meed-logo

line1 line2 line3
SIGN IN / REGISTER

Iraqi budget may mark new era in Kurdish relations

21 March 2023

 

Talks that took place between Baghdad and Erbil before and after the recent approval of Iraq’s latest budget could form the basis of a new era in relations between the federal government and the Kurdish Regional Government (KRG).

On 13 March, Iraq’s council of ministers agreed on a draft budget for this year of $152.17bn, with 12.6 per cent of the budget going to the country’s northern semi-autonomous Kurdish region.

For the first time, a multi-year draft budget was agreed upon, covering 2023, 2024 and 2025.

The multi-year agreement has given the country a sense of increased financial certainty after a failure to pass budgets in 2021 and 2022.

The budget announcements were made after a series of high-level meetings between officials from federal Iraq and the KRG.

During a press conference announcing the budget deal, Iraqi Prime Minister Mohammed Shia’ al-Sudani said that an "all-encompassing" agreement has been reached between Baghdad and Erbil.

Areas of contention

While significant progress has been made in talks between Baghdad and Erbil, details around the delivery of the budget funds and the legality of Iraqi Kurdistan’s oil and gas law remain contentious.

The day after the budget approval was announced, Al-Sudani travelled to Erbil for his first official visit to the region since taking office, highlighting the importance of these issues.

After a meeting between Al-Sudani and the Kurdistan Region Prime Minister Masrour Barzani, Al-Sudani’s office issued a statement that said: “The prime minister affirmed that the government possesses the will and serious desire to end these outstanding issues in a radical manner and move to a broad horizon of joint action and economic opportunities, which will benefit our people in Kurdistan and all other provinces.”

Barzani also released a statement saying: “The federal budget bill and progress on oil and gas give us stakes in our finances and lay foundations for deeper ties. Let us build on them.”

While the tone of Barzani’s statement was positive and highlighted progress that has been made in the negotiations, it also underlined the fact that more negotiations are required to reach an agreement in certain areas.

Among the main issues between Erbil and Baghdad is the implementation of Article 140 of the Iraqi constitution.

This article calls for a referendum to be held to decide whether the disputed regions of Kirkuk, Diyala, Nineveh and Salahaddin ought to fall under the authority of the KRG or Baghdad.

It was originally scheduled for 15 November 2007 but has yet to take place.

Kurdish resentment over the government's failure to implement Article 140 was one of the issues that led to the 2017 Kurdistan Region independence referendum.

This referendum posed the question: "Do you want the Kurdistan Region and the Kurdistani areas outside the region to become an independent state?"

This referendum led to clashes between military groups controlled by Baghdad and Erbil and ultimately led to the federal government taking control of Kirkuk.

Speaking to the Kurdish media outlet Rudaw after the meeting with Barzani, Al-Sudani said: “Definitely, the issue of Article 140 is a part of the political agreement and a budget has been assigned for this purpose.”

Deep-rooted challenges

Arabisation policies that were implemented by former Iraqi leader Saddam Hussein in disputed regions like Kirkuk meant that devising a referendum that is perceived by both sides as fair is a complex task.

While the agreement on 12.6 per cent of the country’s budget being delivered to the Kurdish region sounds conclusive, in the past similar agreements have been a long-running source of conflict – with both sides accusing the other of reneging on the agreement terms.

In November 2014, Baghdad and Erbil reached a deal under which the KRG committed to exporting oil through Iraq’s State Oil Marketing Organisation in exchange for a 17 per cent share of the national budget.

In the wake of the deal, Baghdad accused Erbil of failing to provide the promised oil and the KRG accused Baghdad of withholding payments.

Problems with budget payments to Iraqi Kurdistan made headlines as recently as January this year when Iraq's Federal Supreme Court (FSC) ruled that recent federal budget transfers to the region were illegal.

The decision invalidated several orders from the government to authorise payments to the KRG. It is unclear how the FSC’s ruling will impact future budget payments to the regional government.

On 16 March, it was announced that oil revenues from the Kurdistan Region will be transferred to a bank account under federal government supervision for the first time since 2002.

While significant progress has been made between the KRG and Iraq’s federal government, there is still a wide range of emotive, unresolved issues.

Experience has shown that agreements between Erbil and Baghdad can quickly unravel and negotiators will have to tread carefully to continue making progress.

If compromises are made and common ground is found, increased political stability may also lead to better security and increased foreign investment that could benefit the whole country.

https://image.digitalinsightresearch.in/uploads/NewsArticle/10689586/main3259.jpg
Wil Crisp

Register for MEED's guest program now to access this article.

