Erbil Threatens Boycott as Baghdad Freezes Salaries, US Urges Calm

Asharq Al-Awsat

31-05-2025

Tensions are high between Erbil and Baghdad after Iraq's Federal Finance Minister, Taif Sami, ordered the suspension of salary payments to employees in the Kurdistan Region starting May 2025.
In response, Shakhawan Abdullah, the second deputy speaker of Iraq's parliament, has called on Kurdish representatives to consider withdrawing from Baghdad, a move that could deepen political rifts within the fragile federal system.
Abdullah made the remarks following a meeting with leaders of Kurdish blocs in the Iraqi parliament. He described the finance ministry's decision as a 'deliberate violation' designed to starve the Kurdish people.
In a statement posted to Facebook, he said: 'After extensive discussion, we unanimously agreed to demand the federal government immediately halt these violations and resume salary disbursements.'
He added that a formal letter had been sent to Prime Minister Mohammed Shia al-Sudani, urging him to take responsibility and resolve the issue. Abdullah warned that, if no action is taken, the Kurdish political leadership is prepared to implement a boycott 'within one hour.'
Meanwhile, Ali Hama Saleh, a senior figure in the Kurdistan-based National Stance Movement, called for a high-level delegation led by the Kurdistan Regional Government (KRG) Prime Minister to visit Baghdad after Eid al-Adha.
He urged both sides to seek a long-term resolution to the budget dispute and reopen negotiations over oil exports through the Türkiye pipeline.
Speaking in a televised interview, Saleh emphasized that the federal budget is calculated annually, and a legal and financial resolution for Kurdistan's 2025 share is still possible.
He called for calm and constructive dialogue, warning against inflammatory rhetoric and urging the KRG to ease some of its conditions on resuming oil exports, considering Iraq's economic strain and projected declines in global oil prices.
The finance ministry justified its decision by claiming the Kurdistan Region exceeded its allocated 12.67% budget share.
According to ministry data, the region generated 19.9 trillion Iraqi dinars in oil and non-oil revenues since 2023 but transferred only 598.5 billion dinars to Baghdad. This shortfall, the ministry argued, breaches budget agreements.
Kurdish leaders, however, view the move as punitive and ill-timed especially with the Eid holiday approaching. KRG spokesperson Peshawa Hawramani accused Baghdad of continuing a 'policy of starvation and extermination' against the Kurdish population.
Vian Sabri, head of the Kurdistan Democratic Party's bloc in parliament, said Kurdish parties will submit an official protest to the prime minister. She also demanded full disclosure of the federal government's spending, stating that only one financial report has been shared this year.
As tensions escalate, the US has reportedly stepped in, urging both sides to resolve the crisis.
A senior US State Department official, speaking anonymously, told local media that quickly resolving the salary issue would demonstrate Iraq's commitment to its citizens and create a more stable investment climate.
The official also suggested that progress could help reopen the suspended Iraq–Türkiye oil pipeline, a vital export route that has remained closed amid ongoing disputes.