ISLAMABAD: In an attempt to avert any possible move to endanger the IMF deal, federal Finance Minister Miftah Ismail will sit down with his Khyber Pakhtunkhwa counterpart on Monday (tomorrow) to resolve differences between the Centre and the province over outstanding issues.

Talking to Dawn on Saturday, Mr Ismail confirmed he had called KP Finance Minister Taimur Khan Jhagra for a meeting, adding he was ready to help resolve any issue and release due financial flows to the province.

The meeting comes against the backdrop of a series of events emerging out of a letter written by Mr Jhagra to Mr Ismail on Friday, just three days ahead of the IMF executive board’s meeting scheduled for Aug 29 to approve the disbursement of a $1.18 billion tranche to Pakistan under a bailout package.

In the letter, Mr Jhagra informed Mr Ismail that his KP administration might find it difficult to run a provincial surplus this year in view of flood-related damages.

IMF sources say Jhagra’s letter ‘will not affect’ deal

Mr Jhagra also highlighted outstanding issues like budget allocations for ex-Fata, monthly transfer of net hydel profits as per agreed terms, and immediate revival of the National Finance Commission award.

The KP government earlier signed a memorandum of understanding (MoU) as part of a key IMF condition that provinces would provide a budget surplus this fiscal year.

Asked whether he or his ministry took up the letter issue with the IMF, Mr Ismail replied there was no need for it. “We have not shared it,” he said, adding it would be shared if need be.

Meanwhile, sources at the IMF said Mr Jhagra’s letter “will not affect” the deal Pakistan is negotiating with the lender.

Mr Ismail told Dawn his ministry had provided KP with a total of Rs112bn so far for rehabilitating people displaced by the floods. “We are ready to support the province,” he said.

As for erstwhile Fata regions, Mr Ismail said he had already requested the provincial government to provide details “in black and white” of employees in tribal areas now part of KP.

“They have not provided details so far,” he said, adding that it was the right of the federal government to know where the money would be spent. “We really don’t know how many posts were created in the tribal areas.”

Mr Ismail slammed PTI leaders Fawad Chaudhry and Shaukat Tarin for suggesting that Punjab and KP governments would not cooperate with the federal government over the IMF programme.

‘You have to shout to be heard’

When approached, Mr Jhagra confirmed to Dawn that he had received a call from his federal counterpart. “We finally have time on Monday to resolve our issues,” he said, adding that he was requesting for a meeting for the last 50 days.

“So sad that in their [the new government’s] Pakistan, you have to shout to be heard,” he said, adding that previously six dates were proposed for a meeting but were never honoured.

He said the signing of the MoU (for a budget surplus) was conditioned with the resolution of all outstanding issues of the province.

He said the provincial government was bearing the insurance payment of Sehat card of six million ex-Fata residents. Besides, KP was contributing to the salaries of tribal employees from the provincial budget.

He also claimed that despite commitment, the federal government reduced the budget allocation of ex-Fata to Rs63bn from Rs75bn. “The reduction was made in the last cabinet meeting,” he said, adding that the actual commitment was more than Rs100bn at the time of Fata’s merger with KP.

Mr Jhagra also alleged that the government was not reviving the National Finance Commission award and blamed the federal finance ministry for not properly involving the provincial ministry in any international commitment.

PTI Secretary General Asad Umar also come in Mr Jhagra’s support, saying he had asked for “KP’s rights” and no one should “suppress his voice”.

Mr Umar said the KP finance minister was “demanding the right of the province. Don’t you dare try to suppress his voice”.

Mr Umar said the coalition government was “attempting to pin the blame for its own failures” on Mr Jhagra. He said the federal government was “incompetent” because “no agreement with the IMF has been reached in four and a half months”.

‘Derailing political machinery’

Meanwhile, during his visit to Sindh, Prime Minister Shahbaz Sharif mentioned that a meeting with IMF officials was due to be held on Sunday (today).

Criticising the PTI without naming it, he said a party was trying to “derail the country’s political machinery” for its “own selfish interests” when it should be supporting the government in this “troublesome time”.

Anwar Iqbal in Washington also contributed to this report

Published in Dawn, August 28th, 2022