Click here to register
Exclusive from Meed
Related Articles
  • Morocco to invest $300m in Casablanca port expansion

    9 July 2026

    Marsa Maroc, Morocco’s biggest port operator, has announced that it will invest MD3bn ($300m) to expand container-handling capacity at the Port of Casablanca, following the grant of a 20-year extension to its concession for operating Container Terminal 3 (TC3).

    The concession extension will be undertaken through Marsa Maroc's subsidiary, TC3PC.

    Marsa Maroc will increase TC3’s capacity from 600,000 to 900,000 twenty-foot equivalent units (TEUs) by 2030.

    The wider programme is expected to lift the Port of Casablanca’s overall container capacity to more than 2 million TEUs.

    Planned works include extending quay infrastructure, modernising cargo-handling equipment and reconfiguring storage areas at the two container terminals operated by Marsa Maroc at the port.

    The company said that these upgrades are intended to improve operational efficiency and enhance cargo throughput.

    The latest announcement follows Marsa Maroc's unveiling of a MD21bn ($2.1bn) investment programme in March, as it looks to reinforce its position as a leading regional ports player through to the end of this decade.

    Marsa Maroc reported consolidated revenue of MD5.7bn ($578m) in 2025, a 16% rise from MD5.8bn ($500m) a year earlier.

    The company attributed the growth to increased volumes handled at its terminals, as well as a broader range of logistics services.

    Operationally, cargo throughput climbed to more than 67 million tonnes, up 6% year-on-year, and a record for the group.

    Container volumes also hit a new milestone, topping 3 million TEUs for the first time, consolidating Marsa Maroc’s standing as Africa’s fourth-largest container operator.

    Marsa Maroc is the fourth-largest listed firm in Morocco by market capitalisation, according to UK-based Drewry Maritime Research.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17588652/main.jpg
    Yasir Iqbal
  • Riyadh tenders Quality Valley mixed-use PPP project

    9 July 2026

     

    Saudi Arabia’s State Properties General Authority, in collaboration with the National Centre for Privatisation & PPP, has tendered a contract to transform the Saudi Standards, Metrology & Quality Organisation's headquarters site in Riyadh’s Al-Muhammadiyah area into a mixed-use district.

    The firms have been allowed until 8 October to submit their proposals.

    Known as the Quality Valley Riyadh project, the public-private partnership (PPP) scheme will be developed on a design, build, finance, operate, maintain and transfer basis.

    In May, MEED reported that 59 firms had expressed interest in the contract to develop the project.

    Unless otherwise stated, the interested companies are local. They now include:

    Developers / real estate developers:

    • Abdulrahman Saad Alrashid & Sons (Artar)
    • Ajdan Real Estate Development Company
    • AlBawani
    • Al-Gihaz Holding
    • Al-Ayuni Investment & Contracting
    • Alameriah Development
    • Alargan Projects Company
    • Al-Fahd Company
    • Alkhorayef Investment & Development
    • Al-Soliman Real Estate
    • Al-Saedan Real Estate
    • Asyad Holding Company
    • Arabian Construction Company (UAE)
    • Business Deal Company
    • Ezdihar Real Estate Company
    • Hay Developments
    • Heyazah Real Estate Development
    • Kinan International 
    • Ladun Investment Company
    • Lamar Holding (Bahrain)
    • Ledar Investment
    • Liwan Real Estate Development
    • Mada International
    • Naif Alrajhi Investment
    • Pan Kingdom Real Estate
    • Refad Investment & Real Estate Development
    • Retal Urban Development Company
    • Al-Mozaini Real Estate
    • Safari Group
    • SkyBridge (US)
    • Sumou Real Estate
    • Tatweer
    • Technical Development Company
    • Telad Real Estate
    • Zamil Group
    • Zeoof Real Estate Investment & Development

    Contractors:

    • Al-Kifah Holding Company
    • BEC Arabia
    • Buna Al-Khaleej Contracting Company
    • Saudi Binladin Group
    • Fanar Arabian International
    • International Hospitals Construction Company
    • Mohammed Ali Al-Swailem Trading & Contracting (Masco)
    • Mobco Civil Construction
    • Shar Company
    • Shibh Al-Jazira Contracting Company
    • Urbas Middle East (Spain)

    Consultants:

    • Alteraz Design Architectural & Engineering Consultant
    • Dar Al-Riyadh
    • Meinhardt Group (Singapore)
    • Equity Investors
    • Ahmed Al-Thunayan Investment Group
    • Aldrees Industrial and Trading Company
    • Tanami Holding
    • Own United
    • SAH First Investment Company  
    • ​Sumou Global Investment / Poly Manners Architecture
    • Financial Services Providers​​
    • GIB Capital
    • Mefic Capital
    • SNB Capital

    The project comprises commercial offices, a four-star hotel and retail facilities. The contract term is 32 years, in addition to a three-year construction period. The site covers about 191,000 square metres.

