CLOSING DOORS: AUSTRALIA’S HOUSING CRISIS AND ITS CONSEQUENCES FOR ASIA

How Australia’s Housing Crisis is reshaping its politics, closing its doors, and reordering its place in Asia

By Sisaru Diyunuge

Imagine paying over half of your take home pay simply to keep a roof over your head.

Imagine being a nurse, a teacher, or a tradesman or woman – the very people any society depends on to function and still being unable to afford to live within an hour’s commute of where you work. This is daily life for hundreds of thousands of Australians today. Australia, long celebrated as one of the worlds’ most livable nations, is navigating a housing crisis so significant that it had begun to strain the social contract, reshape its politics, and in ways that matter directly on how Australia engages with all of Asia.

The story of how the ‘lucky country’ - what Australia is commonly referred to as; how a wealthy western-democracy arrived at this juncture is complex. It involves decades of political miscalculation, an addiction to property as the primary vehicle of national wealth, the economic arithmetic of post-COVID migration, and a construction industry that has consistently failed to build enough homes. Yet in the overheated language of electoral politics, this complex story has been distilled to a single, incendiary word: immigration.

The consequences of that distillation reach beyond Australia’s shores. For the approximately 200,000 plus Sri Lankans who call Australia home and the 1,000,000 plus Australian-Sri Lankans – the political weather is shifting in ways that are already tangible and may grow significantly more so. For Sri Lanka and Asia at large, Australia as a partner in trade, education, and diaspora remittances would demand careful attention moving forward.

The Making of a Crisis

Australia’s housing crisis was not a result of an overnight change in policy. Policies which favoured the interests of existing property owners over those who had yet to enter the market were introduced at least three decades ago.

The fundamentals are straightforward: the pace at which homes were built was not commensurate with the increase in population. The reasons are multi-faceted and intertwined: restrictive zoning rules that prevent higher-density housing in desirable urban areas, as slow and fragmented planning approval systems spread across hundreds of municipal councils, a building sector plagued with labour shortages and rising material costs, and a tax system that, through policies such as negative gearing and the capital gains tax discount, has consistently incentivized the purchase of investment properties over the construction of new ones.

The tax incentives deserve particular scrutiny. Negative gearing is the ability to offset losses on an investment property against other income. And the halving of capital gains tax (a levy on the profit made from selling an asset) on assets held for more than a year have effectively made the Australian property market a subsidized investment vehicle. This has driven prices higher, enriched those already on the property ladder, and made entry progressively more difficult for those who are not.

The COVID-19 pandemic added its own disorienting chapter. When Australia closed its borders in 2020, international students and temporary migrants departed en masse. Population growth slowed dramatically. One might have expected house prices to fall. They did not. Instead, prices surged by roughly 25 per cent in little over a year – a period of historically low immigration. This inconvenient fact is rarely mentioned in political discourse, yet it demolishes the simplest version of the argument that immigration is the primary driver of unaffordability.

The Political Explosion

Into this volatile environment has stepped Pauline Hanson and her One Nation party, offering an explanation that is simple, emotionally resonant, and arguably misleading. The argument is essentially this: too many migrants are competing for too few homes, and the solution is to drastically reduce immigration.

One Nation is not a novel phenomenon. Ms Hanson first came onto the Australian political scene in 1996 after winning a lower house legislative assembly seat for a rural electorate in the state of Queensland. Immediately thereafter, her rhetoric of anti-immigration and anti-Aboriginal platform was made clear. She was eventually sidelined by the Liberal party which represents the traditional center-right, only to return in 2016 to the upper house of the Australian federal Parliament as a senator with renewed relevance. But what is happening in 2026 represents something qualitatively different: a potential structural realignment of Australian politics rather than a cyclical protest vote. In the 2025 federal election, One Nation received roughly 6 per cent of the primary vote, a modest result. But the tremors began almost immediately after Australian Labour’s landslide victory after the popularity of the traditional center-right Liberal party started to slip amongst rural and outer-suburban conservative voters to One Nation and as well as more affluent, university-educated and/or white-collar urban voters who now moved to an alternative political force to One Nation and the Liberal Party commonly referred to as the “Teal Independents” with a more centrist, pro-market attitude.

Post-election surveys conducted by researchers at Macquarie University and the Australian National University found that 60 per cent of respondents believed immigration had gone too far or much too far. Among One Nation voters and supporters of the small far-right Trumpet of Patriots part, that figure approached 90 per cent. Significantly, anti-immigration sentiment is not confined to the elderly or the economically marginalized. Among Australians aged 18 to 34, a demographic that has borne the sharpest pain of housing unaffordability, 32 per cent identified immigration as a leading cause of their predicament.

What makes the numbers particularly striking in a global context is that Australia has compulsory voting. Every eligible citizen must cast a ballot. This is not a case of a motivated extremist minority turning out while the moderate majority stays at home, as has happened in some European and American political upheavals. When one in four Australians indicate they would currently vote for One Nation, including people who might not advertise that preference to neighbours or colleagues, but who mark it nonetheless in the privacy of the ballot box.

The sociological profile of One Nation voters has also evolved. While the party’s base has historically been male, mostly rural, and blue-collar, economically insecure workers who on most measures of class interest are indistinguishable from Labour voters – the housing crisis has extended its appear into the outer-suburbs and among song younger renters who feel permanently locked out of the dream their parents took for granted.

Analysts note that since 1993, the combined vote for candidates outside the two major parties has risen from under 11 per cent to nearly 34 per cent in 2025. For the first time in polling history, a member of the traditional two-party duopoly – the Liberal Party – recorded a lower primary vote than a minor party. The era of rusted voters reliably supporting Labor, or the Liberal Party and their rural coalition partner the Nationals Party appears to be ending, and One Nation is the primary beneficiary on the right.

The Gas and the Kitchen Table

To understand why Australia’s housing crisis extends so far beyond its borders, one must understand the peculiar economics of Australian prosperity- and the tensions those economics are now generating.

Australia is, in one sense, extraordinarily wealthy. It sits atop some of the world’s largest deposits of iron ore, coal, and natural gas. These resources have been the engine of economic growth for decades, and their primary customers are in Asia: China, Japan, South Korea, India and Taiwan. More than 80 per cent of Australia’s coal exports flow to these markets. Iron ore, the steel-making raw material extracted primarily from Western Australia, goes overwhelmingly to China – in 2023, China purchased 84 per cent of Australia’s iron ore exports, which in turn accounted for nearly a quarter of all Australian export revenue. In short, the Chinese construction and manufacturing boom built much of the financial comfort that Australians have enjoyed, and that comfort is now threatened by its own internal contradictions.

