Miftah castigates Jhagra for jeopardising IMF deal amid flood devastation

• Finance minister lashes out at Jhagra for withdrawing from commitment of providing provincial surplus.

• KP's Finance Minister Taimur Khan Jhagra's decision puts IMF's programme at stake. 
• One of the reasons include flooding which has worsened KP's situation. 
  

ISLAMABAD: Finance Minister Miftah Ismail Friday lashed out at Khyber Pakhtunkhwa's Finance Minister Taimur Khan Jhagra for jeopardising the International Monetary Fund's (IMF) programme ahead of its Executive Board meeting scheduled for Monday (August 29).

Addressing a press conference flanked by Information Minister Marriyum Aurangzeb and Coordinator to PM on Economy and Energy Bilal Kayani, Miftah criticised the PTI leaders for putting the country at stake when it is already reeling from the devastations caused by flash floods and relentless rains — which have affected more than 30 million people.

“The country is submerged with floods and you [KP government] are writing a letter regarding the IMF programme,” he said, lamenting that if PTI chief Imran Khan doesn’t come into power are then will the KP government “destroy the country?”

Earlier today a letter written by Jhagra surfaced that showed him informing the finance minister of the provincial government’s decision to withdraw from its commitment of providing provincial surplus for this fiscal year.

In a letter to Miftah, Jhagra said that the provincial government had signed a memorandum of understanding (MoU) in the "greater national interest."

However, the KP finance minister refused to implement the IMF conditions and cited several reasons for withdrawing the commitment which includes a budget allocation for the former federally administered tribal area (FATA), commitment to monthly net hydel profits (NHP) transfers, monsoon flooding among other things.

During the media briefing, Miftah mentioned that although Jhagra has assured him that he hasn’t sent a copy of the said letter to the IMF it is still circulating on social media which means that it may come into the notice of the Washington-based lender.

He further said: “A day earlier, [PTI leader] Fawad Chaudhry had said that the Punjab and KP government will not cooperate with the federal government and this letter is an endorsement of his comments.”

“Can we please stop doing politics ahead of the IMF Executive Board meeting,” he said, highlighting the importance of the Funds worth $1.2 billion for the cash-strapped nation.

“Do you want the country to default?” he said, adding that Pakistan is not just his country, it is everybody’s country and all the people should work for its betterment.

He accused the KP government of doing politics just few days before the meeting, asking them: “Could you not wait for 10 days?”

Miftah further added that he will meet Jhagra on Monday to discuss issues surrounding the IMF programme.

Taimur writes letter to Miftah

In the letter, Taimur said that according to the provincial government's estimate the overall impact of not resolving these issues is actually to create a Rs100 billion unfunded liability in the Khyber Pakhtunkhwa budget.

It further added that the monsoon flooding has further worsened the situation of the province and caused destruction in Swat, DI Khan and Tank. "The cost in terms of rescue, relief, rehabilitation and building back is likely to run into the tens of billions," it stated.

The provincial finance minister said that these conditions without the resolution make it "impossible" to leave a surplus. 

Four points raised by KP finance minister

1. Perhaps most importantly, to resolve the budget allocations for ex-FATA, which, in the absence of an updated NFC award, are decided at the discretion of the federal government.

• To resolve the issue of current budget allocations for ex-FATA, which are insufficient to cover even the monthly salary costs of existing employees.
• To finance the transfer of the Sehat Card Programme for the residents of ex-FATA, in which the federal government has chosen to unilaterally deprive the 6 million residents of ex-FATA of health insurance.
• To ensure adequate budgeting to cater to the needs of TDPs (Temporarily Displaced Persons moved into out of districts camp because of operations against militancy).

2. To commit to monthly NHP transfers based on the MoU signed between the federal government and the Government of Khyber Pakhtunkhwa in 2016. Incidentally, this MoU was signed during the previous PML-N.

3. For the federal government to immediately revive the National Finance Commission (NFC), so that these issues can be resolved more permanently.

4. For the federal government to also commit to immediately engage and resolve other financial issues with the Government of Khyber Pakhtunkhwa. These include but are not limited to; clearing outstanding liabilities to the Pakhtunkwa Pakhtunkhwa Energy Development Organisation (PEDO); resolving the issues of energy wheeling; resolving the issue of WACOG, and the availability of natural gas to the province in line with Article 158; the financing of PESCO to develop transmission and distribution infrastructure in the province; and the commitment of the federal government to not delay execution of provincially funded PESCO and TESCO projects; and not substituting the Federal Excise Duty with the Petroleum levy without provincial consent, as this amounts to unilaterally reducing the size of provincial transfers from the total quantum of federal collections.

KP minister issues clarification

Soon after the news broke, the KP minister denied news that he wrote the letter to the IMF, clarifying that he had written it to Finance Minister Miftah.

Taking to Twitter, Jhagra wrote: "This imported govt doesn't need enemies. Their own party hierarchy and their chamchas in the press are enough to sabotage their own. Why would the KP govt or I write to the IMF? Please read the letter I wrote to the federal finance minister for yourself."

The provincial finance minister said that he had raised concerns regarding the FATA budget, NFP and returned the MoU within 24 hours, adding that he had the letter written to Miftah as a follow-up on July 5 letter.