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Lanka may have come a long way to gain an IMF staff pact but she has a long way to go to win the USD 2.9 billion bailout and the all-important IMF seal of approval, with much depending on whether she can woo the top three creditors to come to the ‘debt structuring’ table, if  at all.

Last week, on the eve of their arrival in Sri Lanka, the IMF team did well to warn the Government when they said that they ‘would require adequate assurances by Sri Lanka’s creditors that debt sustainability will be restored’.

As now, with the IMF staff agreement secured on Thursday, it seems so near and yet so far. And so airy fairy. Upto now, the net amount by which the Government expects each of its top three creditors, namely, India, China and Japan, to reduce Lanka’s debt to achieve the target reduction, has not been defined. Except for a vague reference to sustainable debt, nor has the amount which will constitute the IMF’s notion of ‘sustainable debt’ been disclosed.

NOW THE HARD SLOG BEGINS: The IMF team formally announces the staff agreement but says it will play no part in the negotiations which Lanka will have to do on her own

The Central Bank Governor can only say, it should be a figure acceptable to the IMF, but does he know what it exactly is? Play it by ear, so to say, and see how it will unfold, appears to be the name of the game. At the auspicious start of the voyage, the quest seems to be for an elusive port which none knows exists until it’s reached.

Simultaneously, except for regular heart jerking expressions, ‘we will always support the people of Sri Lanka in these times of the gravest hardships’ and so forth,  none of the creditors have yet formally expressed any willingness to restructure the debt and accept far less for what they have already given. They have all maintained a studious silence on that score.

Nor made known, if so willing to make the sacrifice,  is what they will require as their quid pro quo to balance their books and justify to their people their otherwise altruistic philanthropy to a beggared nation in need. After all, these nations, which have come up in the world with great struggle and effort to amass their riches, are no Venetian Shylocks to be palmed off by sentimental sweet talk to forego their legally due pound of flesh and settle for a puny scrap of meat, when their nation’s interest demands they take the blood too.

Instead what the Lankan people have been given is the soothing impression that economic recovery is round the corner and all will be well, once the restructuring talks end and the IMF gives the bailout nod; and thus to bear the crippling hardships and further rocketing prices with forbearance. They have been asked to bite the bullet and pay up for leaders’ corrupt excesses with hope as bait, and the stick to browbeat if they dare to protest their pains and crowd the jails with their presence.

The IMF staff pact is certainly a stepping stone but we haven’t crossed the Rubicon yet. Before we reach the banks, the Government faces two challenges. First, to get the creditors to the table and, second, through tortuous negotiations, to persuade them to make significant concessions to Lanka.

China has already intimated that she will not be willing to restructure the debt but, instead, be willing to grant extra time for payback, something unacceptable for IMF debt restructuring.

Central Bank Governor Weerasinghe revealed at the MPs’ meeting on Thursday, that, ‘’after Lanka made default, China had proposed that we pay her existing debt and she will give a new loan to cover the same amount. This was unacceptable. The whole restructuring process would have failed. The other creditors would have been against having to take debt haircuts while China didn’t have to.’’

China’s stance may prove to be an insurmountable bar to Lanka’s hopes for a quick IMF fix. As the IMF team warned Thursday: ‘Failure to get the creditors’ assurances will deepen Lanka’s crisis.’

Thus with pressure mounting upon the Government to obtain ‘adequate assurances from creditors’ to achieve the required sustainability of debt, President Ranil Wickremesinghe, in an interview with Nikkei Asia published last week, said Lanka has informed her biggest creditor, China to change her tune on debt and, along with other creditors, ‘sing from the same hymn sheet.’

The fresh appeal to China to get off her intransigent high horse and fall in line with the rest and be on the same restructuring page as India and Japan, was a daring attempt to urge China not to play the lone rogue elephant but join the herd and help Lanka – an old friend – in her hour of distress.

But China was in no mood to join the salvation choir and harmonise with two of her perennial foes. Due to historical grievances and geopolitical disputes, China and Japan both hold each other in mutual hostility.  It’s the same with bordering India where it’s one of mutual distrust, played out again over the Chinese research ship Yuan Wang’s arrival at Hambantota Port two weeks ago.

The day following the President’s call for China to keep tune, China fired back saying, the ball is in Sri Lanka’s court. A Chinese Embassy spokesman told the Daily Mirror: ‘We sent proposals to the Finance Ministry months ago. The Chinese position was communicated in a phone call to Prime Minister Mahinda Rajapaksa by Chinese Premier Li Keqiang. But, there was no response from them. Also, Sri Lanka insisted that it should complete the agreement with the IMF first. The ball is in Sri Lanka’s court.”

China had earlier expressed her displeasure in Sri Lanka seeking recourse to the West dominated IMF for a bailout. On April 25, Chinese Ambassador Qi Zhenhong told the media that, ‘China has done its best to help Lanka not to default on its foreign debt but sadly they went to the IMF and decided to default.’ The message China has hammered home countless has always been: Leave the IMF’s western fold and come to China. China will help you.

Last week, Ambassador Qi Zhenhong, writing in the Sri Lanka Guardian on August 26, kicked up a row with India for protesting over Yuan Wang docking at the Hambantota port, saying: ‘External obstruction based on so-called ‘security concerns’ but without any evidence from certain forces is de facto a thorough interference into Sri Lanka’s sovereignty and independence’.

Furthermore, he wrote on how China has been the defender of a State’s ‘right to non-interference in the internal affairs of a sovereign nation’ by another State. Zhenhong said: ‘If China and the international society had not resisted such extremely irresponsible and irrational acts by the US side, the general principle of Non-Interference, National Sovereignty and Territorial Integrity in international relations would have just become a mere scrap of paper. More seriously, the world might slide back to jungle rules and barbarian times’.