Liquified natural gas (LNG) paints a revealing story, and one that is generating significant and underappreciated domestic tension. Japan is Australia’s largest LNG customer, importing approximately $39 billion in 2024 alone. These are multi-decade contracts, negotiated over years, underpinned by massive Japanese investments in Australian export infrastructure. Japan’s Inpex Corporation operates Ichthys LNP project in Australia’s Northern Territory, which at the time of its approval represented the single largest overseas investment ever made by a Japanese company.

The problem is that ordinary Australians are paying sky-high energy prices while this gas flows offshore under long-term contracts. Critics argue that Australia exports gas at favourable rates to Japan and South Korea while domestic consumers and businesses faced among the highest energy costs in the developed world. A 2025 analysis found that Japanese companies resold between 10 and 13 million tons of Australian LNG in that year alone. In plain terms: Japanese intermediaries were on-selling Australian gas to third-party markets at a profit, while Australians struggle to heat their homes.

The relationship is further complicated by climate politics. Australia’s Labor government has pledged significant emissions reductions by 2035 yet continues to approve LNG expansion projects backed by Japanese investment. When the government applied the ‘Safeguard Mechanism’ — a policy requiring large industrial emitters to reduce or offset carbon emissions — Japan’s senior energy executives publicly warned that this threatened the reliability of supply. It was an extraordinary intervention by a foreign corporate interest in Australian domestic policy, and it did not go unnoticed by Australian voters already skeptical of globalization. Critics have accused the Australian government of prioritizing the interests of foreign energy corporations over those of its own citizens.

Queensland’s unilateral increase of coal royalties in 2022 similarly provoked the Japanese Ambassador to Australia to issue a public rebuke — a rare breach of diplomatic protocol that underscored how deeply Asian governments view Australian resource policy as a shared concern. These episodes have fed a narrative, particularly on the populist right, that Australian politicians have sold the country’s resources cheaply to foreign buyers while ordinary citizens are locked out of affordable housing and paying excessive energy bills.

China, Iron, and the Weight of Dependence

Further, the iron ore relationship with China is existential. No comparable economy in the modern world depends as heavily on a single export to a single customer as Australia depends on iron ore sales to China. When China in 2020 imposed sweeping trade restrictions on Australian goods such as barley, wine, coal, lobsters as retaliation for Australia’s call for an international inquiry into the origins of COVID-19, Australian agriculture suffered severely. Yet the broader economy held up, partly because iron ore was never restricted: Beijing needed it too much. The episode demonstrated both Australia’s vulnerability and its leverage. China purchased 69 per cent of global iron ore exports in 2023 — finding alternative buyers for Australian supply would be extraordinarily difficult. This mutual dependence has produced what analysts describe as a peculiar intimacy: two countries with deepening strategic differences and a profound economic codependency neither can easily escape.

The Albanese government, elected in 2022, successfully normalized relations with Beijing, and by late 2024 virtually all trade restrictions had been lifted. But the underlying structural anxieties remain. As China’s property sector slows — the construction boom that drove steel demand and therefore iron ore demand is cooling — Australia’s export revenue faces structural headwinds that no diplomatic normalisation can fully address. The mining wealth that has subsidised Australian living standards and insulated governments from making hard housing-policy choices may be entering a period of decline precisely as the domestic political pressures it has obscured become impossible to ignore.

What This Means for Sri Lankans in Australia

Against this backdrop, the situation of Sri Lankans in Australia — people spanning citizens, permanent residents, temporary workers, and students is increasingly precarious.

Sri Lankans have built a remarkable presence in Australian professional life. Between 2020 and 2024 alone, more than 15,000 Sri Lankans entered Australia through skilled migration programmes, making the community the sixth largest in the skilled employment visa category. In 2024, more than 32,000 Sri Lankan students held Australian student visas, making Sri Lanka the eleventh largest source of international students in the country. The city of Melbourne in the State of Victoria has become home to a dense Sri Lankan community. Professionals in medicine, engineering, finance, information technology, and education — fields where Australia faces genuine shortages — form the backbone of the Sri Lankan diaspora.

Yet the political climate is changing in ways that affect even those who are already there, and that are closing doors on those who wish to come. In February 2026, Australia’s Department of Home Affairs recorded a 38 per cent refusal rate for Sri Lankan higher education student visa applications — placing Sri Lanka among the five countries with the highest rejection rates globally, behind Nepal (65 per cent), Bangladesh (51 per cent), and India (40 per cent). As recently as late 2025, Sri Lanka had enjoyed ‘Evidence Level 1’ status under Australia’s Simplified Student Visa Framework, meaning streamlined processing and minimal documentation requirements. By January 2026, Sri Lanka had been downgraded to Level 2, ending the minimal-evidence era for most applicants.

The official reason given is integrity: concerns about fraudulent financial documentation and ‘search fund’ schemes in which funds are temporarily moved to pass verification checks. These concerns are real and not confined to Sri Lanka. But the broader context is unmistakable.

Australia has signaled that student visa programmes are no longer treated solely as educational pathways but also as ‘a key lever of migration control.’ International student numbers are being used as a tool to reduce net migration figures in response to domestic political pressure driven in no small part by housing unaffordability.

The practical consequences for Sri Lankan families are severe. Each rejected applicant loses a non-refundable visa application fee of approximately AUD 2,000 and must decide whether to reapply, pivot to Canada or the United Kingdom, or abandon overseas study entirely. Australian universities, meanwhile, risk missing enrolment targets in postgraduate programs that have historically relied heavily on South Asian students. The education consultancy sector in Colombo warns that repeated policy shifts and opaque assessment criteria are eroding trust in Australia as a destination, potentially causing long-term reputational damage that outlasts any political cycle.

For Sri Lankans already in Australia as temporary residents or on bridging visas, the uncertainty is of a different and rather sinister nature as they are in permanent limbo. Processing times for permanent residency applications have lengthened substantially. The political noise around immigration has translated into a bureaucratic culture of heightened scrutiny, where caseworkers apply discretion more conservatively than in previous years. Community organisations report growing anxiety among Sri Lankan families who have built lives in Australia over years or decades, but whose immigration status remains unresolved.