    UK-based PricewaterhouseCoopers, US-based engineering firm Jacobs and Saudi Arabia’s Al-Nowaisser & Al-Suwaylimi are advising on the project.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17603519/main.jpg
    Yasir Iqbal
  • Egypt gold project to start commercial production next year

    9 July 2026

    Egypt’s Abu Marawat gold project is on track to begin commercial production in 2027, according to a statement by the North African country’s Petroleum & Mineral Resources Ministry.

    This target was highlighted during a meeting with Abu Marawat Gold Mines Company to review and discuss the Environmental and Social Impact Assessment study for the gold mining and extraction project in the Abu Marwat area of ​​the Eastern Desert.

    Abu Marawat Gold Mines Company is the Egyptian joint-venture company set up to develop and run the Abu Marawat gold project.

    It is owned by Canada’s Aton Resources and Egypt’s Mineral Resources & Mining Industries Authority (MRMIA).

    During the meeting, Yasser Ramadan, chairman of the MRMIA, said that the Marawat project serves as a practical model for the Petroleum & Mineral Resources Ministry’s strategy to establish modern mining operations.

    The Abu Marwat project is located in the Arabian-Nubian Shield region of the Eastern Desert.

    The concession covers an area of more than 57 square kilometres.

    Aton Resources has been advancing the exploration and development of the Abu Marawat concession since its award in 2007, with active exploration starting on the ground in 2009.

    The meeting with Abu Marawat Gold Mines Company was attended by executives from the Petroleum & Mineral Resources Ministry, the MRMIA and the Egyptian Environmental Affairs Agency, as well as representatives from the Red Sea and Qena governorates, members of the House of Representatives and local community leaders.

    READ THE JULY 2026 MEED BUSINESS REVIEW – click here to view PDF

    Stress test for Gulf aviation; Mixed performance as country outlooks diverge in the Levant; GCC tourism sector pivots from crisis to recovery mode.

    Distributed to senior decision-makers in the region and around the world, the July 2026 edition of MEED Business Review includes:
    To see previous issues of MEED Business Review, please click here
    https://image.digitalinsightresearch.in/uploads/NewsArticle/17603106/main.jpg
    Wil Crisp
  • Firms submit King Salman airport project prequalifications

    8 July 2026

     

    Register for MEED’s 14-day trial access 

    Saudi Arabia’s King Salman International Airport Development Company (KSIADC) received prequalification statements on 1 July from contractors for two new packages at King Salman International airport (KSIA) in Riyadh.

    These include the construction of a permanent East-West corridor and landside access roads serving the North and South terminals.

    The scope covers the construction of roads, bridges and tunnels.

    The client is expected to float the tenders soon.

    The latest development follows KSIADC's selection of three groups to deliver the Terminal 6 apron, taxiways and other airfield infrastructure at KSIA.

    KSIADC, which is backed by Saudi sovereign wealth vehicle the Public Investment Fund, will initially deliver the project on an early contractor involvement basis.

    In March, MEED exclusively reported that KSIADC had selected three groups for the construction of Terminal 6.

    In November last year, MEED reported that KSIADC was targeting mid-2026 to award the contract for the construction of Terminal 6.

    MEED reported in May 2025 that US firm Bechtel Corporation had been appointed as the delivery partner for the terminals at KSIA.

    According to local media reports, KSIADC’s acting CEO, Marco Mejia, said the project developer has completed the project’s masterplan.

    The reports added that Terminal 6 will boost the airport’s capacity by 40 million passengers.

    The project is expected to be delivered before the start of Expo 2030 Riyadh.

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17588533/main.jpg
    Yasir Iqbal
  • WEBINAR: Saudi Giga Projects: Market Update for Q3 2026

    8 July 2026

    Webinar: Saudi Giga Projects: Market Update for Q3 2026 
    Tuesday 21 July 2026 | 11:00 AM GST  |  Register now

    Agenda:

    • Saudi projects market outlook and giga projects update
    • 2026 contract awards, project activity and market performance
    • Giga project reprioritisation, funding allocation and delivery progress
    • Key project announcements, milestones and market developments to watch
    • Major contracts awarded across construction, infrastructure and utilities
    • Upcoming tenders and contract award opportunities over the next 6–12 months
    • Geopolitical risks and their impact on project execution and investment
    • Progress across NEOM, The Red Sea, Diriyah, Qiddiya and New Murabba
    • Major non-giga project opportunities and growth sectors across Saudi Arabia
    • Short-, medium- and long-term outlook for the Saudi projects market
    • Audience Q&A

    Hosted by: Yasir Iqbal, MEED's construction editor

    Click here to register

    https://image.digitalinsightresearch.in/uploads/NewsArticle/17588750/main.jpg
    Yasir Iqbal