(For full coverage, click on [nBOLIVIA])
* Morales holds at least a 30-point lead in polls
* Leftist wants to deepen reforms in second term
* Critics say Morales amassing too much power
By Eduardo Garcia and Kevin Gray
LA PAZ, Dec 6 (Reuters) - Bolivian President Evo Morales, whose leftist economic policies have made him broadly popular with the poor but angered business leaders, is expected to win re-election on Sunday, allowing him to expand state control over the economy.
A victory by Morales would solidify his dominance over Bolivian politics and further weaken a divided conservative opposition tied to the country’s business elite.
Opinion polls show Morales, an ally of Venezuelan President Hugo Chavez, taking more than 50 percent of the vote and his Movement Toward Socialism party could win control of Congress.
Morales, Bolivia’s first indigenous president, nationalized important sectors of the economy in his first term, including energy and mining companies, which generated a windfall for state coffers that he has used to boost social spending.
The cash payments to benefit such groups as school children and retirees have added to his popularity among Bolivia’s disenfranchised Indian majority that celebrated his defeat of the country’s long-ruling traditional parties four years ago.
“There are two roads: continue with change or return to the past,” Morales told tens of thousands of supporters at his final campaign rally.
A former llama herder and coca leaf farmer raised in extreme poverty, Morales faces two conservative rivals, Manfred Reyes Villa, a former governor and army captain, and wealthy cement magnate Samuel Doria Medina. [ID:nN02465235]
Morales has cast himself as the only candidate able to bring prosperity to the poor, and many Bolivians living in rural areas identify strongly with his humble origins.
He successfully pushed an overhaul of the constitution in a referendum earlier this year that allowed him to seek a previously prohibited second term, following moves by other Latin American leaders who have sought to extend term limits.
Morales vows to extend the hand of the state deeper into Bolivia’s gas- and mineral-rich economy to redistribute wealth in South America’s poorest country. [ID:nN02228485]
He plans to launch state-run paper, cement and drug companies and develop large lithium, iron and petrochemical projects to generate more revenue for welfare programs.
Critics charge the cash handouts are a way of buying political support and do little to lift Bolivians permanently out of poverty.
The government argues the numbers of poor are falling and the subsidies have spurred economic growth during the global economic slowdown.
Some 60 percent of Bolivians live in poverty even though Bolivia is home to the second-largest deposits of natural gas in South America after Venezuela.
The Bolivian economy is expected to grow 2.8 percent this year, the highest rate in Latin America, according to the International Monetary Fund.
Morales’ opponents maintain that his policy of asserting greater state control over the economy is scaring away much-needed foreign investment.
His repeated promises to increase production of natural gas, the country’s main revenue earner, have not materialized because of a lack of investment in the sector.
Critics also say Morales, an Aymara Indian, has fueled political polarization between the Andean west, where indigenous groups are a majority, and eastern regions where violent anti-government protests broke out last year.
Morales, a self-avowed admirer of Cuban revolution leader Fidel Castro, is a fierce critic of the United States, which he calls the U.S. “empire” in fiery speeches railing against capitalism.
But he has moderated his rhetoric on the campaign trail in a bid to appeal to the middle class and voters in eastern regions, whose support he needs to win control of Congress.
Reyes Villa, Morales’ leading rival, has lashed out at what he calls Morales’ heavy-handed governing style and said the Bolivian leader was out to accumulate more power.
“What’s in play in this election is democracy,” he said. (Editing by Anthony Boadle)