The rise of One Nation is not yet a governing proposition, but it shapes the political environment within which all parties operate. When 60 per cent of the electorate believes immigration has gone too far, mainstream parties — the governing Australian Labor party included — respond by tightening policies rather than defending the economic and social case for migration. The result is a ratchet: the political pressure moves in one direction only, and the Sri Lankan community, like other migrant communities, bears the costs of a debate it had no part in creating.

Will Australia Turn Transactional?

The question that should concern policymakers in Colombo — and in most Asian capitals — is whether the political forces now reshaping Australia will produce a country that is more transactional in its engagement with the region: willing to sell coal and LNG and iron ore, but increasingly reluctant to accept the people, students, and cultural exchange that give substance to genuine partnership.

There are reasons to worry about the One Nation worldview — and, to a lesser but still significant degree, the mainstream political response to its rise — tends to separate ‘good’ trade from ‘problematic’ immigration. Resources can be exported; gas can be contracted; iron ore can be shipped. These transactions create wealth, or at least the illusion of it, without asking Australians to share their neighborhood, school, or suburb. People are more complicated. They need housing. They change the character of communities. They are visible in ways that a cargo vessel departing from Port Hedland is not.

This division is, in important respects, a false one. Australia’s multicultural communities, including its large Indian, Chinese, Vietnamese, and Sri Lankan diasporas are precisely the soft-power infrastructure that gives Australian engagement with Asia its depth and credibility. The Australian Department of Foreign Affairs and Trade’s own 2025 strategic snapshot acknowledged that the country’s multicultural communities provide ‘insights, skills and perspectives’ that strengthen its engagement with the world. The $33 million ASEAN-Australia Centre, recently established to build business, educational, and cultural connections with Southeast Asia, exists because Australia’s policymakers understand that trade alone does not build durable partnerships.

But understanding and political practice are increasingly divergent. A government that responds to One Nation’s rise by cutting student visas and tightening migration is, whether it intends to or not, dismantling the human architecture of the very relationships it simultaneously claims to be investing in.

The LNG and gas contract controversy adds a further layer of irony. At precisely the moment when ordinary Australians are questioning whether the country’s resource export arrangements serve Australian interests, Australian governments are under intense pressure from Asian energy corporations to maintain and extend those same arrangements. The result is a political economy in which fossil fuel exports to Asia are protected — because the industry employs 215,000 Australians and generates enormous government revenue — while the human connections that give Australia’s Asian relationships their social and cultural dimension are quietly eroded.

What Sri Lanka Should Understand

For Sri Lankans reading this from Colombo or Kandy or Galle, the implications are practical as well as strategic. In the near term, students and families considering Australia as an education destination should approach the process with greater care and documentation than was previously required. The era of straightforward approvals is, for the time being, over. Financial evidence must be meticulous and verifiable. Academic progression plans must be credible and well-documented. Those who have family members already in Australia on temporary visas should seek legal advice about their pathways to permanency, as processing environments have grown less forgiving.

More broadly, Sri Lanka’s government should be actively calibrating its education and labour migration strategies to reflect a world in which Australia is one option among several rather than the default choice it was for a previous generation. Canada, Germany, and the United Kingdom are actively competing for the same skilled Sri Lankan professionals and students. Australia’s political turbulence creates market space that other countries are moving quickly to fill.

On the bilateral relationship more broadly, Colombo should resist the temptation to assume that the Australia it has known — an enthusiastic champion of regional integration, people-to-people exchange, and multicultural engagement — is necessarily the Australia of the next decade.

Diplomatic relationships with Australia must be sustained and deepened precisely because they are under pressure, not because they can be taken for granted. The Sri Lankan community in Australia, large and professionally accomplished, is itself a form of diplomatic resource — a bridge that should be cultivated by both governments, not left to navigate hostile political weather alone.

There is also a cautionary tale here for Sri Lanka’s own development. Australia’s housing crisis is in significant part the result of treating property as a primary investment vehicle, of failing to build social and affordable housing over decades, of allowing planning systems to prioritize the comfort of existing owners over the needs of future residents. These are not uniquely Australian temptations. Any rapidly urbanising economy that allows housing markets to serve investment rather than habitation risks arriving, eventually, at the same destination.

Conclusion: The Cost of Simplicity

Australia is a country trying to solve a complex, multi-generational problem with a simple, emotionally satisfying but empirically inadequate answer. Housing unaffordability is real and acute, and its effects on working Australians — particularly the young — are genuinely devastating. But its causes lie in decades of tax policy favoring investment over construction, planning systems that protect the interests of existing owners, a construction sector ill-equipped to scale, and a post-COVID rebound in migration occurring into an already depleted housing stock. Although, the 2026 federal budget brought in sweeping changes to the capital gains tax and negative gearing, making it more favorable for future generations to enter the housing market.

The political response to blame immigration, to channel that blame through parties like One Nation, and to respond with visa restrictions and migration caps is arguably the path of least resistance. It does not build a single additional house. It does not reform a single zoning regulation. It does not change the tax treatment of property investment. But it is visible; it is politically legible, and in a system of compulsory voting, it can command a majority.

The consequences of this path extend far beyond Australia. For Sri Lankans in Australia, it means greater uncertainty, more scrutiny, and harder pathways to permanency. For Sri Lankans hoping to study in Australia, it means higher rejection rates and more expensive, more bureaucratically demanding applications. For Sri Lanka as a country, it means a partner in the region that is gradually retreating from the human dimension of its Asian engagement, even as it insists on maintaining and expanding its resource export relationships.

Australia will remain an important country. Its resources, its institutions, and its geographic position in the Indo-Pacific ensure that. But the Australia that emerges from this political moment may be a smaller version of itself: more suspicious, less generous, more transactional, and ultimately less equipped for the kind of partnership that the Asia-Pacific’s uncertain future will require.

The house prices are real. Anger is real. What is being lost, quietly and without fanfare, is something harder to measure and far harder to rebuild.

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DISCOVERING ANGLO SAXON LITERATURE

By Sanumi Vinanga

Anglo-Saxon literature is basically Old English literature, originating in the 5th century AD with the arrival of Germanic tribes, which are Anglo, Saxon and Judas, in Britain - specifically, right after the Roman withdrawal from Britain in 410 AD, with the fall of the West Roman Empire. The Anglo-Saxon era existed from 410 AD to 1066 AD. Before the Anglo-Saxon invasion of Britain, the Celtic tribes already inhabited the island of Britain, and were known as ancient Britons, which later shifted to British.

