The article below originally appeared in the Wall Street Journal on March 14, 2016. The article was written by Adam Entous, photo courtesy of Alice Martins (AP).
The Obama administration is in talks to provide an emergency aid package to the cash-strapped Kurdistan Regional Government (KRG) in Iraq after concluding that the KRG’s inability to pay Peshmerga fighters their salaries poses a threat to the U.S.-led campaign against Islamic State, U.S. officials said.
The Peshmerga have been one of the U.S.’s most effective partners on the ground against the extremist group. But the KRG’s budget has been stretched to the breaking point by a slide in oil prices, a bloated public-sector payroll and the high cost of absorbing nearly two million people displaced by the fighting, among other factors, American and Kurdish officials say.
Impending Financial Crisis
Recent internal State Department and U.S. military assessments of the KRG’s financial crisis have warned the White House that the regional government’s lack of funds to pay salaries to its fighters and cover other costs could slow the counter-Islamic State campaign, particularly operations against the Islamic State stronghold of Mosul and other areas.
Peshmerga salaries are already at least three months in arrears, according to the assessments. The financial crisis, U.S. officials warned, threatened the ability of the Peshmerga to conduct offensive operations and to participate fully in the Mosul campaign.
“We can’t afford for them to have a crisis that really prevents them from fighting,” a senior Obama administration official said. Because of limitations on the U.S.’s authority to directly pay Peshmerga salaries, the Obama administration is looking at providing other types of financial support to KRG fighters, including stipends, food and fuel.
Obama administration and KRG officials have been discussing the size of the proposed emergency aid package in recent weeks, according to both sides.
$200 Million Needed
Kurdish officials initially requested at least $200 million in emergency aid for salaries and other needs, according to people close to the discussions. U.S. officials pushed back and initially estimated the KRG’s immediate needs at closer to $50 million to cover wages, food and fuel for Kurdish forces, including fighters that would participate in the Mosul operation. Officials said the current talks center on a financial package of under $100 million.
American officials say the proposed support to the KRG would require Baghdad’s approval, which they expect the central government to provide given the importance of keeping the Peshmerga fully engaged in the fight.
The Obama administration’s options for assisting the KRG have been limited because the regional government isn’t a sovereign state, precluding the U.S. from supporting a KRG request for loans from the World Bank and the International Monetary Fund.
The KRG already receives weapons and ammunition free of charge from the U.S.-led coalition, but Kurdish officials have long complained that those supplies have been insufficient to help the Peshmerga effectively fight Islamic State.[Read more at WSJ]