Concerns over the human rights situation in Sri Lanka is not a hindrance for attracting foreign investors, according to Ajith Nivard Cabraal, the governor of the Central Bank of Sri Lanka.

“There are a few who have asked the question - but not all. And every time they have asked the question we have explained to them in detail what is taking place and they have been satisfied with our answers,” he said in an interview with BBC World News.

Asked whether the issue of human rights is a block on investment, he replied in the negative.

He stated that the Central Bank has sold £6bn in Sri Lankan bonds to investors around the world, 70% of them from the US, the EU and the UK.

The idea that they have been put off buying because of human rights issues is “entirely untrue,” he said.

Mr Cabraal said bond investors were quite aware that their funds would be spent in real projects, in roads and ports - and they had no objections.

The Central Bank has achieved much in recent years with inflation coming down to below 5%, low interest rates, high foreign exchange reserves and GDP growth averaging between 7% and 8% over the last three years.

However, foreign direct investment (FDI) lags. Last year the government had hoped for some $2bn (£1.2bn) in FDI but achieved only $1.3bn.

Mr Cabraal, who is on a mission to market the country to international investors, recently visited London, accompanied by a delegation of officials and business representatives.

Hardy Jamaldeen, the director of Steradian Capital, which advises foreign investors on property investment in Sri Lanka, however, says that human rights question, for him, is very real: “It’s one of the hazards we are fighting on a regular basis.

“I’ve been here over the past week meeting with a group of core investors and a few of them say, ‘I’m very sorry Hardy but we will not be coming in because of these issues.’”

He says the war “did not end particularly well” and that reconciliation needs to happen. But he believes foreign investment can be a power for good - many of his investment opportunities are in the north, in the Tamil heartland.

“I’m saying - go there. Get involved,” he says.

“Do it in a proper manner. We are looking at a lot of corporate social responsibility projects... to help schools and communities in [the north]. This is what they need. If you isolate them... actually the problem doesn’t get better.”

“Once we get these investors out to Sri Lanka 94% or 95% are converting,” says Mr Jamaldeen. “But actually getting them out is the hindrance - because of the overhang of the UN position.”

China’s Ring of Pearls?

Asked about the increasing Chinese investments in Sri Lanka and claims that Colombo has passively become part of China’s ‘Ring of Pearls’, the Central Bank Governor says that investment has not been limited to China and that other countries are welcome.

 “If the Chinese are the guys who are coming with the cash - are we to stop them?” he says, at the same time insisting “the door is open” to anyone to invest.

On the World Bank ranking Sri Lanka 85th in its “Ease of Doing Business” tables, Mr Cabraal brushed it away saying the country was ranked 105th just three years ago. “We have been working away at this very diligently.”