Anglo-Saxon literature consists of great poems and riddles, which were not written down till later in the 6th century; therefore, most of them were carried across generations through oral transmission. With Christianization in the 6th century, the written manuscripts were introduced, and Anglo-Saxon literature, which was transmitted orally, began to be written down. Many such manuscripts were written in Latin, which gained visibility in Western Culture. The great pieces of Anglo-Saxon literature are the famous Beowulf Manuscript, The Battle of Maldon, The Wanderer, The Seafarer, The Wife’s Lament, Waldhere, Deor and more. Most of the work can be categorised into Heroic epic, Religious Poetry, Elegiac Poetry, which are those poems that express sorrow, and those with a historical context. Importantly, most of these poems remain anonymous.

During the Anglo-Saxon period, there were constant attacks by Vikings who destroyed most of the Anglo-Saxon literature, which was later restored by King Alfred of England. Therefore, when reminiscing about the Anglo-Saxon period, one cannot ignore the role of King Alfred, who contributed to preserving Anglo-Saxon literature and encouraged the learning of English. One such prominent book is ‘Anglo-Saxon Chronicles’, created during the reign of King Alfred the Great in the 9th century. It was distributed across the monasteries in England, and consists of four volumes of Old English poetry from this era.

An extract taken from the translation of the epic Beowulf, a heroic warrior who killed the ‘Grendel the monster’ and rescued Hrothgar, the king of the Danes and his kingdom, reads:

“Hrothgar answered, helm of the Scyldings:

“I remember this man as the merest of striplings.

His father long dead now was Ecgtheow titled,

Him Hrethel the Geatman granted at home his

One only daughter; his battle-brave son

Is come but now, sought a trustworthy friend.

Seafaring sailors asserted it then,

Who valuable gift-gems of the Geatmen carried

As peace-offering thither,

that he thirty men’s grapple

Has in his hand, the hero-in-battle."

This short extract explains how Hrothgar, the king of the Danes, introduces Beowulf, the warrior, and amused by his entrance, says he has the strength of 30 men. The manner in the storytelling unfolds is really captivating. This is one of the longest works of Anglo-Saxon literature. It says that the original Anglo-Saxon work is much closer to German than English, and some also argue that this falls into a category of prose. This is an early poem of the emergence of ‘England’ which was printed by an Icelandic-Danish scholar, Thorkelin, in 1815. And if you're into good old riddles, ‘The Exeter’ it is, that you should read! It is known as one of the jewels in the crown of Anglo-Saxon Literature (10 Works of Anglo-Saxon Literature Everyone Should Read, 2025).

One of the fascinating aspects is that ‘Women in the Anglo-Saxon period held a surprising degree of independence, including the right to own and bequeath property’, and I hope that would be something you look for. There were military leaders, queens, witches, and murderesses who consumed the utmost power and influence during that period.

A young woman must always be stern, hard-of-heart, unmoved, full of belief, enduring breast-cares, suppressing her own feelings. She must always appear cheerful, even in a tumult of grief.

(An extract from ‘The wife’s lament’ found in the book ‘The Exeter’. Perhaps the oldest feminist poems, as there are many interpretations)

This is just glance at the greatness of Anglo-Saxon literature. The more you read about it, the more you find how amusing the poetry is. If you hop onto the internet, there are tons of articles and sites that you can learn about the Anglo-Saxon Period. Anglo-Saxon literature is an area one should definitely look into, as it takes you on an adventurous journey to the early roots of English literature. Hope this article is an inspiration for that.

(The interest for this article was evoked at a lecture at Westminster House, Colombo, where Malcolm Godden, FBA, formerly Rawlinson and Bosworth Professor of Anglo-Saxon at the University of Oxford, spoke on ‘The Anglo-Saxons: Their Writings, Their Stories and Their Status in Modern Times’. Appreciation is due to the British High Commission in Colombo, the British Council and the Awarelogue Asian Institute)

STRENGTHENING SRI LANKA-ITALY RELATIONS THROUGH CULTURAL DIPLOMACY

By Arosh C. De Silva

Sri Lanka and the Italian Republic have maintained close diplomatic, economic, and cultural ties since the establishment of formal relations in the early 1950s. Sri Lanka’s global engagement with Italy has seen much potential as a key partner on the path towards strong cooperation on the world stage. Yet within the relations, cultural diplomatic cooperation is yet to be fully mobilised as a tool of diplomacy. This articles endeavours to highlight the opportunities that exist. It highlights the importance of cultural diplomacy solidarity in Italy-Sri Lanka relations and offers insights into how cultural diplomacy can be further strengthened in bilateral relations.

A need for cultural solidarity

Dating back several centuries, Italy and Sri Lanka have maintained close political and trade links and have long enjoyed good relations, which have been characterised by close economic, political, social and cultural ties. Italy’s expanding diplomatic, cultural, and economic engagement with Sri Lanka has been highlighted through diplomatic visits and the signing of agreements that point to a strategic deepening of ties.

Among the most recent, the governments of Sri Lanka and Italy formally renewed the Bilateral Agreement for the Mutual Recognition of Driving Licences, reaffirming cooperation between the two countries in December 2025. The Driving License Agreement further strengthens the bilateral relations and that facility has been highly welcomed by the large Sri Lankan diaspora living and working in Italy, as it has improved job prospects and future employment opportunities, allowing them to contribute more effectively as a productive expatriate community.

The visit of Italy’s Deputy Minister for Foreign Affairs and International Cooperation, Maria Tripodi, to Sri Lanka in September 2025, marked a significant strengthening in Sri Lanka’s evolving foreign relations with Italy. The visit included high-level discussions with Prime Minister Harini Amarasuriya and Foreign Minister Vijitha Herath, and was aimed at bilateral cooperation across cultural, education, and economic (Ministry of Foreign Affairs, Foreign Employment and Tourism, Sri Lanka). A key highlight of the visit was the signing of ‘Memorandum of Understanding on the Establishment of a Political Consultations Mechanism’, marking a step towards strengthening bilateral ties and diplomatic engagement, at the beginning of what officials describe as a ‘new institutional chapter’ in bilateral relations (Lanka News Web, 2025).

