April 1 (Bloomberg) -- Sri Lanka's President Chandrika Kumaratunga and political rival Prime Minister Ranil Wickremesinghe ended a five-week election campaign each insisting their policies will bring lasting peace and growth.

Kumaratunga told a pre-election rally she's committed to permanent peace with the Liberation Tigers of Tamil Eelam.

``We will openly invite the LTTE for discussion immediately after coming to power,'' the state-run Daily News cited the president as saying.

Sri Lanka's 12.8 million voters go to the polls starting 7 a.m. tomorrow after Kumaratunga called parliamentary elections four years ahead of schedule to resolve a dispute with Wickremesinghe over his handling of peace talks. The snap poll -- and a new split within the Tamil Tiger leadership -- sapped investor confidence the island can continue its best run of economic growth in more than a decade.

``The president's action during the past five months made the country lose billions of rupees in form of investment and aid,'' Wickremesinghe told his final political rally, according to the Island newspaper.

A poll published on March 19 by the Centre for Policy Alternatives said 34 percent of respondents supported the opposition alliance led by Kumaratunga, compared with 29 percent for Wickremesinghe's ruling party. Election results will be available in the early hours of Saturday, Assistant Elections Commissioner K.Senanayake said.

If the polls fail to give either side a clear mandate, analysts say the resulting inaction could jeapordize $4.5 billion in foreign aid and new investment at a time when the economy is expanding and tourist numbers are rebounding.

Economy Grows

Sri Lanka's economy grew 5.6 percent last year and is projected to expand 6 percent this year, according to the central bank, while tourist arrivals topped half a million for the first time. Tourism is the fourth-largest revenue earner, behind tea, garments and remittances from Sri Lankans working overseas.

The dispute has roiled Sri Lanka's markets for months. Stocks began falling last November after Kumaratunga fired three government ministers while the Prime Minister was out of the country. Sri Lanka's benchmark stock index fell to a record 1,016.66 points on Feb. 10, two days after Kumaratunga called the election. This week the benchmark index lost 2.21 percent.

`Personal Rivalry'

Some analysts blame the row on a political rivalry that dates back more than 10 years, to 1994 when Kumaratunga -- daughter of Sirimavo Bandaranaike, who became Sri Lanka's leader and the world's first woman prime minister in 1961 -- toppled then prime minister Wickremesinghe in a general election.

``There are no major gaps in their views on peace and the economy,'' said Jehan Perera, the Director of the National Peace Council in Colombo. ``It's a personal rivalry.''

Sri Lanka's constitution -- ratified in 1978 -- is a mixture of the French British parliamentary systems. To govern, the prime minister needs the support of parliament. The president can dismiss the prime minister and cabinet at any time unless impeachment proceedings are underway.

While Kumaratunga won't be personally contesting this Friday's elections, she could resume control of parliament by winning an electoral vote majority through her alliance with a Marxist-oriented party. She could then appoint a Prime Minister.

Keeping The Peace

Kumaratunga, 58, first entered politics in 1993, when she was appointed chief minister of the western province. Her second term as president ends in 2006, her office said, after she said in January she had the constitutional right to extend her term.

Wickremesinghe, 55 and a lawyer by training, was appointed as deputy minister of foreign affairs in 1977 and became the youngest cabinet minister a year later. He became prime minister in 1993. He was toppled by Kumaratunga the following year.

For Sri Lanka's 19.5 million people, the biggest concern is peace. The island was in a state of civil war through most of the 1980s and 1990s as the Tigers -- who allege the Sinhala speakers who make up three-fourths of the population (and are mostly Buddhists) discriminate against Tamil-speaking Hindus -- waged an armed struggle for a separate homeland.

A split in their own ranks last month -- in which a senior leader broke away to form his own faction -- further complicates the talks.

Since being reelected in 2001, Wickremesinghe has secured a two-year peace in a nation in which the central bank was bombed in 1996 and where the only international airport was attacked in 2001.

The Tigers submitted a power-sharing proposal in the island's Tamil-dominated north and east to Norwegian mediators last October. Kumaratunga -- who failed in 1995 to secure a peace deal and lost an eye in a 1999 attack believed to have been carried out by the group -- rejected the proposal.

Whoever wins, the end to a conflict that has killed 60,000 people according the U.S.-funded Center for Policy Alternatives, would ensure Sri Lanka can build on recent growth.

``People will become accustomed to living in a peaceful environment,'' said Rohan Fernando, managing director, HVA Group, a Colombo-based tea exporter. ``For anything to go forward, we need peace.''

To contact the reporter on this story: Renee Lawrence in Colombo, Sri Lanka, at rlawrence7@bloomberg.net.

Last Updated: April 1, 2004 03:34 EST