- The Kurdistan Regional Government owes international oil companies $3bn
- It also owes domestic contractors several billion dollars
- Projects across all sectors have stalled
Around 5,000 capital projects are currently on hold in Iraqi Kurdistan due to the regions ongoing fiscal crisis, according to Kurdistan Regional Government (KRG) Deputy Prime Minister Qubad Talabani.
Over 2014 the KRG ran a large budget deficit after Baghdad froze payments to the KRG due to a disagreement over independent oil sales. At the same time an escalation in the war against the militant group Islamic State of Iraq and Syria (ISIS) led to increased spending on defense.
The KRG currently owes international oil companies around $3bn, according to analysts.
On top of debts to international oil companies we also have several billion in obligations to our own contractors, because our projects have stalled, he told Meed in an interview. Around 5,000 capital investment projects have stalled.
As the autonomous region struggles to find funds to pay public salaries government projects across all sectors have stalled.
There are big ones, small ones, some at 90 per cent of completion, some at 5 per cent so it is really a wide spectrum, said Talabani.
They are all stalling basically because all of the money that is coming into Kurdistan at the moment is going straight into the civil service and into the operation of the government. We are not left with enough of a surplus to put into capital projects.
The KRG has seen increasing government revenues over 2015 after ramping up independent oil sales and is targeting a monthly budget surplus by the end of the year.