With this background of bilateral relations, which addressed more collaborative mechanisms, the calls for strengthening cultural diplomacy remains a potential avenue for a further deepening of the longstanding ties. In today’s interdependent world system, there has been a growing recognition of the potential of Soft Power. This concept of Soft Power which was introduced by Joseph Nye, to describe the ability of one country to shape the attitudes of another (Nye, 2004), is widely used by countries in their relationships with foreign nations. Herein cultural diplomacy is often viewed as a strategic instrument for projecting a nation's identity and values on the global stage, thereby influencing how other countries perceive its foreign policy objectives.

For Milton C. Cummings, cultural diplomacy, was “the exchange of ideas, information, art, and other aspects of culture among nations and their peoples in order to foster mutual understanding” (UNESCO, 2022). At its core, cultural diplomacy involves the exchange of ideas, art, language, music, cinema, fashion, architecture and other cultural aspects between nations to build bridges and enhance relationships and image abroad. It enables nations to influence global perceptions. In that context, how can Sri Lanka and Italy advance relations by using cultural diplomacy as an effective tool? To address this question, several ideas could be suggested to enhance bilateral relations.

Building bridges through language and education exchanges

For Italy, the cultural soft power promoted through cultural diplomacy has always been an important foreign policy instrument (Medici, 2019). Culture is an essential part of Italy’s identity, making its image abroad, as the Italian language represents a key principle of Italy’s foreign policy (Italian Ministry of Foreign Affairs and International Cooperation). Such an area can be collaboratively strengthened further with Sri Lanka, to establish more meaningful and deeper bilateral relations.

Sri Lanka, with its rich cultural heritage, beaches, wildlife and authentic experiences, was ranked among the top 10 destinations to travel to in 2025 by BBC Travel’s inaugural guide to the world’s top travel spots (Rizkiya, 2025). Sri Lanka has quietly captivated travellers for decades, and according to the Sri Lanka Tourism Development Authority, 43,948 tourists from Italy arrived in Sri Lanka up to November 2025, out of a total of 2,103,593 international tourists in 2025.

Italy is also home to a significant Sri Lankan expatriate community of which 102,906 Sri Lankans legally reside in Italy. They represent the 11th largest community of non-European citizenship (Report on the Sri Lankan Community in Italy, 2022). This highlights the need for strong partnership and collaboration in the spheres of linguistic and cultural exchange which have potential to deepen the dynamic and mutually rewarding relationship between two countries.

The ability to communicate in the Italian language is not only essential to the Sri Lankan diaspora in Italy, but it is important to communicate with Italians effectively, and to interact with Italians visiting Sri Lanka. Italy has the 8th largest economy in the world, and is ranked third among the European economic powers. For Sri Lanka, collaborating more with Italy is essential to achieve its tourism-oriented economy as well as for foreign revenue.

In the education sector, it is found that a significant number of migrants arrive in Italy with the purpose of higher studies. There are a number of scholarship programmes offered by the Italian government (Embassy of Italy in Colombo), and as a European Union member state, Italy funds the Erasmus scholarship programme, which underscores Italy’s cultural exchanges at the educational level. This strengthens a range of collaborations in intellectual exchange, in education. Such initiatives for the younger generation, while fostering international student exchanges at all levels between Italy and Sri Lanka, can be implemented as consistent long-term partnerships, sharing the two countries' deep understanding. The exchange of persons is an important basis for enhancing mutual understanding among different cultures and strengthening relationships with foreign countries.

Herein, education can become an asset and contribute to a country’s attractiveness. Providing financial assistance and scholarships in order to expand influence of culture and language improves the strong bond between bilateral relations and improve its image internationally. Therefore, expanding language educational networks supports Italy’s diplomacy and helps Sri Lanka too.

Application of cultural partnerships

In the cultural sphere, the Italian Embassy in Sri Lanka promotes Italian culture through various collaborations, enhancing mutual understanding between Italy and Sri Lanka. Introducing Italian culture, cinema, and performances, as well as Italian cuisine, fashion, and architecture, to Sri Lanka, and introducing Sri Lanka's rich culture to Italy, is a clear mode of cultural exchange that can be collaboratively developed to foster a deep understanding of lifestyles and build deep trust. It could enhance tourism, support cultural policy initiatives and indirectly influence trade and education as well. The key is designing programmes that align with broader state objectives. Cultural diplomacy is not just about showcasing beauty. When applied thoughtfully, even the local batik tradition, Sanni and Kolam masks and traditional dancing can become instruments of national strategy.

Italian cinema, with its artistic emotional depth, has captivated audiences worldwide. Through their masterpieces, Italy has showcased its culture, history and society values. Thus, Italy’s cinematic productions not only entertain they also become tools of cultural diplomacy, creating bridges between Italy and the world. This has enhanced international relationships and understanding through the universal language of film.

Italy has a long history of rich culture and is one of the countries that has placed great importance on fostering its culture abroad. In the Brand Finance Global Soft Power Index 2025, which evaluates all 193 member states of the United Nations (Jagodzinski, 2025) based on international influence through culture, business, and diplomacy, Italy maintains its strong position at 9th position out of 193 countries, indicating a consistent and powerful global influence.

With several medals including products and brands the world loves – ‘Culture & Heritage’, ‘Food the World Loves’, ‘Great Place to Visit’, and ‘Friendly’, Italy leads its rich culture in reshaping perceptions of its global standing. (Brand Finance Global Soft Power Index, 2025) which highlights Italy’s way of forward as a global influence in the context of soft power.

Italian cooking has been awarded special cultural heritage status by the United Nations' cultural agency, UNESCO (BBC, 2025). Italian cuisine is more than just food. It is a global cultural phenomenon, from pasta to pizza, it beautifully connects people, creating a shared sense of enjoyment. If the two countries start food exhibitions, leveraging Italian food culture in Sri Lanka, that would create more economic opportunities by embracing the Italian world heritage food culture among those who are enthusiastic on leveraging collaboration in cuisine.

When a country showcases its cultural heritage through exhibitions, performances, awareness programmes or educational programmes abroad, it can create a favourable image that can touch people’s emotions and values, shaping their perceptions of the country’s broader diplomatic intentions. The key to strengthening bilateral relations is addressing the lack of an Italian cultural institute in Sri Lanka and establishing a cultural centre that promotes collaborative projects and events, which could significantly benefit both countries and lead to more economic opportunities and a better understanding of diplomatic objectives.

