Oil Report

UPDATE 2-Ecuador leader to revamp courts after vote win

* Count continues but little doubt over winner

* Referendum boosts president’s power, worries foes

* Foreign investors unlikely to face any new measures (Adds latest count, Correa quotes)

QUITO, May 8 (Reuters) - President Rafael Correa vowed a shake-up of Ecuador’s courts after a referendum strengthened his grip on the South American OPEC member nation while heightening foes’ fears of autocratic rule.

Votes being counted into Sunday showed the leftist leader ahead on all 10 reforms he put to Ecuadoreans in a referendum that is an early indicator of Correa’s prospects in a possible 2013 re-election bid in the resource-rich Andean country.

“We’ve won -- thank God and the people!” said Correa, 48.

With 33 percent of ballots counted, the “Yes” votes range for the questions was 44 to 50 percent compared with 40 to 44 percent for “No” -- a narrower margin than most had forecast but possibly reflecting opposition strength in urban areas counted first.

Along with Correa’s declaration of victory soon after polls closed on Saturday, major opposition leaders accepted defeat and government supporters celebrated in Quito.


Full coverage of Ecuador’s referendum [ID:nECUADOR]

Political risks in Ecuador [ID:nRISKEC]


In office since 2007, Correa should now be empowered to name one of three members of a panel charged with reforming the judiciary and appointing judges to the Supreme Court and lower courts. Allies will effectively choose the other two members.

“If we don’t transform the judiciary we won’t be able to transform the country,” Correa said in an interview with TV network Telesur on Sunday. “Of course I’m meddling in the judiciary, but my hands are clean. These are the hands of 14 million people in Ecuador, the hands of democracy.”

Other reforms should allow the government to limit media ownership and hold journalists “responsible” for stories -- moves critics say threaten freedom of expression.

Victory should also help Correa to rein in dissent in the ruling Alianza Pais movement and better control parliament.

“Correa’s victory makes it difficult to talk in any serious way about the separation of powers in Ecuador,” said a U.S. analyst of the region, Michael Shifter.

Having won two presidential elections, Correa is widely expected to try again, although the father-of-three has said he may prefer to retire with his wife to her homeland in Belgium.

“I have talked to our sources in Quito and they said they thought this was going to be the beginning of the 2013 campaign,” said Eurasia Group analyst Risa Grais-Targow.


Analysts do not expect Correa to take any drastic new measures against foreign investors, whom he has already largely strong-armed into deals more favorable to the state.

“I think in the oil sector he’s really already gone as far as he can go,” Grais-Targow said, referring to the recent renegotiation of foreign companies’ contracts in Ecuador.

The energetic and eloquent Correa forms part of an alliance of leftist Latin American presidents that includes Hugo Chavez in Venezuela and Evo Morales in Bolivia.

Chavez congratulated his “brother” for a “great victory.”

Constant critics of U.S. “imperialism,” both men have sought to boost state revenues from oil and mineral resources, which have allowed them to spend heavily on the poor.

Major opposition figures acknowledged Correa’s win but said he should take a conciliatory attitude given that the margin did not appear to be as big as the government had forecast.

“It wasn’t a thrashing,” the president’s brother and critic Fabricio Correa told Reuters. “It’s time for meditation not triumphalism.” [ID:nN07159955]

Correa’s big spending on schools, roads and hospitals have fueled his popularity among the poor and lower-middle classes.

“People have seen some real improvements in their lives. They’ve doubled healthcare spending as a percentage of GDP,” said Mark Weisbrot, co-director of the Center for Economic and Policy Research think tank in Washington.

Rivals accuse Correa of having an autocratic streak and fear he may use the referendum boost to clamp down on foes.

Correa, the strongest leader in decades in a country notorious for its political instability, said his goal is not to accumulate power but to empower the poor majority.

“Our main problem in Latin America is that the elites have always concentrated power,” he told Telesur. “Unless Latin America gets to tilt the balance of power from the elites to the majority, we won’t have development.”

The official final referendum result will likely give the “Yes” vote an even higher margin, since the rules say null and blank votes -- about 10 percent so far -- will not be counted. (Additional reporting by Jose Llangari and Santiago Silva in Quito, Mica Rosenberg in Bogota; Writing by Andrew Cawthorne; Editing by Eric Beech)