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Electronic payment system to start in Kurdistan amid continued austerity measures

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Electronic payment system to start in Kurdistan amid continued austerity measures

By Rudaw 2 hours ago

Erbil currency market. Photo by Farzin Hassan/Rudaw

ERBIL, Kurdistan Region--
Electronic payments to employees in Kurdistan Region will officially start on Monday in a bid to reduce corruption in the workplaces and enhance transparency in a country where nearly 65 percent of its workforce are on government payroll, government officials said Sunday.

According to the ministry of labour and social affairs, the mandatory electronic system will in three months time reduce the number of "ghost workers" who do not actually work but are paid by the government through falsification of personnel or payroll records.

The new system will also unable individual employees to receive more than one salary, effectively limiting fraud and mismanagement of public assets, authorities say.

According to government data, nearly 1,4 million people are officially employed by the Kurdistan Regional Government (KRG), consuming an estimated 70 percent of its annual budget.

No population census has been carried out in Iraq and Kurdistan Region since 1997, but according to official surveys Kurdistan's population has surpassed 5 million in 2015, excluding the 1,8 million refugees and Iraqi displaced families currently residing in the Region.

"Payments will be made through electronic cards and we will initially begin (with employees) in the council of ministers," Minister of Labour and Social Affairs, Muhammad Hawdian, told Rudaw.

"The process will then start in the entire Region on October 19. We will then know who are paid more than one salary and also the ghost workers will be exposed," the minister said, explaining that KRG employees would only be allowed to receive their wages from one government office.

The process of registering the employees will take three months, Hawdiani said, with 76 registration offices providing the employees with individual electronic cards.

Government sources told Rudaw that both KRG Prime Minister Nechirvan Barzani and his Deputy Quad Talabani will be among the first employees to be registered and receive their electronic cards.

The payment reform is part of a larger austerity measure that the KRG has steadfastly been implementing in collaboration with the World Bank to tackle the ongoing financial crunch that has gripped its economy since early 2014. The economic reform has stirred frenzy across the Kurdistan Region with sporadic riots and strikes.

Earlier this year, KRG spokesman Safeen Dizayi revealed that only an estimated 740,000 employees among the 1,4 million that are on KRG payroll are providing actual work, with the rest of the salaries going to ghost workers or employees that receive more than one salary which he said had burdened the government's total expenses.

The KRG hopes the new electronic system will prevent mismanagement of public assets and reduce the rising unemployment in the country.

September data from the Region's statistics office show that overt unemployment has almost tripled in the country since 2010 from 4,8 percent to 13,5 although the actual unemployment is likely to be considerably higher, according to the ministry of social affairs which is currently carrying out the reform plan in cooperation with international consulting firms and the Word Bank.

The KRG has said it is confident the Region will recover from the ongoing recession that has shrunk the double-digit economy to unprecedented levels since 2003.

The Region is exporting around 650,000 barrels of oil per day and is expected to be a major producer of natural gas after the infrastructure is completed in 2017, officials have said.

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