In a historic move, the Turkish government has provided a $500 million loan to the Kurdish Regional Government (KRG) in Iraqi Kurdistan. The Daily Sabeh reports that this loan will go towards paying the wages of KRG officials and other Kurdish public workers, neither of whom are financially supported by the central Iraqi Government.
During a visit to Turkey at the end of February, Nechirvan Barzani, the prime minister of the KRG, reached an agreement with Turkish President Recep Tayyip Erdoğan that would give the KRG $500 million to be paid back through Kurdish crude oil exports.
Alleviating Kurdish Economic Crisis
Over the past 6-12 months, budget cuts by the Iraqi central government and attacks by the self-styled Islamic State have caused severe economic crisis in Iraqi Kurdistan. The Daily Sabah reported that eighty percent of 2,500 Kurdish factories have been closed because of the economic crisis.
To overcome the crisis, the KRG made an oil export agreement with Baghdad on December 2. However, Baghdad has failed to pay the KRG, causing the economic crisis in Iraqi Kurdistan to worsen.
A Bright Future for Kurdish Oil Exports
The new oil agreement between the KRG and Turkey is a historic step towards Kurdish self-determination. The agreement sets the precedent for the trade of up to 1 million barrels per day. Currently, Iraqi Kurdistan and the Kurdish Regional Government are exporting around 450,000 barrels to Turkey per day.[Read more at The Daily Sabah]