Strengthening the digital platform and dialogues

In this globalised 21st century, the presence of digital platforms and media are essential for the promotion of culture, leveraging diplomatic networks among the international community. It is important to mention that with digital platforms there is capacity to reach a wider audience and achieve consistent and long-term outcomes. For example, the Sri Lankan diaspora in Italy, contributes to Italian society while maintaining good cultural links with their homeland, Sri Lanka. Through social media, many Sri Lankans share creative ideas and Italian culture with Sri Lankan society, promoting Italian content in an effective framework. Moreover, the promotion of dialogue between Italy and Sri Lanka, and promoting research on Italy and Sri Lanka’s politics, foreign policy, economy, culture, and society, deepens understanding about the two countries. Such measures are also important in developing collaborative initiatives, which open more opportunities for both countries. It contributes to the development of a positive attitude towards the country and to a broader application of the soft power in the present stage. Creating friendly networks that help bridge diverse and open new pathways toward cooperation.

Conclusion

Soft power can be very useful for a country, as it can achieve its goals simply because others admire and are influenced by it. This is the reason why, in the context of soft power, cultural diplomacy is very important. As a developing country, Sri Lanka has more measures that are required and much greater effort to achieve the economic progress of Italy, but these two countries are culturally diverse and have been diplomatically cordial towards each other since the establishment of diplomatic ties. Thus, soft power needs to be leveraged for the advancement of both countries’ ties.

Cultural diplomacy represents a tool in strengthening Sri Lanka-Italy bilateral relations. While economic and strategic cooperation remains important, culture provides a human-centred approach that builds trust, goodwill, and long-lasting partnerships between the two countries. By investing more systematically in cultural diplomacy, both countries can strengthen their bilateral relationship, enhance mutual understanding, and contribute positively to people-to-people connections in an increasingly interconnected world.

References

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THE NEED FOR AN EMERGENCY SESSION OF THE UNGA: Why the UN and Member States must act collectively

By George I. H. Cooke

In less than 48 hours, attacks and counter attacks have shaken West Asia, killed hundreds, injured hundreds more, caused panic and chaos, and destroyed infrastructure, with ripple effects even felt in adjoining regions. Unlike the attacks that took place in June 2025, those launched on 28 February 2026 caused the death of the leader of Iran. This has significant repercussions with Iran having to respond, and in doing so they claim to be targeting US interest in the region, but those interests are located in neighbouring countries. This has resulted in an extremely volatile situation that has the tendency to escalate, until and unless those at war take a step back and understand the risks posed. While the debate rages on the legitimacy, magnitude and impact of the attacks, the world is perilously close to mayhem and it is the responsibility of governments around the world to take a stance.

Expressions of concern are important. Presidents and Prime Ministers across the world have expressed concern and called for caution. Such expressions convey sentiments to protagonists to be mindful of opinion, but such expressions individually by leaders in different countries are not sufficient at critical moments in history. Joint stances and collective action are what count, and member states of the United Nations have a responsibility to step forward and call for an emergency session of the General Assembly which is of utmost importance at this stage. Whilst leaders themselves may not be able to travel to New York, it is the duty of Permanent Representatives to meet and explore options out of the current stalemate.

Diplomacy has been the main recourse for decades. The United Nations has averted a third World War owing to effective diplomacy. In this 80th year of its existence the global body can play a pioneering role as it has on numerous occasions in the past. At the height of the Cuban Missile Crisis, it was a South Asian, at the helm in New York - U. Thant - who was able to effectively mediate and ensure a reduction of tension. Thant brought the world back from the brink. If not for his mediatory role, the world would have very likely seen the impact of nuclear weapons as Kennedy, Khrushchev and Castro all remained determined to traverse their individual paths.

Thant, who was at the time the Acting Secretary General, having been sworn in for a year following the tragic death of Dag Hammarskjöld, was able to diplomatic engage with all concerned, and he had the backing of the rest of the world. The most important tool in his armoury however was the strong support that he received from the White House and Kremlin, where both saw him as a neutral personality, with the best interests of the global community. This was his biggest asset, an asset which unfortunately Antonio Guterres does not possess, through no fault of his own.

Iran hails from one of the oldest civilizations on the planet. It is a country of the Non-Aligned Movement, it is a partner in the G77 grouping, it is also member state of the Global South. For too long Member States of all these bodies have taken a back seat, and kept lamenting, especially over the growing power of the United States of America, and its heightened degree of influence in capitals around the world. It is absolutely correct that America is the world’s leading economy, and leader on the world stage, but it is also a country that espouses democracy. In a democratic environment there can be dissent, there can be differences of opinion, and there can be the adoption of different courses of action. It is through diplomacy that such differences are ironed out, and not by mere submission. America is against the dictatorial ideals in certain quarters of the world, and needs to be engaged with diplomatically, with national positions explained.

It is inspiring that the current leadership of America is attempting to make their country great, again. It is also imperative for the leadership of other countries to make their countries great too. While national interest is paramount, what might be concerning is the level of dependency on America, and therefore the hesitancy to step forward at this time, for fear of reprisals. However, it is also essential to remember once again that democracy is the common bedrock of most our countries. We must possess the ability to agree on some issues, and to agree to disagree, on others. It is only through skilled diplomacy that such efforts can be realised.

At this time, the world needs peace. The head of state of a country of the Global South has been assassinated and much violence is ensuing. For this to stop, there has to be a collection of voices from around the world. These have to collectively emanate from the United Nations, which is at the heart of global affairs. For too long the UN has had to step in when the crisis has escalated and is blowing out of proportion. This is yet another situation where the UN needs to step in, but Member States have a crucial responsibility to strengthen the body. Regional groupings have potential but it is only through a global call for an end to the violence, that a reduction in tension will occur.

Member States must be proactive in calling for an Emergency Session of the United Nations General Assembly. Such an Emergency Session will send out a strong message to conflicting parties to stop their actions and return to negotiations and use diplomacy as their means of engagement. From the first Emergency Session of the UNGA that took place in November 1956 at the height of the Suez Crisis, to the eleventh session in 2022 and 2023 over the Russian invasion of Ukraine, there has been a dominance of issues emanating from West Asia that have warranted such sessions. It is through diplomatic engagement that ways can be found to initially halt the violence and fear, and thereafter address further issues.

