• Ready to support SL in IORA to build regional security and peace
• Australia keen to invest in mineral resources, RE, education 
• Needs investor regulator processes and friendly environment
• Diversity and inclusion will help SL grow and prosper like Australia 
• SL best partner to stop people smuggling; economic growth will end push factors
• Sri Lanka needs to assert sovereignty, work within international laws

Australia is ready to support Sri Lanka to play a greater role in regional forums such as the Indian Ocean Rim Association (IORA) and to further regional integration for trade and commerce, Australia’s High Commissioner to Sri Lanka Paul Stephens told The Sunday Morning last week. Australia is keen to invest in Sri Lanka’s Renewable Energy (RE) market, mineral resources, and education system, if the investor climate and the regulator processes improve.  

Last year, while Sri Lanka was undergoing an unprecedented crisis, the island nation celebrated its 75th anniversary of diplomatic relations with Australia. Australia, which many Sri Lankans call home, came to Sri Lanka’s assistance with emergency funds and material contributions. Speaking to The Sunday Morning, Stephens said that Sri Lanka’s situation had improved significantly, but there was more to be done to move from stability towards growth.   

In an interview with The Sunday Morning, Stephens said that Sri Lanka stood to gain by looking to improve regional integration, improving regulatory processes, and building a more attractive climate for investors. 

Following are excerpts from the interview:

Australia and Sri Lanka recently celebrated the 75th anniversary of diplomatic relations. Looking forward, what are your thoughts on what is in store for bilateral relations?

Looking back over the course of the 75 years that Australia and Sri Lanka have been diplomatic partners, I think there has been a huge amount of growth. Seventy-five years ago, Sri Lanka would have been viewed as a distant and exotic land. Today, we would view Sri Lanka as a neighbour, an Indian Ocean neighbour, and of course as a friend. Within the Indian Ocean we are island states – of course different sizes, but islands nevertheless.

I think there are a number of issues that are the bedrock of our relationship. People-to-people links are very strong, tourism is strong, the education links are strong and will remain so. There are also some areas that we can move into; cooperation in climate matters, renewable energy, and investment in mining and resources are really strong areas for us to explore. As well as regional integration as Indian Ocean nations, we can work closely in the IORA and integrate ourselves into regional value chains.  

What is your assessment of the current economic and political situation in Sri Lanka? Do you feel that the island has made progress?

I arrived in Sri Lanka almost a year ago. It was just after the most tumultuous period after the crisis and there were strong indications and after effects of the crisis. It was a tough period for Sri Lanka – there were queues for fuel, energy shortages, power cuts on a daily basis, and the country had announced bankruptcy. Thus, there were serious economic issues. Now, 12 months ahead, obviously there are still a lot of challenges, there is still a lot Sri Lanka has to do. 

However, the situation now is a vast improvement from where it was. The economy has been successfully stabilised. The next challenge is to move from a state of stabilisation to one of growth. I think there are many initiatives the Government is putting in place which will help that growth ambition. There is a lot more to be done. But from 12 months ago, Sri Lanka is certainly a lot better and that I think is a statement of fact.  

In June last year, Australia provided $ 50 million in Official Development Assistance (ODA) to support Sri Lanka to meet urgent food and healthcare needs. One year on, what is your assessment of how those funds were utilised?

We are very satisfied. When Sri Lanka faced the crisis last year, the Australian Government was swift in increasing its humanitarian response. Many other countries did the same. Our response was focused on enhancing food security and healthcare for the most vulnerable. From our perspective, that focus was successful. 

Our funding was primarily directed through UN agencies and UN partners. Our interaction with them in terms of how the money has been used and how the funds have reached those vulnerable cohorts has indicated that it has been successful, so we are satisfied. There is still some ongoing work through UN agencies. 

Sri Lanka is seeking to come out of its economic crisis and diversify its markets. What is the current trade outlook between both countries and what role can Australia play to help Sri Lanka diversify and improve its trade?

The trade relationship is actually quite strong. Two-way trade was worth $ 1.3 billion last year. That is a solid number, considering the global recession, the effects of the pandemic, and other headwinds. I think there are opportunities to grow it further.

In particular, we would see opportunities through investment. There are Australian companies that are interested in investing in the mineral resources sector and the energy sector. We see that as a growth area. 

There are already a number of Australian education institutions and services which are present here and have partnerships with Sri Lankan institutions. While that area has been successful, we think there is scope for growth, even through the potential creation of an ‘education hub’ in Sri Lanka which would attract not just Sri Lankan students, but also those from the region; from India, Nepal, Bangladesh, even from Africa. 

