooperation” between the KRG and Baghdad and emphasizing the Iraqi Parliament’s role in “promoting national dialogue” and ensuring equality for all Iraqi communities. Barzani urged the parliament to take a more active role in amending the 2025 Budget Law to “fairly allocate financial rights and entitlements to the Region,” particularly in ensuring KRG employee salaries are paid on par with those of other Iraqis.

In discussions with Nouri Al-Maliki, leader of the State of Law Coalition (SLC), and Hadi Al-Ameri, Secretary-General of the Badr Organization, Barzani reiterated the need for “strengthening political dialogue” among Iraq's factions and enhancing coordination to ensure unity. They all agreed that ongoing collaboration would help resolve disputes while safeguarding the interests of all components of the Iraqi population.

Barzani’s talks with Ammar Al-Hakim, leader of the National Wisdom Movement (Al-Hikma), reinforced the need to adhere to the constitution as the foundation for achieving justice for Iraq’s diverse communities. Likewise, discussions with Khamis al-Khanjar, leader of the Sovereignty Alliance, focused on fostering national partnership and ensuring the protection of the rights of all individuals in Iraq.

After his trip, Barzani took to X, reaffirming his commitment to “supporting a stable Iraq that guarantees justice and fulfills the state’s obligations to all its components.” He wrote, “We emphasize our determination to strengthen relations between Erbil and Baghdad, in a way that serves the public interest and lays the foundation for a more prosperous and stable future.”

Strategically Timed Journey

Speaking to Shafaq News, Khairi Bozani, a senior advisor in the Kurdistan Region presidency, described the visit as both symbolic and strategically timed. “President Barzani’s visit holds substantial importance, coming at the start of a new year fraught with challenges, and placing complex topics on the table for discussion,” he said.

Bozani confirmed that the trip is more than a routine event in relations between the two governments. “It symbolizes the intricate and often contentious relationship between the federal government and the Region, marked by diverging interests and priorities.”

The timing of Barzani’s journey, according to Bozani, is critical given regional and international developments. “These dynamics underscore the importance of internal dialogue in Iraq, which faces mounting challenges in its regional environment. Iraq is at a crossroads: either strengthen its internal front through consensus among its components or remain fragmented, leaving it vulnerable to external pressures,” he said.

Asked if the visit hinges on moving beyond traditional political rhetoric and toward the tangible implementation of agreements, the Kurdish official explained, “KRI people are no longer interested in new political statements. They demand concrete solutions that guarantee their basic rights, such as salary disbursement and improved services, and that is what the president is seeking to achieve” he said.

US Blatant Interference

On Wednesday, the US State Department urged the Iraqi Parliament to expedite the approval of Iraq's federal budget.

When asked for comments on the recent disputes between Erbil and Baghdad over oil and budget issues, State Department spokesperson Matthew Miller said, “We have engaged the Government of Iraq and the Kurdistan Regional Government to reach a durable budget agreement that would facilitate sustained oil production in the Iraqi Kurdistan region. We have seen the review of the budget amendment this week and urge its speedy adoption.”

In response, committee member Mukhtar Al-Mousawi told Shafaq News Agency, “The US State Department's statements are unacceptable. This blatant interference in Iraq’s internal affairs, including the budget and other topics, cannot be ignored and must be formally rejected by the relevant government bodies, parliament, and political forces.”

Al-Mousawi further affirmed, "The financial and oil controversies between Baghdad and Erbil are internal matters, and no external party should interfere, as such involvement only exacerbates the disagreements,” adding, “Therefore, the US State Department must avoid meddling."

"Any attempt to exert media pressure or other forms of influence has not, and will not, have an impact on Iraq's legislative institution,” he pointed out.

A More Realistic Budget for 2025

The 2025 Iraqi budget could take a more pragmatic approach, according to Moeen al-Kadhimi, a member of the Parliamentary Finance Committee. He told Shafaq News Agency that the committee recently hosted a Ministry of Finance delegation, including budget, accounting, and public debt representatives, to review the 2024 general budget and discuss complaints from ministries and provinces about “insufficient funding.”

Al-Kadhimi detailed that the 2024 budget was set at 211 trillion dinars (approximately $176B), but spending reached only 156 trillion dinars (about $120B). "Revenues did not exceed 137 trillion dinars, and the remaining amount was covered by loans.”

The lawmaker stressed that the 2025 budget must be more realistic, suggesting a cap of 150 trillion dinars. Following the anticipated vote on the Budget Law amendment in the Council of Representatives, he noted that the government will factor in the costs of oil extraction and transportation in the Kurdistan Region. "The cost varies between 6 and 16 dollars in the upcoming budget tables," he clarified.

Proposed Kurdistan Oil Company

In a bid to address ongoing debates over oil revenues, the Parliamentary Oil Committee convened to discuss amendments to the Budget Law, focusing on the Region’s oil sector. Committee member Basim al-Gharibawi affirmed that “the committee reached a consensus that any amendments must align with both the law and the Iraqi constitution.”

Committee members have reportedly proposed amendments to Article 12 of the Budget Law, which would be “written up as recommendations and presented during the second reading of the law.”

Among the proposals under consideration is the establishment of the Kurdistan Region Oil General Company. "The company would be directly affiliated with the Ministry of Oil and tasked with overseeing oil extraction and export operations in the Region," al-Gharibawi said. “This move,” he added, “could play a key role in easing the tensions between Baghdad and Erbil.”

Other Efforts from Both Sides

The KRG's negotiation committee held a meeting on Thursday with diplomatic missions in Erbil to discuss ongoing disagreements with Baghdad. Approximately 20 missions attended the gathering, underscoring the international community's interest in the resolution of these obstacles.

A day later, the Finance Committee of the Iraqi Parliament announced that a newly formed subcommittee will begin its work next week to monitor the distribution of Kurdistan’s financial entitlements for 2024-2025 and audit the data provided by the Baghdad government, following objections raised by the KRG.

Committee member Mustafa Al-Karawi said, “The committee will host officials from relevant federal institutions and thoroughly audit the figures as requested by the Region to ensure transparency and fairness,” adding, “The primary goal of this parliamentary initiative is to protect citizens from political discord and ensure they receive their entitlements and salaries on time.”

The subcommittee, chaired by Ahmed Mazhar Al-Jubouri, the first deputy head of the Finance Committee, comprises six members: Uday Awad Kazem, Nermin Marouf Ghafour, Mustafa Khalil Al-Karawi, Faisal Hassan Sukkar Al-Naili, Jamal Kocher, and Samir Mubarak Mirza (finance committee rapporteur).

Recently, the Finance Committee met with Finance Minister Taif Sami to discuss proposed amendments to certain articles of the 2025 Budget Law, including deliberations related to oil, salaries, and the KRI's budget. Additionally, the Parliament has completed the review and second reading of the draft law for the first amendment to the federal Budget Law.

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