Iraq can’t finance budget deficit without Kurdish oil revenues, says legislator



BAGHDAD // Iraq cannot finance its projected 2014 budget deficit unless the northern Kurdistan region pays its oil export revenue into the national treasury — or loses its share of state spending, a senior legislator said on Sunday.

Haider Al Abadi, head of parliament’s treasury committee, said the budget, swollen by extra expenditure, would “collapse” if the state kept paying the autonomous region its 17 per cent share even as the Kurds withhold oil export proceeds.

Baghdad’s chronic quarrel with Kurdistan over how to manage and share Iraq’s energy resources intensified this month when the Kurdish Regional Government (KRG) said oil had begun flowing to Turkey for export via a pipeline outside federal control.

Last week, Iraq’s oil minister threatened legal action and drastic trade reprisals against Turkey and any foreign companies involved in what he called the “smuggling” of Iraqi oil.

The KRG’s prime minister, Nechirvan Barzani, arrived in the Iraqi capital on Sunday to pursue talks on an issue that has bedevilled relations between Iraq’s Arabs and minority Kurds.

“We go to Baghdad with the intention of closing gaps,” KRG spokesman Safeen Dizayee said before the talks, which he said would focus on increasing Kurdistan’s oil output and a mechanism for marketing its exports.

Mr Al Abadi said the draft budget projected a deficit of about $18 billion (Dh66bn), assuming the Kurds paid the treasury the revenue from budgeted oil exports of 400,000 barrels per day (bpd) — a target industry sources say far exceeds Kurdistan’s current export capacity of around 255,000 bpd.

To Baghdad’s fury, the Kurds handed over no oil export revenue last year because of an unresolved dispute over the payment of oil companies operating in the northern region.

For much of 2013 the Kurds were trucking what industry sources estimated was up to 60,000 bpd of crude and condensates to Turkey, while the independent pipeline was being completed.

In 2012, the Kurds exported 61,000 bpd of crude via the Baghdad-controlled pipeline to Turkey, so the revenue went automatically to the central government.

Baghdad complained at the time that the Kurds should have exported more than double this amount, however.

Mr Al Abadi said state spending had risen sharply in the draft budget due to increases in pensions and the minimum public sector wage, child benefits and student allowances.

Echoing remarks made in the past week by the prime minister Nouri Al Maliki and Oil Minister Abdul Kareem Luaibi, Mr Al Abadi said the central government would have to cut the Kurds’ budget share.

“They are not contributing, so why should they get something out of it?” he asked in an interview. “At the moment we have a deficit of 21 trillion. If you add 15 to 16 trillion to it, the budget will collapse,” he said, estimating the additional shortfall if no Kurdish oil revenue is handed over.

Mr Al Abadi, who is also a senior member of Mr Al Maliki’s Shiiite Dawa party, said time was running out for the budget to be passed before parliament is dissolved ahead of an election on April 30. He said it would be hard to muster a quorum of 163 of the assembly’s 325 members during an electoral campaign.

Kurdish and Sunni Muslim opposition lawmakers would stay away, as would MPs busy campaigning or those without a motive to turn up because they were not running for re-election, he said.

Mr Al Abadi accused the Kurds of seeking to prolong oil talks until after the poll to entrench a fait accompli whereby they pocket their own revenue from oil “officially” piped to Turkey and still receive their 17 per cent share of the federal budget.

Kurdish officials say that in practice Kurdistan receives closer to 10 per cent of the national budget.

Even if the Kurds paid over notional oil revenues from exports of 400,000 bpd, Mr Al Abadi said, Baghdad would only just be able to bridge its 2014 budget gap.

He said the withholding of the KRG’s earnings also violated a UN security council resolution under which all Iraqi oil export proceeds must be paid into a UN-approved account in New York from which five per cent must be deducted to pay war reparations to Kuwait for Iraq’s 1990 invasion.

* Reuters

COMPANY PROFILE

Company name: Klipit

Started: 2022

Founders: Venkat Reddy, Mohammed Al Bulooki, Bilal Merchant, Asif Ahmed, Ovais Merchant

Based: Dubai, UAE

Industry: Digital receipts, finance, blockchain

Funding: $4 million

Investors: Privately/self-funded

KEY DEVELOPMENTS IN MARITIME DISPUTE

2000: Israel withdraws from Lebanon after nearly 30 years without an officially demarcated border. The UN establishes the Blue Line to act as the frontier.

2007: Lebanon and Cyprus define their respective exclusive economic zones to facilitate oil and gas exploration. Israel uses this to define its EEZ with Cyprus

2011: Lebanon disputes Israeli-proposed line and submits documents to UN showing different EEZ. Cyprus offers to mediate without much progress.

2018: Lebanon signs first offshore oil and gas licencing deal with consortium of France’s Total, Italy’s Eni and Russia’s Novatek.

2018-2019: US seeks to mediate between Israel and Lebanon to prevent clashes over oil and gas resources.

Specs

Price, base: Dhs850,000
Engine: 3.9-litre twin-turbo V8
Transmission: Seven-speed automatic
Power: 591bhp @ 7,500rpm
Torque: 760Nm @ 3,000rpm
Fuel economy, combined: 11.3L / 100km

Sinopharm vaccine explained

The Sinopharm vaccine was created using techniques that have been around for decades. 

