* Charismatic economist cruises to easy election win
* Correa seen extending state role in economy in new term
* Ecuador needs investments to diversify oil-based economy
By Eduardo Garcia and Brian Ellsworth
QUITO, Feb 18 Ecuadorean President Rafael Correa reveled in a sweeping re-election victory that allows him to deepen his socialist revolution even as he seeks to woo foreign investment in the resource-wealthy Andean nation.
The pugnacious 49-year-old economist trounced his nearest rival by more than 30 percentage points on Sunday to win a new four-year term. He has already been in power for six years, winning broad support with ambitious social spending programs.
Correa's resounding victory on Sunday could set him up to become Latin America's most outspoken critic of Washington as Venezuelan President Hugo Chavez is locked in a battle with cancer and may be unable to stay in power.
"We will be present wherever we can be useful, wherever we can best serve our fellow citizens and our Latin American brothers," Correa told supporters who celebrated in front of the presidential palace in Quito, waving the ruling Alianza Pais party's neon-green flags.
"This is not just a victory for Ecuador, this is a victory for the great homeland of Latin America," the beaming Correa said.
Correa is now the loudest voice in Latin America arguing against the free-market reforms promoted by Washington and in favor of state-driven economies and expanding ties with China.
Still, the continued success of Latin American socialism will depend on strong commodities prices that underpin generous social spending, and Correa needs to both improve Ecuador's stagnant oil production and spur a nascent mining industry.
In a sign he wants to deepen socialist reforms, Correa's legislative agenda includes a new law that would regulate television and newspaper content, part of his ongoing confrontation with opposition media.
He also plans a land reform campaign to redistribute idle land to the poor.
"Our Ecuador needs a president like Rafael Correa. He has been strong and has not allowed anyone to intimidate him," said Julieta Moira, an unemployed 46-year-old as she celebrated outside the presidential palace. "I'm very excited, happy and thankful."
Correa is also expected to seek changes to a mining law that would help close a deal with Canada's Kinross to develop a large gold reserve.
That will be a major test of his ability to offer investment security while ensuring the state keeps a large portion of revenue.
Chavez, in a statement sent by Venezuela's government, celebrated Correa's re-election as a triumph for the ALBA bloc of leftist nations in Latin America and the Caribbean. The group has been left rudderless since Chavez was sidelined with cancer.
"It is a victory for ALBA, for the Bolivarian and socialist forces of our America, and will help to consolidate an era of change," the statement said, referring to Venezuelan-born South American independence hero Simon Bolivar.
Correa dedicated his victory to Chavez, who is still in a Cuban hospital after undergoing his fourth surgery for cancer on Dec. 11.
Correa's closest rival, Guillermo Lasso, became the face of Ecuador's opposition on Sunday after winning about 23 percent of votes.
The opposition fielded six other candidates including former Correa ally Alberto Acosta, former President Lucio Gutierrez and banana magnate and five-time presidential hopeful Alvaro Noboa.
Critics call Correa a dangerous authoritarian who has curbed media freedom and controlled state institutions. Even some supporters disapprove of his tempestuous outbursts, fights with media and bullying of adversaries.
Ecuadoreans also chose a new Congress on Sunday, and Correa said he expected the ruling Alianza Pais to win a majority.
That would let him avoid negotiating with rivals to pass proposed legislation, including the new media law and land reform measures.
Correa needs to lure investors to diversify the economy and finance the investment in social welfare and infrastructure that helped him win another four-year term.
Ecuador has been locked out of capital markets after a 2008 debt default on $3.2 billion in bonds, and Correa's government has taken an aggressive stance with oil companies to squeeze more revenue from their operations.
Foreign investment will be key to boosting oil production that has been stagnant for five years and to expanding a mining industry that has barely begun to tap the country's gold and copper reserves.
"We can't be beggars sitting on a sack of gold," is a catch phrase Correa has used in recent months to argue that Ecuador needs to better exploit its natural resources despite opposition from rural communities to some projects.
In that vein, U.S.-educated Correa appears to be cautiously willing to cut deals and soften his image as an anti-capitalist crusader.
"The advantages of our country for foreign investment are political stability, a strong macroeconomic performance ... and important stimulus to new private investment," he said last week while hosting Sheikh Hamad bin Khalifa al-Thani, the emir of gas-rich Qatar.
But in comments after his win on Sunday, he stressed that investment was not an end but a means to ensure growth. He promised Ecuador would not "mortgage" itself for foreign cash.
Foreign direct investment has generally been less than $1 billion a year since Correa took office in 2007. By comparison, neighboring Peru and Colombia last year received $7.7 billion and $13 billion, respectively.
"There is still a risk that Correa will seek to change terms for the mining sector once it is more developed, but for now, Correa will show signs of pragmatism as a means of kick-starting the sector," the political risk consultancy Eurasia Group said in an analysis anticipating his victory.
His government is also in talks with China to secure funding for the $12.5 billion Pacifico refinery, which would allow Ecuador to save up to $5 billion a year in fuel imports.