PREVIEW-Senegal polls seen as vote on Wade and son

* Local elections seen as referendum on Wade's rule and son

* Anger over poverty, unemployment

* Economy under strain, government debts unpaid

By Daniel Magnowski

DAKAR, March 19 (Reuters) - Senegal's local poll on Sunday will be a test of support for octogenarian President Abdoulaye Wade, accused by critics of increasingly authoritarian rule, and for his son Karim's chances of succeeding him.

The former French colony on West Africa's coast has long been seen as a rare example of a peaceful democracy in a region blighted by coups and violence.

But recent crackdowns on the opposition in the media and on the streets have tarnished Senegal's international image and Wade's critics say officials are enriching themselves while most Senegalese struggle with poverty and unemployment.

"While they are local elections, they represent a test for the immediate political future of Senegal," said Babacar Justin Ndiaye, an independent political analyst in the capital Dakar.

At stake are seats on more than 500 local councils.

It is the first real test for Wade's Democratic Party since his re-election in early 2007. Most opposition parties boycotted legislative elections that year, citing irregularities.

A key cause of tension in the country of around 13 million is an economy under severe strain.

Senegalese companies were owed 174 billion CFA francs ($358 million) by the government at the start of the year and while that has been partially alleviated by a 125 million euro ($169 million) French loan, the unpaid bills have harmed businesses.

"There are a lot of internal arrears, which has a huge impact on the private sector," said Ehouman Kassi, managing director of the local operation of pan-African bank Ecobank.

Construction firms and sub-contractors have been particularly hard hit and jobs are being lost as a result. Some companies are shutting and Kassi said defaults were rising.

POVERTY AND PROTESTS

Wade's style of governance and projects such as a North Korean-built statue depicting a mighty African family looking westwards over the Atlantic -- intended to rival the Statue of Liberty -- are coming under greater scrutiny than ever before.

"Poverty is everywhere," said Bandiang Diabakhate, an opposition candidate in Kedougou, 700 km (440 miles) south-east of Dakar, where mining firm Mineral Deposits poured Senegal's first industrially produced gold this week.

"The mining fund, for example, that companies pay into to maintain the roads, build a health sector ... we don't see the benefits of that fund," Diabakhate said.

The new gold production will be only a small boost for an economy expected to suffer from falling foreign remittances and trade as a result of the global financial crisis. Growth in 2008 slowed to below 4 percent, less than had been expected.

Kedougou has been the focus of political attention since 19 young people were jailed in January after riots sparked by unemployment and anger over nearby mining projects. At least one person was shot dead.

Wade pardoned the detained youths before visiting Kedougou this week, but it was not enough to quell hostility.

"All the riches of Senegal, you find them here at Kedougou, but the young people of Kedougou have no work, so I'm sorry for President Abdoulaye Wade. Really, we want him to leave," said Simbe Boy, a jobless 30-year-old wearing the red ribbon that has become a symbol of opposition to Wade.

Wade's foes accuse the authorities of trying to undermine them ahead of the poll. U.S.-based rights group Freedom House downgraded Senegal recently from "free" to "partly free" because of what it called "a growing authoritarian trend."

The candidacy of Karim Wade for a Dakar council seat, which could see him then appointed mayor of the capital, give the polls added interest. Analysts say Karim is being groomed to stand for the presidency when Wade's final term ends in 2012.

Neither father nor son has commented on the speculation, but the president said the election was not a personal contest.

"What's at stake is the fate of the party," he said in Kedougou.

Critics say foreign-educated Karim is out of touch with the country, and benefits from his father's political patronage.

"Why must his father protect him all the way to the palace? I don't think the Senegalese will accept that," said Saliou Ba, a candidate for a 34-party opposition coalition in Kedougou.

(Additional reporting by Diadie Ba in Dakar and Gabriela Matthews in Kedougou; editing by Alistair Thomson) ($1=486.5 Cfa Franc) ($1=.7412 Euro)