By Simon Kent.
The Kurdish Regional Government has announced a plan to implement a series of economic reforms in the face of a growing recession.
Currently, the region has debt of up to $18 billion, a crisis made far worse by expenditures in the war against ISIS, the collapse in oil prices and a bloated public sector payroll which consumes 70% of the region’s budget. Public servant salaries are costing the region almost $800 million a month.
The new reforms will involve the slashing of public sector pay, the restructuring of pensions and the elimination of some perks for politicians and senior public servants. Electricity and fuel subsidies will be assessed as well.
Notably, these are the same challenges Baghdad has been trying to overcome, including the presence of “ghost employees” at state owned companies. Two Kurdish lawmakers complained that these new cuts were only superficial, and much deeper reforms were needed to help the economy.