“This is an inactivated vaccine. Simply what it means is that the virus is taken, cultured and inactivated," said Dr Nawal Al Kaabi, chair of the UAE's National Covid-19 Clinical Management Committee.

"What is left is a skeleton of the virus so it looks like a virus, but it is not live."

This is then injected into the body.

"The body will recognise it and form antibodies but because it is inactive, we will need more than one dose. The body will not develop immunity with one dose," she said.

"You have to be exposed more than one time to what we call the antigen."

The vaccine should offer protection for at least months, but no one knows how long beyond that.

Dr Al Kaabi said early vaccine volunteers in China were given shots last spring and still have antibodies today.

“Since it is inactivated, it will not last forever," she said.

A QUIET PLACE

Starring: Lupita Nyong'o, Joseph Quinn, Djimon Hounsou

Director: Michael Sarnoski

Rating: 4/5

The burning issue

The internal combustion engine is facing a watershed moment – major manufacturer Volvo is to stop producing petroleum-powered vehicles by 2021 and countries in Europe, including the UK, have vowed to ban their sale before 2040. The National takes a look at the story of one of the most successful technologies of the last 100 years and how it has impacted life in the UAE. 

Read part four: an affection for classic cars lives on

Read part three: the age of the electric vehicle begins

Read part one: how cars came to the UAE

 

UAE central contracts

Full time contracts

Rohan Mustafa, Ahmed Raza, Mohammed Usman, Chirag Suri, Mohammed Boota, Sultan Ahmed, Zahoor Khan, Junaid Siddique, Waheed Ahmed, Zawar Farid

Part time contracts

Aryan Lakra, Ansh Tandon, Karthik Meiyappan, Rahul Bhatia, Alishan Sharafu, CP Rizwaan, Basil Hameed, Matiullah, Fahad Nawaz, Sanchit Sharma

SPEC SHEET: NOTHING PHONE (2)

Display: 6.7” LPTO Amoled, 2412 x 1080, 394ppi, HDR10+, Corning Gorilla Glass

Processor: Qualcomm Snapdragon 8+ Gen 2, octa-core; Adreno 730 GPU

Memory: 8/12GB

Capacity: 128/256/512GB

Platform: Android 13, Nothing OS 2

Main camera: Dual 50MP wide, f/1.9 + 50MP ultrawide, f/2.2; OIS, auto-focus

Main camera video: 4K @ 30/60fps, 1080p @ 30/60fps; live HDR, OIS

Front camera: 32MP wide, f/2.5, HDR

Front camera video: Full-HD @ 30fps

Battery: 4700mAh; full charge in 55m w/ 45w charger; Qi wireless, dual charging

Connectivity: Wi-Fi, Bluetooth 5.3, NFC (Google Pay)

Biometrics: Fingerprint, face unlock

I/O: USB-C

Durability: IP54, limited protection

Cards: Dual-nano SIM

Colours: Dark grey, white

In the box: Nothing Phone (2), USB-C-to-USB-C cable

Price (UAE): Dh2,499 (12GB/256GB) / Dh2,799 (12GB/512GB)

COMPANY PROFILE

Name: SmartCrowd
Started: 2018
Founder: Siddiq Farid and Musfique Ahmed
Based: Dubai
Sector: FinTech / PropTech
Initial investment: $650,000
Current number of staff: 35
Investment stage: Series A
Investors: Various institutional investors and notable angel investors (500 MENA, Shurooq, Mada, Seedstar, Tricap)

Herc's Adventures

Developer: Big Ape Productions
Publisher: LucasArts
Console: PlayStation 1 & 5, Sega Saturn
Rating: 4/5

The specs

Engine: three three 212.7kWh motors
Power: 1,000bhp
Torque: 15,600Nm
Range: 530km
Price: Dh500,000+ est
On sale: early 2023

The specs

Engine: two permanent magnet synchronous motors
Transmission: two-speed
Power: 625hp
Torque: 850Nm
Range: 456km
Price: from Dh737,480
On sale: now

Company Profile

Company name: Cargoz
Date started: January 2022
Founders: Premlal Pullisserry and Lijo Antony
Based: Dubai
Number of staff: 30
Investment stage: Seed

Company profile

Company name: Hayvn
Started: 2018
Founders: Christopher Flinos, Ahmed Ismail
Based: Abu Dhabi, UAE
Sector: financial
Initial investment: undisclosed
Size: 44 employees
Investment stage: series B in the second half of 2023
Investors: Hilbert Capital, Red Acre Ventures

BACK TO ALEXANDRIA

Director: Tamer Ruggli

Starring: Nadine Labaki, Fanny Ardant

Rating: 3.5/5

Company profile

Company name: Xare 

Started: January 18, 2021 

Founders: Padmini Gupta, Milind Singh, Mandeep Singh 

Based: Dubai 

Sector: FinTech 

Funds Raised: $10 million 

Current number of staff: 28 

Investment stage: undisclosed

Investors: MS&AD Ventures, Middle East Venture Partners, Astra Amco, the Dubai International Financial Centre, Fintech Fund, 500 Startups, Khwarizmi Ventures, and Phoenician Funds

Our family matters legal consultant

Name: Dr Hassan Mohsen Elhais

Position: legal consultant with Al Rowaad Advocates and Legal Consultants.