[NYTr] After vote, Ecuador's Correa pushes leftist reforms

[All the News That Doesn't Fit]

Reuters - Oct 3, 2007
http://news.yahoo.com/s/nm/20071001/wl_nm/ecuador_correa_dc

After vote, Ecuador's Correa pushes leftist reforms

By Patrick Markey 

QUITO (Reuters) - Ecuadorean President Rafael Correa said on Monday he
would seek to dissolve Congress and bolster the state's role in the
economy after claiming a majority in a weekend vote for an assembly to
rewrite the constitution.

A leftist who often attacks free-market policies, Correa joins allies
Venezuelan President Hugo Chavez and Bolivia's Evo Morales in setting
up an assembly to push through reforms.

His Alianza Pais party won a clear majority in the election on Sunday,
a victory that will allow Correa to sidestep opponents in Congress who
have tried to block his plans for a "21st Century socialism."

"It is difficult to act with this Congress ... this Congress must be
tossed back onto the street," Correa told reporters.

He called for his delegates to press for early presidential and
congressional elections after the assembly finishes its work as well as
end the central bank's autonomy and abolish special oil saving funds
that restrict government spending.

But he struck a more moderate tone in dismissing opposition concerns
that he wants to expand his presidential powers. He also said his
renegotiation of oil contracts would be "friendly" with no deep reforms
in the energy and mining sectors.

"We are not a fundamentalist government. We are pragmatic, we recognize
there has to be free competition in some sectors to improve their
efficiency," he said.

Correa, who came into office in January, wants to weaken Ecuador's
traditional parties, which are widely blamed for the instability that
ousted three presidents in a decade.

A government-linked exit poll from Sunday's election and a quick count
-- in which a sample of the votes are tallied -- showed Alianza Pais
won far more than the 66 seats needed to control the 130-member
assembly.

Early official results also showed Correa's party with a lead, although
a full tally of seats could take weeks. Correa said his party may have
secured 80 seats in the assembly.

WALL STREET JITTERS

Wall Street investors had expected a Correa victory and there was only
a moderate move in debt prices on Monday. Ecuador's benchmark 2030
global bond fell 0.250 point to bid 90.000 with a yield of 11.359
percent.

Foreign investors are worried by Correa's promises to renegotiate a $10
billion foreign debt, rework oil contracts in South America's No. 5
crude producer and review mining deals.

"With Alianza Pais in the driver's seat, the new legislature is likely
to validate greater government intervention in critical sectors of the
economy," Goldman Sachs senior economist Alberto Ramos said in a note
to clients.

Pro-government candidates say they are still discussing the reforms
they want. But Correa's key delegate and choice for assembly president
is Alberto Acosta, a former energy minister who favors more state
control over energy resources.

A U.S.-trained economist, Correa is highly popular for his rallying cry
against career politicians as a corrupt mafia, but critics fear he will
amass power and follow Chavez by steering his poor Andean country away
from free-market policies.

Correa says his majority bloc in the new assembly will push to dissolve
the Congress and replace it with a legislative committee that will
reflect his majority in the assembly.

The assembly will debate a draft of constitutional reforms put together
by academics, and will work for at least six months. Its final
constitutional reform proposals must be approved in a referendum.

(Additional reporting by Alonso Soto in Ecuador and Walker Simon in New
York)