Amal Jayasinghe

Sri Lankan children are being encouraged to raid their piggy banks in a bid to end a serious shortage of loose change in a country where inflation is making coins worth more than their face value. State-owned banks are offering colour pencils, felt pens, drawing paper and books to children who part with their savings in exchange for bank notes.

The Tamil Tigers’ latest suicide bomb attack, the deadliest in the island’s history, has illustrated that the rebel army still ranks as a master of the tactic. The elite band of "Black Tigers" is regarded by guerrilla supremo Velupillai Prabhakaran as a "protective armour" and one of the most effective weapons in his battle for an independent homeland for ethnic Tamils.

Sri Lanka’s president vowed on Friday not to allow the killing of 64 bus passengers derail the island’s peace process as the air force bombarded Tamil Tiger positions for a second straight day. President Mahinda Rajapakse insited the Norwegian-brokered process would not be allowed to collapse following Thursday’s Claymore mine attack on the bus.

Sri Lanka’s air force resumed retaliatory strikes against Tamil Tiger positions on Wednesday, police said amid fears that the country was sliding back to full-scale war after a four-year truce. Air attacks were carried out in the north-eastern district of Trincomalee where the military bombed a cluster of boats of the Liberation Tigers of Tamil Eelam on Tuesday night.

At least eight people were killed in two separate mine blasts in northern Sri Lanka on Monday, hours after Tiger rebels announced they are suspending participation in peace talks. The latest deaths raised to 64 the number of people, mostly police or troops, killed in bomb attacks in the past week in the latest surge of violence linked to the decades-old Tamil separatist conflict.

Sri Lanka’s president on Tuesday asked Norway to arrange early talks with Tamil Tiger rebels and help stem the latest wave of violence that has killed at least 151 people. President Mahinda Rajapakse held closed-door talks with Norway’s top peace envoy, Erik Solheim, on salvaging the island’s Oslo-backed peace process, which has remained deadlocked since April 2003.

Suspected Tiger rebels set off two more mines and fought a gun battle with troops on Tuesday as the United Nations urged talks and Norway made a fresh bid to pull Sri Lanka back from the brink of war. Military officials said members of the Liberation Tigers of Tamil Eelam ambushed a navy bus by setting off a landmine in the restive northeast port district of Trincomalee.

Sri Lanka’s presidential election this week has turned into a vote on the country’s distressed economy and the troubled peace process, with the two main contenders diverging sharply on the major issues. About 13,3-million eligible voters will effectively be choosing on Thursday between the current and former prime ministers, who have radically different views on how to save the nation from economic and ethnic implosion.