COR ECON COMMITTEE CHAIR ELUCIDATES KURDISH BUDGET

C O N F I D E N T I A L BAGHDAD 003897

SIPDIS

SIPDIS

E.O. 12958: DECL: 11/29/2017
TAGS: ECON EFIN PGOV IZ
SUBJECT: COR ECON COMMITTEE CHAIR ELUCIDATES KURDISH BUDGET
REVISIONS

REF: A. BAGHDAD 3894

B. BAGHDAD 3841

Classified By: Economic Minister Charles P. Ries for reasons 1.4 (b/d)


1. (C) Begin Summary: During a 29 November meeting, Dr.
Haider al-Abadi (Dawa, Shia),Chair of the Economic Committee
in the Council of Representatives (CoR),clarified the
changes the Kurds made to the Council of Ministers (CoM)
approved draft budget for 2008. According to al-Abadi, the
Kurds wanted two changes: 1) the draft budget states that
Kurdish Peshmerga should be funded by the GOI Ministry of
Defense for 2008 only -- the Kurds amended the wording such
that the Peshmerga would be funded centrally for 2007 as
well; 2) the budget states that following an audit by the
federal Board of Supreme Audit, the Kurdistan Regional
Government (KRG) should remit the revenue owed by the KRG to
the federal government for the years 2004-2007 -- the Kurds
sought to reduce the years to 2007 only. Notwithstanding the
Kurds, al-Abadi claimed that none of the political factions
had any major concerns about the budget bill. He confirmed
that the CoR awaits an official response from the CoM before
action on the budget may resume. End Summary.


2. (C) Following a prolonged session in the CoR 29 November,
Dr. Haider al-Abadi provided Econoff an update on the budget
deliberations. He confirmed that the Kurds were at fault,
complaining that many Kurdish MPs were formerly members of
the Kurdish Peshmerga and therefore obeyed even "illogical"
orders from their political leadership without question. The
Kurds made two substantive changes to the draft budget, he
explained. The first change mandates that the central
government would fund the Peshmerga for 2007 and 2008,
instead of 2008 only, which is what the first draft reflects.
The second change concerns the payment of dues owed by the
KRG to the federal treasury upon completion of an audit by
the federal Board of Supreme Audit. The Kurds amended the
language to reduce the number of years subject to audit from
2004-2007 to 2007 only.


3. (C) Dr. al-Abadi claimed that the Kurds forced the CoR
leadership into both reading the amended version of the
budget 19 November as well as returning it to the Council of
Ministers (CoM) for consideration upon discovery of the
discrepancy by threatening a CoR boycott. He noted that the
Economic Committee had been forging ahead with its own
analysis of the budget and was in the midst of preparing its
report. He added that he had not heard that any other major
political blocs had significant problems with the draft
budget. Al-Abadi was pessimistic that, given the current
impasse, the budget could be passed prior to the end of the
calendar year. Hajj flights would begin 2 December, he said,
and because the GOI provides free trips for all CoR members
so inclined, he expected quorum would be difficult to
maintain.
BUTENIS