At a Glance

• Erbil demanded the integration of 86,000 contract workers into the 2027 federal budget, which Baghdad rejected over fiscal constraints.
• The federal government offered partial approval only for contract workers registered on payroll lists under the previous federal administration.

Channel8 has learned that the process of granting permanent status to thousands of contract teachers and employees from the Kurdistan Region has stalled in Baghdad after the federal government rejected the Kurdish delegation's primary request.

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Key Statements and Focus Area

• The Kurdish negotiating delegation formally demanded the inclusion of all 86,000 contract employees and teachers as permanent staff within the federal budget framework. 
• Baghdad officially rejected the comprehensive request due to budget constraints, stating it lacks the financial capacity to absorb the full cohort or hire additional medical and top-three graduates.

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As a contingency, the Kurdish delegation proposed that if Baghdad cannot absorb the entire workforce, the Kurdistan Region should receive the authority to independently select which teachers or employees to permanentize. 

In parallel, an alternative plan was discussed to prioritize contract teachers, medical graduates, and top-three university alumni in the current fiscal budget.

Despite the initial rejection, Baghdad granted preliminary approval for a limited number of contract workers, provided their names were registered in the payroll lists submitted during the tenure of the previous federal government.

FYI

The long-standing dispute over public sector employment between Erbil and Baghdad intensified as the Kurdistan Regional Government (KRG) faced mounting internal pressure over financial stabilization. 

For years, tens of thousands of contract teachers and civil servants across the Kurdistan Region have endured severe financial hardships, driven by chronic delays, reductions, or outright suspensions of their monthly salaries. 

The proposal originates directly within the official proposals submitted by the KRG and has become a central point of friction in the latest bilateral federal budget discussions in Baghdad.

Channel8 reported earlier that a technical and financial delegation from the Kurdistan Regional Government is scheduled to arrive in Baghdad this week to participate directly in drafting the Region's share of the 2027 federal budget.

The high-stakes negotiations will primarily focus on the rights of public sector employees, civil and military promotions, the hiring of top university graduates, the permanent employment of contract workers, and the Peshmerga’s allocation within the sovereign budget.

Additionally, the long-standing dispute over regional oil delivery remains a significant sticking point between the two sides.

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