Ecuador's Correa out-of-step in Colombia dispute

By Alonso Soto

QUITO, July 7 (Reuters) - Ecuadorean President Rafael Correa's unwillingness to restore ties with Colombia leaves him on the sidelines in a region that cheers his neighbor's bloodless rescue of high-profile hostages.

Correa's intransigence also reflects his inexperience and stubbornness, adding to political uncertainty in the volatile nation because the leftist leader may be putting a personal feud above Ecuador's interests, pollsters and political analysts say.

The 44-year-old ex-college professor, a popular but confrontational leader who swept to office last year vowing to wipe out political elites, severed ties with Bogota in March after its troops bombed a Colombian rebel camp inside Ecuador.

While the region quickly overcame the crisis, Correa refuses to forgive right-wing, U.S. ally President Alvaro Uribe despite overtures from Brasilia to Washington.

Ever since that incident he has waged a war of words with Uribe, calling him a "liar." Neither last week's military rescue of French-Colombian Ingrid Betancourt and 14 other hostages that was hailed around the world nor Betancourt's own appeal to Correa could persuade the Ecuadorean to seize the moment and mend ties.

"I'm glad for Colombia, glad for Ingrid Betancourt," he said in his first comments, which came more than a day after the rescue. "But when it comes to us please leave us alone."

Even Correa's close ally Venezuela President Hugo Chavez, who has charged Uribe of running a narco government and ordered tanks to the border in March, called to congratulate Uribe and will host him this week in a symbolic make-up.

Correa "feels that if he embraces Uribe that undercuts his whole position of standing up against Colombia, but that has a significant cost in terms of Ecuador's place in the region and marginalizes Correa," said Michael Shifter, of the Washington-based think tank Inter-American Dialogue.

Ecuadoreans view the diplomatic tension as a largely irrelevant personal battle and want to see Correa focus on combating inflation and a sluggish economy, pollsters say.

Although still above 50 percent, his popularity rating has dropped 13 points since the March crisis -- despite a tough response that gave him a temporary boost -- according to a Cedatos Gallup poll released last month.

ODD COUPLE

Correa has echoed calls from other Latin American leaders who demand guerrillas free the remaining hostages, but his determination to keep a distance from Uribe stymies any efforts to restore ties in the short-term and could hurt his dealings with the region in bilateral or bloc trade negotiations.

Uribe's conservative economics and close ties with Washington, which has spent billions to finance his war against Marxist rebels and to fight drug traffickers, make him the odd-one out in a South America that has shifted left in recent years.

But other leftist leaders who have long lashed out against Uribe, one of the most popular leaders in Latin America applauded him for Colombia's bloodless rescue.

Correa, a socialist who boosted his image abroad by winning from most of Latin America a condemnation of the Colombian raid on Ecuadorean soil, maintains Uribe has lied to him and undermined efforts to improve ties.

"This shows a man of a very strong character, but very stubborn," said Paulina Recalde, a pollster with Perfiles de Opinion in Quito. "He is not gaining political points in this new fight with Uribe."

Investors, who have suffered unpredictable negotiations over restructuring oil and mining deals, say they are wary of Correa's style, especially because his popularity means he could remain president for years to come in a country where his predecessors lasted little time in office.

Correa faces a tough vote to approve a new constitution drafted by his allies that aims to boost his powers but he is likely to run for early re-election next year.

Correa, who wants companies to hand over a bigger share of their revenues to the state, has several times backtracked in negotiations and surprised investors with sudden tax hikes or suspensions of operations.

"You walk on egg shells with him," said a private industry source, who has participated in meetings with Correa. "You never know what he will come up with ... You pray to God he hasn't waken up in the wrong side of the bed that day."

(Reporting by Alonso Soto; editing by Saul Hudson and Jackie Frank)