BAGHDAD, Feb 15 (Reuters) - Iraqi’s prime minister said on Monday Baghdad would pay the salaries of government employees in Kurdistan if the autonomous northern region stopped selling oil independently, suggesting a deal on sharing oil and revenues could be revived.
After a decade-long economic boom, the Kurdistan Regional Government (KRG) began to suffer in 2014 when Baghdad slashed its share of the budget in response to the Kurds, in pursuit of economic independence, building their own pipeline to Turkey.
The KRG was forced to cut public workers’ salaries by up to 75 percent this month as the region grapples with an economic crisis brought to a head by plummeting oil prices.
“I have a suggestion: Give us the oil and we will give every Kurdish employee a salary like we do for every Iraqi employee,” Prime Minister Haider al-Abadi said in an interview on state television.
Oil exports from northern Iraq via pipeline to Turkey averaged 601,811 barrels per day last month, mostly from fields within the Kurdistan region. The rest came from the disputed Kirkuk field, which is operated by Iraq’s state-run North Oil Co but has been under Kurdish control since June 2014 when Islamic State militants overran the north of the country.
The region’s Prime Minister Nechirvan Barzani led a delegation to Baghdad on Jan. 31 to meet with Abadi and other senior government officials, but no concrete decisions were announced.
The war against Islamic State and an influx of more than one million people displaced by violence in the rest of the country has compounded the problem, which is also the result of years of mismanagement and corruption.
Kurdish officials have warned in recent weeks that their region faces an economic collapse. (Reporting by Stephen Kalin; editing by John Stonestreet)