We think this is an area where there can be greater cooperation. To create a hub, it would require some buy-in by the Sri Lankan Government and we have raised this idea with them. In principle, there is a strong interest from them. There would also need to be the right regulatory environment to attract investors to establish foreign campuses.

We are also working with Sri Lanka on issues like trade facilitation, a single window, just to make the entry and exit of goods more streamlined. 

How concerned is Australia about the shrinking space for criticism and divergent views for Sri Lankan media and civil society today?

Australia’s view is that societies that are more open, more inclusive, and are accepting of diverse views are ultimately more resilient and successful. I think that has been Australia’s experience. We are not a perfect society by any means, but our experience has shown us that inclusion and diversity have led to greater success. Within that, we uphold the freedom of speech and the freedom of the media. We expect that they are important for a democratic country. 

Sri Lanka has observer status in ASEAN and is planning an FTA and PTA with Singapore, India, and Bangladesh. How does Australia view such developments?

We think it is a positive step forward. We support Sri Lanka’s efforts to integrate more with the regional trade and investment environments, to find new markets – which is extremely important if Sri Lanka’s economy is to move on to a growth path – and to ensure that the export basket is diversified. We will be happy to help Sri Lanka in those efforts. 

Sri Lanka has a stated goal of achieving a 70% renewable energy target by 2030. Is there an opportunity for Australia and Sri Lanka to collaborate on renewable energy?

Yes, absolutely. That is one area of prospective growth incorporation between our two countries. Australia has ambitions to become a renewable super power. We have many assets in solar energy, batteries, and storage. We’ve also significantly increased our financing for climate-related matters. Our Government has committed to net zero by 2050. 

Sri Lanka has a renewable energy target of 70% by 2023 and we support that, so there is potential to collaborate with Sri Lanka to diversify its energy profile. This is one area which I think is really prospective for cooperation. It is also a win-win in terms of the climate, business, and investments as well.  

Is Australia interested in mineral resource extraction in Sri Lanka? We have already seen an Australian company enter the local energy market. 

Absolutely. One of the most prospective areas for Australian investments is definitely in mining and resources. Sri Lanka has an abundance of several mineral resources, in particular, phosphate, ilmenite, and graphite. There are Australian companies which have an international reputation and strong expertise in these minerals and they are interested in investing if the right opportunities arrive.  

Sri Lanka and Australia have worked closely to combat people smuggling and other maritime crime in the Indian Ocean, with Canberra helping Colombo build capacity and sustain maritime operations. The head of your border force called bilateral cooperation the ‘gold standard’. Do you share his views and what is in store for this partnership? 

I definitely share his views about the ‘gold standard’ in cooperation between Sri Lanka and Australia. In fact, I would say that is the ‘whole of government’ perspective from Australia’s point of view. We have had very strong patterns of cooperation with Sri Lankan agencies involved in countering the people smuggling challenge. That cooperation has a few different elements; operations between agencies to prevent illegal migration attempts, capacity building, and outreach – the messaging. 

It’s about spreading the message that such illegal ventures will not be successful. It is also about ensuring that the people who are behind the smuggling syndicates, who sell these false narratives, are taken to task. 

Our hope is that in the longer term, Sri Lanka’s economy will continue to grow and that the ‘push factors’ that exist now, which push some to pursue illegal migration, reduce to the point they are no longer a factor. 

The growing geopolitical rivalries and contest in the Indian Ocean is of serious concern for Sri Lanka and other small coastal/maritime states. Sri Lanka, at times, seems to be struggling to adjust its foreign policy accordingly. How has Australia evolved its foreign policy over the years to deal with great power competition? 

The sort of geopolitical issues you mentioned, the great powers’ competition, are extremely difficult issues to deal with. Many people, including leaders, foreign ministers, and foreign policy thinkers spend most of their time thinking about these issues and how to address them. 

From Australia’s perspective, the US is our treaty ally, so it is our most important security partner. It is also a very close bilateral partner. China is our biggest trade partner and a very important country for us, as it is for many others. India is a big player in this region and is rapidly becoming a superpower, if not already. Our relationship with India has increased and strengthened in a huge manner over the last few years, especially in trade, defence, and political cooperation. 

I think Australia has different stakes in all of these issues, but for us the most important one is that all countries, large and small, have the assets, the tools, and the agency to protect their sovereignty and assert their rights. That definitely applies to Sri Lanka as it does to other countries. Often there is a ‘push’ and ‘pull’ to how sovereign interests are exercised. For us, the best way to ensure sovereign interest is to enforce the rule of law, to uphold international law, and to uphold international norms and standards; to ensure that all countries are able to assert their sovereign rights within those international laws and norms.      

