KRG delays nationalisation of public salaries, defying order by Iraq's supreme court

Nearly six months after Iraq's top court mandated the nationalisation of public salaries in the Kurdistan Region, the Kurdistan Regional Government [KRG] has not yet implemented the decision, according to an Iraqi lawmaker.

On 23 February, the Supreme Federal Court ruled that the KRG must hand over all oil and non-oil revenues to Baghdad. The court also required the Iraqi federal government to pay the salaries of KRG civil servants, with the KRG cooperating to nationalise the wages via electronic payments through Iraqi public banks. This will ensure prompt and efficient electronic disbursement of salaries.

"After 112 days after the decision by Iraq's top court, the KRG is not ready to hand over the formal payroll lists and establish accounts for public sector employees, retirees, and social welfare beneficiaries to nationalise the wages at Iraqi government banks of Rafidain, Rashid, and Trade Bank of Iraq (TBI)," Soran Omar Saeed, an Iraqi lawmaker, told The New Arab. 

Saeed, who has followed up on the issue by writing a formal letter to Iraq's Finance Minister Tayif Sami Mohammed, also said that Iraq's finance minister has responded to him via a formal document that confirms that "the KRG is not ready to fulfil what is required as per implementing the court's decision."

Saeed, who also published a copy of the document signed by Mohammed on his official Facebook page, emphasized that the KRG is making illegal pressures on its employees to open bank accounts at private banks in what the KRG is trying to be an alternative to nationalising the public sector wages.

The KRG has named this process ‘My Account’, but many KRG employees are reluctant to embrace the process, fearing it will be used as a political tool to pressure them and deduct fines from their salaries without consent.

Saeed also said he would take further steps to oblige the KRG to implement the top court's decision, without further clarifications. He indicated that the KRG's delay is intended to "monopolise public wages."

TNA contacted Hunar Jamal, spokesperson for the KRG Ministry of Finance and Economy, but he was not immediately available for comment.

Minister Tayif Sami announced in February that the ministry is prepared to disburse the salaries promptly upon receiving the required payroll documentation from Kurdish authorities.

The delay in implementation comes amidst ongoing financial and political tensions between Baghdad and Erbil.

In 2014, Iraqi Kurdistan independently began exporting oil to Turkey, leading to disputes with the central government. The KRG, which needs 940 billion Iraqi dinars monthly to pay over 1.2 million civil servants, has faced additional challenges since 25 March 2023, when Turkey halted the import of 450,000 barrels of oil from Kurdistan due to an international ruling favouring Baghdad's control over Iraqi oil exports.

As the Kurdistan Region's reliance on Baghdad for timely salary payments grows, the federal government's push for electronic payment systems through national banks is seen as a critical step towards stabilising the region's financial operations.