Lest we forget, the Vietnam War ended chiefly due to opposition from the American public. People made a difference by calling on their government to withdraw and end the hostilities as thousands had been killed and injured. It was the millions turning out in demonstrations that turned the tide from support for the war effort to opposition. There has to be momentum. Momentum must come from Member States who take concerted action to thwart the escalation of violence and the potential of much greater destruction.

This momentum must be encouraged by reaching out beyond the Global South. While it is understood that countries of the developed world have issues with Iran, the need of the hour is an end to the hostilities, and this is where the Global South can partner with much of the developed world. It is in the interest of the entire global community to see an end to the attacks, irrespective of individual positions on Iran.

The Global South alone comprises of between 80% and 85% of the world population. Collectively the Global South can do so much to support each other but has tended to traverse differing paths owing to varied reasons. The current moment is a golden opportunity for the Global South to come together, include much of the developed world, and demand an end to the bombings which are making an oil-rich region highly volatile.

An Emergency Session of the UNGA might not be viewed positively by the main protagonists, but it is certainly the way forward for the rest of the world, that does not want an entire region to go up in flames. It would also constitute collective action of the majority on the planet, which is how democracies function.

TRADING SMART: Strengthening Sri Lanka–New Zealand Economic Relations in a Shifting Global Economy

By Githmi Silva

Trade is a powerful diplomatic tool in a heavily interconnected world. While exports and imports often dominate the conversation about trade, it is important to note that trade is far more complex than that. Trade is not a stand-alone activity; it contributes to a country’s economic resilience, national security, strategic positioning, and several other aspects. Given its ability to shape global power dynamics, even minor policy shifts can trigger far-reaching consequences. The tariff measures imposed by the Trump administration, for example, sparked intense debate about how quickly shifts in major economies can ripple across the world.

In such scenarios, smaller states that depend heavily on support and access to markets in the West become the ones who bear the highest portion of the burden. This reminds the necessity for smaller states to cultivate diverse trade relations rather than relying on singular markets. As a developing nation, Sri Lanka depends significantly on exports to sustain economic growth. While the country has a far-reaching history of exporting goods, it became more prominent towards the latter part of the 1970s with economic liberalization. Although current export flows are diverse, they disproportionately rely on a few key markets like the United States, the United Kingdom, and India. This concentration may cause potential risk due to economic vulnerabilities; therefore, Sri Lanka must tap into alternative markets. In this regard, New Zealand stands out as a promising alternative market offering multiple avenues to strengthen bilateral trade relations.

Overview of Sri Lanka-New Zealand Trade Relations

Since joining the Colombo Plan, both Sri Lanka and New Zealand have demonstrated a shared commitment to promoting economic and social development. With the introduction of economic liberalization under President J. R. Jayewardene in 1977, Sri Lanka adopted an open-market model that facilitated growth in export-oriented ventures. While New Zealand was not among the top markets for Sri Lankan goods, the two nations developed a steady bilateral trade relationship ever since. Over the years, New Zealand began exporting more dairy products, while Sri Lanka continued to export tea, rubber, and garments.

While the trade relations grew at a modest pace, they marked some notable milestones after 2010, following the signing of the Dairy Cooperation Agreement in 2013. The agreement was signed as a result of bilateral talks between President Maithripala Sirisena and the New Zealand Prime Minister, John Key, whose visit to Sri Lanka also served to revitalize trade relations between the two countries (Eurasia Review, 2016). This agreement set the tone to uplift sectoral engagement between the two countries, specifically in the dairy and agricultural sectors. When bilateral trade commenced to indicate an increased diversification into areas like education services, machinery, and processed foods, the two countries came into discussion for a Free Trade Agreement in 2016. This agreement was proposed following the discussions between New Zealand Trade Minister Todd McClay and Sri Lankan Prime Minister Ranil Wickremesinghe; the officials considered a framework to boost economic ties, considering the complementary economies between New Zealand and Sri Lanka (Reuters, 2017). While these discussions paved the way to potential opportunities to strengthen bilateral trade relations, the FTA did not come to force. There is no precise reason why the FTA did not come into reality, but the asymmetry in trade volumes, less need for strategic lobbying, and Sri Lanka’s occasional domestic instability could be considered as possible causes.

Potential to strengthen the bilateral trade relations between Sri Lanka and New Zealand

Certain trade initiatives between the two countries did not materialize; nevertheless, there is still room to enhance them. In fact, the countries have not completely cut off trade relations, and gradual improvements are underway. For instance, Sri Lanka’s exports to New Zealand have increased by 12.85% in 2024 compared to 2023 (Sri Lanka Export Board, n.d). According to the Sri Lanka Export Board (2024), in terms of exporting goods, Sri Lanka mostly exports tea, made-up textiles, gloves, mittens, undergarments, pneumatic and retreaded rubber tyres, coco peat, fiber pith, and moulded products to New Zealand. On the other hand, Sri Lanka’s main imported products from New Zealand in 2024 include meat, fish and dairy produce, wood and wooden products, live animals, fruits, products of base metal, sugar confectionery, and bakery products. Although current exports are mostly conventional, there are several other products and even services that hold potential for trade between Sri Lanka and New Zealand.

It is high time for the two countries to explore ways to diversify the options. Speaking of trade diversification, this can be pursued by finding innovative uses for goods already being traded and exploring untapped opportunities. To elaborate, tea remains one of Sri Lanka’s in-demand exports in New Zealand. It ranks among the top Sri Lankan products exported to New Zealand, with strong demand driving continued trade, making it essential to maintain and strengthen supply efforts. Dilmah Ceylon Tea Company, for instance, has adopted innovative strategies to meet consumer demands by specifically tailoring its offerings to the preferences of the New Zealand market. Going beyond its traditional gourmet Ceylon tea, Dilmah has identified emerging trends and consumer insights to develop a new range of iced teas, low-sugar carbonated tea sodas, and premium tea mixers exclusively available to New Zealand (Estate, 2023). Thanks to the customer-focused approach, Dilmah has been voted New Zealand’s most trusted tea brand for five straight years in the People’s Choice awards, and generates significant revenue via the New Zealand market (Dilmah News, n.d).