But didn’t this outdated concept of ‘non-interference’ by other states, allow Communist Cambodia’s Pol Pot to commit genocide against his own people in the 70s, and permit the Chinese Government to commit the Tiananmen Massacre 33 years ago when the Chinese Army with their assault rifles and tanks mowed down over 2000 student demonstrators on June 4, 1989 for asking their leaders for greater accountability, for freedom of the press and free speech, for democracy?

Didn’t this anti-diluvium doctrine that forced the world to look askance in the 80s, cause ‘the world to slide to jungle rules and barbaric times’?

Today human rights have international jurisdiction, unlike in the last century when it was still an evolving concept. The UNHRC was only set up in 2006 to probe rights violations.

Zhenhong slams countries “far or near” for “bullying” the island nation and says that, ‘China has always been supporting Sri Lanka in the international fora for protecting its sovereignty’ and that she will continue to do so. He says, ‘next month, the 51st session of the UN Human Rights Council will be held in Geneva where human rights issues in Sri Lanka might probably be stirred up again’.

He asks, in his article: ‘Will they help Sri Lanka to ease its human rights crisis by providing concrete support? Or will they again use human rights as a cover-up tool to interfere into the island nation’s internal affairs and continue to rub salt into the wound of Sri Lankan people?

Such ‘interference’ will be most welcome, and not held as a sinister attempt to ‘rub salt into the wound of Sri Lankan people’, but, instead, embraced as the only shield and talisman of protection the people have against excesses of power by leaders with a dictatorial bent. The international fora is the people’s last court of appeal for justice.

Without such international pressure exerted on despotic Governments, the people would be rendered vulnerable to be steamrolled into submission and even be mercilessly dealt with as the Tiananmen Square students were on 4 June 1989.

It is certainly true that China has made no secret of her support to Lankan Governments at the UNHRC and had even given the assurance that, if it was needed, she would use her veto power at the UN Security Council to prevent any UN sanctions from being placed against Lanka. No doubt, she will keep her word and support Lanka at the UNHRC this September, too, if ‘things stirred up again.’

But it is a support the people can do well without. It is this sort of support that has enabled the previous Mahinda Rajapaksa regime to adopt a cavalier attitude towards human rights issues, knowing full well China will support any excesses if it came to the crux.

Wasn’t it this support, together with her deep pockets, enabling the regime to violate human rights at will and rule with an iron fist in velvet glove and also have access to her kitty that made China the Rajapaksa darling? That laden Lanka with many of China’s unsolicited fancy projects which turned out to be white elephants later? That ended up making Lanka almost a vassal state of China, heavily in her debt and at her mercy? That brought her to this sorry pass?

If the western powers use ‘human rights’ as a tool to interfere on the ground it is to safeguard the people, hasn’t China used her ‘protection’ power as a tool to save their despotic leaders from the international backlash and enticed them to hock the country, lock stock and barrel, for mutual benefit?

Isn’t China the spider which has woven the web of temptation and Lanka, the corrupted fly caught in its snare? Hasn’t she a moral duty to ease Lanka’s debt by agreeing to restructure it?

On Thursday after the IMF team announced the staff agreement, China welcomed it, hailing the positive role the IMF team had played in supporting Lanka. China said she hoped ‘Sri Lanka will work actively with China in a similar spirit and work out a feasible solution.’ This may suggest, atheist China intends to sing solo her own number and not from a common Christian hymn sheet.

But on Saturday, China changed her tune. China’s Foreign Ministry said: “China will continue to support the relevant financial institutions in consultation with Sri Lanka to find tangible solutions.’ But will she really?  Especially in the light of Central Bank Governor Weerasinghe’s observation, which he also shared with the MPS on Thursday that ‘China will give loans only to settle their existing loans. They have never given us a loan to pay another’s loan. They will talk of giving but will never give’’.   Well, we shall have to wait and see whether deeds will follow words.

And what of India? She appears somewhat miffed over Lanka caving in so readily to Chinese demands for Yuan Wang to dock at Hambantota Port without due concern to India’s security fears. Last week she may have raised the red flag when, for no explicable reason, she issued a travel advisory, warning her citizens to ‘exercise caution’ before visiting Lanka. It came in the same week many European nations, including Britain, were easing their travel advisories to the island.

Last Saturday, taking umbrage over Zhenhong’s article, the Indian High Commissioner was working late to tweet at 9.30pm: ‘Sri Lanka needs support, not unwanted pressure or unnecessary controversies to serve another country’s agenda.’ In the regional battle for constant one-upmanship to gain the most and yield the least, what secret strategies she intends to adopt – when even her USD 4 billion lifesaving credit lines have failed – to nail wavering ingrate Lanka firmly to her mast, remain anyone’s guess.

The IMF staff agreement has put Lanka on the road to Damascus. But further hurdles lie to be overcome before she can arrive at the gates of transformation in her fortunes.

At Thursday’s press conference, the team listed some of the key conditions that will have to be met before the bailout proposals are submitted to the IMF Board for final approval. Among them, apart from stringent domestic economic reforms, are

• Debt relief in line with the IMF programme from creditors
• Financial assurances from the creditors are  a must
• Additional financing from multi-lateral partners will be needed to close financing gaps and
• Final approval from the IMF’s Directors to receive USD 2.9 billion in 8 tranches within 4 years with Board approval necessary for each tranche disbursement.

It will certainly be a long way to Tipperary but – it seems – Lanka’s hope’s right there.

And the message to the people: Don’t uncork the bubbly and start dancing on the streets yet. For now, far best to hold your breath, touch wood, touch gold, and pray all will end well.