The British Ambassador to Colombo John Rankin told a business forum that sanctions on Sri Lanka are not currently an issue and that it was not “necessarily” in Britain’s interest to impose sanctions, reported LBO.

“Sanctions are not currently an issue. First, because the Human Rights Council does not have the power or mandate to impose sanctions. And to the best of my knowledge no government to date has proposed economic sanctions on Sri Lanka,” the ambassador told an ‘LBR-LBO CEO’ forum on meeting the challenges of a resolution on Sri Lanka by UN's Human Rights Council.

"Nor would sanctions necessarily be in the interests of a country like the UK. Policy is not uni-dimensional towards Sri Lanka. UN rights issues and Human Rights Resolutions are not the sole purpose of our policy."

Rankin pointed out that failure to comply with conditions on human rights issues had economic consequences in the past, as with the loss of GSP+ trade concessions.

"That was a matter of choice of Sri Lanka. But it demonstrates that those choices human rights issues can have an impact on economic relationships," he said.

The ambassador added that the countries behind the resolution are expecting progress on the issues raised.

"We are not planning for failure. The plan is for success not for things to get worse," he said.

"I think the key question that has to be identified in this discussion is whether the effect of the resolution is to harden positions or whether the resolution would be to create the space to allow some positive progress in the areas of concern."

He said recent elections in the North and the East was a positive development.

"If the resolution does encourage that constructive action in the future, then (a) it will hopefully make questions of economic sanctions redundant. And (b) hopefully help further improve inward investment," he said.

"We are one of your top five investors. We are your second largest trading partner in the world after India,"

"We have over 100 UK companies successfully operating here employing people locally generating profits, which in turn help employ people in the UK."

"A major part of my job is to promote that trade and investment relationship. So economic sanctions which could affect that economic relationship are not in the interests of the United Kingdom. Or indeed the other major trading partners," he said.

The Chairman of the Ceylon Chamber of Commerce Suresh Shah said that official sanctions, unilateral or otherwise were a possibility possible but Sri Lanka was “hopefully” far away, but that international public opinion was a “bigger worry”, due to the amount of negative press Sri Lanka has been receiving.

"On the other hand countries like Vietnam and Myanmar has been getting much more positive press than Sri Lanka is been getting," he said.

"These can have an impact on FDI flows. In terms of tourism public perceptions can matter. So our potential can certainly be affected."

The head of Verete Research, an economic research firm, said that looking at recent international actions, there had been “indirect sanctions”.

"The main economic impact will be losing potential opportunities. Strong economic sanctions are away. The nature of sanctions are quite varied and multifarious,” Nishan de Mel said.

"There can be sanctions against individuals. There can be limited sanction on certain types of investments, policies that can prevent Sri Lanka from drawn into certain international agreements."

De Mel said that currently foreign investment was not high, at around $1.3bn last year, so even if there was a fall, it could not be by a big amount.

He added that the countries who co-sponsored the resolution were the ones with a positive trade balance.

"52 percent of our exports go to countries that voted for the resolution. And only 9 percent of our exports go to countries that are voted against the resolution. So that is quite telling.”

"Oddly enough the countries that voted against the resolution or abstained turn out to have a larger percentage of imports to the country. By a huge margin they have a negative trade balance," de Mel said.