Erbil, Kurdistan Region – The Erbil Chamber of Commerce and Industry has urged foreign consulates, international organizations, and the United Nations to intervene and pressure the Iraqi Federal Government to end its suspension of public sector salary payments to the Kurdistan Region, calling the move an “unjust and harmful practice” that is crippling the local economy.

In a strongly worded statement on Thursday, the Chamber accused Baghdad of deliberately withholding funds from the Kurdistan Regional Government (KRG), exacerbating financial hardships as families prepare for Eid al-Adha. The salary freeze has triggered severe market stagnation, collapsing consumer purchasing power, and disrupting trade across the region.

“This behavior contradicts constitutional principles and international human rights laws,” the Chamber stated. “It targets not only civil servants but also merchants, business owners, and the entire regional economy.”

Describing the measure as “collective punishment” and an “economic blockade,” the Chamber emphasized that the federal government is violating both the Iraqi Constitution and a binding court ruling mandating continuous salary disbursements. The financial halt has also paralyzed private-sector activity, halting exports from Kurdistan-based traders to other Iraqi provinces.

“By withholding salaries under various pretexts, the Federal Government has deprived people of their ability to meet basic needs during Eid,” the statement added.

The crisis escalated in recent weeks after Baghdad suspended budget transfers to the KRG, citing alleged “overspending and lack of revenue handovers”—claims the KRG denies as baseless. The move comes despite prior agreements between federal and regional finance ministries and a court order requiring uninterrupted salary payments.

Political tensions have surged, with Kurdish ministers boycotting federal cabinet meetings and regional leaders warning of escalating consequences if the deadlock persists. The KRG’s Ninth Cabinet has repeatedly called for a permanent resolution, but disputes over budget allocations and oil revenue sharing remain unresolved.

As economic strain grows, the Chamber’s appeal highlights the urgent need for international mediation to prevent further deterioration in the Kurdistan Region’s economy.