Final Agreement on Salaries for Kurdistan Region Employees Reached
Following extensive negotiations that have spanned several months, the Ministry of Finance within the Kurdistan Regional Government (KRG) announced on Monday that a comprehensive agreement has been finalized with the federal government concerning the payment of salaries for regional employees.
In a statement, the Ministry noted, “After 15 days of continuous collaboration between the technical teams from the Ministry of Finance in the Kurdistan Region and the Federal Ministry of Finance to address various technical challenges, implement requests, and prepare the salary lists for employees, retirees, and security forces in Kurdistan, a conclusive agreement regarding employee salaries for the year 2025 has been reached.”
The announcement followed a meeting held on the same day at the Iraqi Economic Council, attended by a delegation from the KRG headed by Minister of Finance and Economy, Awat Sheikh Janab, alongside the KRG President, Omid Sabah.
The KRG delegation expressed appreciation to Iraqi Prime Minister Mohammed Shia al-Sudani, Deputy Prime Minister Fouad Hussein, the Kurdistan Region’s representative in Baghdad, Khalda Hadi Shaosli, and Federal Finance Minister Taif Sami for their efforts, coordination, and support that contributed to resolving the outstanding salary issues for KRG employees.
Furthermore, the KRG’s Ministry of Finance commended the presidency of the Iraqi parliament and various political blocs for their collaboration and support in approving the budget amendments, particularly those pertaining to oil exports.
The Ministry confirmed that the technical teams from the Finance Ministry in the KRG are finalizing the processes necessary to ensure that January 2025 salaries are distributed, with funds anticipated to be deposited into the Ministry’s designated bank account.
As part of the ongoing dialogue, Federal Finance Minister Taif Sami had previously requested the region’s delegation on February 1 to provide the necessary banking details for each employee, regardless of whether salaries are processed through federal or regional banks. Additionally, he advocated for allowing employees the flexibility to choose their banks for salary deposits, rather than being mandated to use a specific account system.
A technical delegation from the KRG, led by Finance and Economy Minister Sheikh Janab, further engaged with a corresponding delegation from the federal government, chaired by Minister Sami, in Baghdad at the Al-Rashid Hotel. This meeting involved various consultants and senior officials from both Finance Ministries and addressed the budget and employee salaries within a positive and accountable framework.
The KRG delegation reiterated its commitment to collaborative efforts aimed at developing a cohesive strategy to ensure that the necessary financial allocations for Kurdistan employees are consistently available throughout 2025.
Despite these developments, teachers in Sulaymaniyah continue their sit-in demonstration for the seventh consecutive day outside the United Nations building. They demand timely payment of overdue salaries and assurances regarding the regularity of financial disbursements. The continuation of their hunger strike highlights the urgency of their plight, exacerbated by the lack of official responses to their grievances.
This ongoing sit-in aligns with the broader financial challenges confronting the Kurdistan region, as the delayed payment of employee salaries, particularly for teachers, has intensified protests across multiple cities, including recent disruptive demonstrations in Sulaymaniyah. The persistence of hunger strikes and deteriorating health conditions among protesters have amplified calls for immediate resolution, with growing concerns over potential health consequences if demands remain unmet.
On January 20, former Finance Committee member Ahmed Al-Hajj Rashid emphasized that the Kurdistan salary crisis is unlikely to see resolution in the near term, predicting continuing monthly challenges due to the regional government’s failure to transfer 50% of internal revenues to the federal authorities.
The relationship between Baghdad and Erbil has recently been strained, resulting in a “data conflict” over salary discrepancies, with December 2024 salaries still unpaid to Kurdistan employees. The Federal Ministry of Finance insists that the funds due to Kurdistan have been completely sent, while KRG officials claim that the amount received falls significantly short by approximately 800 billion dinars, hindering the payment of last month’s salaries.
On January 16, the KRG reiterated its conditions for receiving its budget allocations, stipulating that its internal revenues be transferred to Baghdad in exchange for the full benefits due, beyond just salaries. This position emerged following discussions by the KRG negotiation committee with international representatives concerning the ongoing budget, salary, and oil export disputes between Baghdad and Erbil.
This salary crisis coincided with President of the Kurdistan Region, Nechirvan Barzani’s, visit to Baghdad on January 12, where he met with Prime Minister Mohammed Shia al-Sudani and leaders of the State Administration Alliance. While aimed at resolving the salary situation, the discussions also focused on broader issues regarding resource management transparency and the execution of financial agreements.
During his two-day visit, Barzani advocated for adjustments to the budget law to ensure equitable distribution of funds across the region, addressing the necessity for reliable salary payments.
The Kurdistan Region’s allocation from the federal budget is set at 21 trillion dinars. However, with oil exports halted, financial transfers from Baghdad have been limited to salary disbursements only. The federal government contends that it met its 2024 funding obligations, while Erbil claims that the actual amounts received were markedly lower.
Over recent years, employees in the Kurdistan Region have endured repeated financial crises, leading to significant market disruptions stemming from delayed salary payments and the implementation of a compulsory savings policy initiated years earlier under former Prime Minister Haider al-Abadi’s austerity measures. These ongoing fiscal disputes between Baghdad and Erbil have culminated in an extensive and ongoing financial crisis.