While optimizing current exports remains important, unlocking new trade opportunities is also vital. Several unexplored goods and services present a chance to diversify trade between Sri Lanka and New Zealand. In terms of goods, food products (processed or preserved), spices, and synthetic textiles have been identified as promising export options from Sri Lanka to New Zealand (Export Development Board Sri Lanka, 2025). However, exports are no longer confined to goods alone. Due to changes in global trade patterns, service exports, particularly those rooted in knowledge-based production, play a notable role in deepening economic ties.

Countries transitioning from resource-based economies to competitive knowledge-driven models are seeing more resilient and diverse exports; advances in IT, digital systems, and R&D have transformed sectors like logistics, business operations, and education, making knowledge-intensive services a growing force in international trade (Seneviratne, 2025). Sri Lanka holds strong potential to expand its knowledge-based exports, specifically in IT, Software, and BPO sectors. With a skilled talent pool and a rapidly growing IT sector, Sri Lanka can provide services such as cloud solutions to the New Zealand market. This is a win-win situation for both countries, delivering a strong revenue stream for Sri Lanka and cost-effective solutions for New Zealand. In addition, Sri Lanka can further diversify its service export base by developing niche markets such as wellness tourism, maritime logistics, and shipping-related services into broader, sustainable sectors.

The establishment of the New Zealand High Commission in Sri Lanka in 2021 significantly advanced bilateral cooperation across multiple sectors, including trade. Reflecting this growing partnership, Sri Lanka opened a High Commission in New Zealand and the first resident High Commissioner presented credentials at the beginning of 2025. These steps indicate that Sri Lanka and New Zealand have great potential to strengthen and maximize their trade relations. While New Zealand may not currently be Sri Lanka’s top export destination, or vice versa, there remains significant potential and multiple avenues to deepen and diversify bilateral economic engagement.

Importance of strengthening the bilateral trade relations between Sri Lanka and New Zealand

Trade is a volatile factor, and primarily engaging with larger economies often carries complexities. Given that global trade faces increasing threats from geopolitical instability, bilateral economic partnerships should not be limited to the West or traditional major markets. Expanding trade ties to regional and nontraditional markets significantly provide diversified options, helping to reduce exposure to external trade shocks. At present, Sri Lanka’s export strategy is concentrated on a handful of markets that are particularly susceptible to global disruptions. Recent data shows that 23% of Sri Lanka’s exports, valued at $2.79 billion, go to the United States, standing as Sri Lanka’s largest export market; the United Kingdom and India take the second and third spots (Trend Economy, 2023). While the United States remains Sri Lanka's top export destination, Sri Lanka's shipment data for 2024 has recognized India and China as the biggest import partners; The Central Bank noted growth in exports, especially food, coconut-based, and manufactured items alongside a moderate rise in imports, helping reduce the trade deficit (Central Bank of Sri Lanka, 2024).

To avoid the bottlenecks and economic strains, Sri Lanka must adopt broader trade strategies that do not heavily depend on one market. Global economic fluctuations inevitably impact smaller nations like Sri Lanka, and this underpins the need to seek opportunities in emerging markets. Sri Lanka’s economic growth notably depends on the export sector. Strengthening the export sector is key for Sri Lanka’s economic recovery and future resilience. Efforts must focus on diversifying products, improving quality, supporting small and medium enterprises, exploring new markets, and forming trade partnerships that contribute to reducing tariffs, improving market access, and enhancing trade relations (Ceylon Public Affairs, 2024).

Under Annex 1 of the Country Reciprocal Tariffs (2025), the US has imposed a 44% tariff on Sri Lankan exports, which is a far higher tariff rate in comparison to other competing countries, and this largely diminishes the value of Sri Lankan exports in the US market. With the US as Sri Lanka’s primary export market, this shift, driven by the ‘America First’ policy, presents a major long-term risk to the nation's economy. Cost competitiveness was a challenge for Sri Lanka even before the Trump tariffs, and the added uncertainty is likely to reduce buyer confidence and investment activity; moreover, as tariff policies continue to shift in response to both US and foreign actions, global trade tensions are likely to arise (Abeysinghe & Arangala, 2025).

Under these circumstances, Sri Lanka must move beyond traditional markets and pursue diversified trade avenues. New Zealand, as noted in this article, presents a strong opportunity. Although it may sound challenging initially, expanding solid trade partnerships with new markets helps reduce reliance on limited markets and drive initiatives such as product diversification, quality improvement, and the formation of strategic trade partnerships. Despite limited strategic leverage, Sri Lanka and New Zealand remain vital players in the Indo-Pacific region. Given their complementary economies, there is significant potential to pursue a bilateral trade agreement. While improving primary exports, there’s room to tap into specific sectors such as agriculture, which can mutually benefit both countries, particularly as New Zealand seeks high-standard, reliable agricultural imports (Economy Next, 2025). These diverse and strong trade relations often spill into other areas like education, tourism, and cultural exchange, which support a deeper economic partnership in the long run.

Expanding trade ties between Sri Lanka and New Zealand present a valuable opportunity to enhance regional stability in the Indo-Pacific. As a region often shaped by strategic tensions due to the presence of major powers like China and India, strengthening relations among smaller and middle powers offers a more balanced dynamic. Cooperation between countries like Sri Lanka and New Zealand helps to minimize overdependence, reducing the risk of dominance by any single power. Theoretically speaking, to avoid external trade shocks or any geopolitical tensions for that matter, smaller states opt to use hedging as a Foreign Policy strategy. Simply put, hedging refers to an insurance-seeking behavior that reflects a rational calculation, maintaining diversified partnerships as a safeguard against future geopolitical shifts (Kuik, 2021). In comparison to major powers within and beyond the region, neither Sri Lanka nor New Zealand can pick one side or can afford to be drawn too deeply into great power rivalries. Applying this to the trade aspect, it helps both countries to reach out to diverse trade options while maintaining their independent foreign policy under minimum risks.

Way Forward

While entering new markets poses challenges, it remains crucial in a shifting global environment. Relying on singular markets in terms of trade comes with great risks. Sri Lanka has been experiencing it, and taking action has become more important than ever. Taking proactive steps to diversify trade has become a must to avoid future threats and sustain national economies. Despite hurdles, building strong trade relations between Sri Lanka and New Zealand continue to be optimistic. Such a partnership supports a rules-based economic cooperation and contributes to sustainable, inclusive economic development.

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