These are very complex issues and difficult ones to deal with. We [Australia] find ourselves using regional partnerships much more than we did in the past, like the Pacific Islands Forum, the ASEAN, and increasingly, the IORA. We look forward to Sri Lanka’s chairing of IORA this year. We will look to support Sri Lanka as much as possible to build up IORA as a strong contributor to regional security, understanding, and peace. 

Many states like the US, the UK, India, and Japan are concerned about Chinese naval activity in the Indian Ocean. Does Australia share those concerns ? Is Australia also concerned about questions raised by other Quad partners about the Chinese-managed port in Hambantota and allegations of plans by China to base forces in the island?

Firstly, for Australia, just to emphasise, upholding international laws, when it comes to the high seas, upholding the UN Convention on the Law of the Sea (UNCLOS), are the most important. In terms of foreign military basing allegations you mention, it comes back to sovereignty. For us, it is most important that all countries have the capacity and the agency to enforce their sovereignty. 

We would be concerned about a foreign military base being established in another country, whether that is in Sri Lanka or elsewhere. I think we will continue strengthening the multilateral system, building our bilateral and regional partnerships to achieve a balance that would help balance the strategic competition in a more equitable way.   

Recently, Chinese surveillance/intelligence vessels shadowed Australia’s latest multinational military exercise – Talisman Sabre. Australia allowed the vessel to carry on under international law and closely watched it. How do you put faith in international laws, when some are not seen to play by the same rule book? What can smaller states like Sri Lanka do to further strengthen regional understanding on maritime law, through forums like the IORA? 

I think that is an interesting idea. I think the IORA is the right regional forum to discuss questions about maritime security in the Indian Ocean region and that any understanding that can be built up to enhance the primacy of international law, including UNCLOS of course. That would be a good thing. 

We also understand that it is important to have the assets and capacity to protect a nation’s sovereignty. Australia just completed a defence strategic review and as a part of that there is a significant growth in our defence capacity in the coming decades. That is just a pragmatic response to the enhanced geostrategic competition on our part as well. We think deterrence is also part of the equation and we are using all the tools of statecraft, including diplomatic tools, development cooperation, defence, and soft power working together, in order to safeguard our interest. 

There is a great deal of interest in the foreign press about visits by Chinese scientific research vessels to Sri Lanka. How does Australia view their presence in the Indian Ocean and in Sri Lanka? 

For Sri Lanka to best deal with such situations, for foreign vessels to dock in Sri Lankan ports and navigate Sri Lankan waters, Sri Lanka needs to assert its rights under UNCLOS. I know Sri Lanka is drafting a new SOP to help address situations like this and I guess to avoid the pressures Sri Lanka faced last year when Yuan Wang 5 called. We support Sri Lanka’s efforts to have a more consistent, more considered approach to consider these types of requests. 

Like many countries with a colonial history, Australia is going through a process of reckoning with its indigenous communities about righting historical wrongs and improving participation in policy-making. Do you think there are lessons from such a process that can help Sri Lanka with its reconciliation process?

You’re right, Australia is dealing with some difficult legacy issues with how our First Nations people were treated. I think there have been some good strides made in dealing with those issues. There is also a lot of work to be done, which our Government is committed to doing. 

I think it’s difficult to draw comparisons between different countries’ contexts. I think the context between Australia and Sri Lanka are different. I couldn’t say if there are any lessons from Australia which are applicable to Sri Lanka. What I would say is that Australia has been successful in embracing diversity and inclusion. Again, we are not perfect, but what I think is that societies that do embrace those values are better placed to deal with challenging situations, and are better placed to assimilate different views, be they ethnic or religious. 

I think greater embracing of diversity and inclusion would only be beneficial for the Sri Lankan reconciliation process. But I don’t pretend to understand everything that has happened in Sri Lanka’s history and the fact that these issues are still being dealt with shows how complex they are. 

In your opinion, how has the Sri Lankan community in Australia contributed to the nation’s growth?

The Sri Lankan diaspora is a strong part of our community. They are about 170,000 in numbers and they make a vibrant and positive contribution to our multicultural society. They are well assimilated to the Australian way of life. They are very well represented in the professional classes, so they make a really strong contribution economically as well to our country. 

Recently, Cassandra Fernando of Sri Lankan origin was elected to our Parliament. She visited Sri Lanka recently. That is an example of a Sri Lankan voice becoming prominent in Australian political discourse. I think a number of Sri Lankan-origin politicians are represented in State politics. We see more Sri Lanakns coming into our sporting field. In terms of the cultural contribution, it is only going to improve in the years ahead.