In order to ensure that the final stages of talks leading to the release of the IMF tranche are not derailed, federal Finance Minister Miftah Ismail will meet with KP’s Finance Minister Taimur Khan Jhagra today (Monday) to resolve differences between the Centre and the province over outstanding issues. This meeting comes following a series of events over the past couple of days, with Mr. Jhagra sending a letter on Friday to his federal counterpart stating that his KP administration might find it difficult to run a provincial surplus this year in view of flood-related damages.

Earlier, the KP government had signed a memorandum of understanding (MoU) as part of a key IMF condition that provinces would provide a budget surplus this fiscal year. However, this was apparently agreed upon with the condition that the center would allay the concerns of the province. In his letter, Mr. Jhagra listed four key issues, including the resolution of budget allocations for erstwhile federally administered tribal areas (FATA), monthly transfers of Net Hydel Profits as per terms specified in an MoU signed between the federal and provincial governments in 2016, and the immediate revival of the National Finance Commission award.

Perhaps the timing and the manner of the letter shared by Mr. Jhagra was not ideal given the crisis situation in the country and the imminent talks with the IMF on August 29, but there are some legitimate issues that have been raised and apparently a meeting had been requested on multiple occasions over the past two months. At the same time, FM Miftah Ismail is right in pointing out that the politics surrounding the IMF deal is unfortunate and statements from certain PTI leaders that the Punjab and KP governments would not cooperate with the federal government over the IMF programme are condemnable.

The good thing is that IMF sources have indicated that Mr. Jhagra’s letter will not impact the deal Pakistan is negotiating with the lender. Despite the circumstances that made this meeting possible, it is good to see the two sides agree to come to the table to resolve issues. We need more of this going forward for the greater interest of the country.