Oil Report

UPDATE 3-Ecuador's Correa to seek re-election, clear favorite

* Leftist leader is 32 points ahead of rival, poll says

* Opposition fragmented, lacks a charismatic leader

QUITO, Nov 10 (Reuters) - Ecuador’s President Rafael Correa launched his re-election bid on Saturday for a February vote likely to give him a new four-year term to continue boosting state control over the Andean nation’s economy.

Government spending on roads, hospitals and schools has made the 49-year-old U.S.-educated economist very popular with the poor majority, and he is well ahead of rivals in opinion polls.

The opposition is divided and lacks a charismatic leader.

Victory in the Feb. 17 vote would give the socialist Correa a mandate for rolling out more reforms to increase state revenues from the oil and mining sectors. But dependency on oil exports in OPEC’s smallest member is his Achilles heel, and he may be forced to reduce state spending should oil prices fall.

“We’ve done a lot but there’s a lot more to be done, to turn this bourgeois state into a truly popular state that would serve everyone, especially the poor ... that’s why we accept this nomination,” Correa said in front of thousands of supporters after the ruling Alianza Pais coalition endorsed his candidacy at a raucous meeting in a Quito football stadium.

“We’ve got a president, we’ve got Rafael,” chanted his supporters, many of whom were wearing neon-green shirts, the color of the party.

In power since 2007 and a member of a Latin American leftist bloc led by Venezuela’s Hugo Chavez, Correa has given the state a key role in a small economy very dependent on oil and bananas.

Casting his movement as a “Citizens’ Revolution,” Correa has viciously battled political adversaries whom he disparages as an elite that monopolized power for decades.

Critics say Correa has grabbed too much power and clamped down on media freedom. They accuse him of scaring off foreign investors with a 2008 debt default, and failing to diversify the economy from its dependence on oil exports.

Correa chose strategic sectors minister Jorge Glas as his running mate, because vice president Lenin Moreno, who is in a wheelchair, declined to run again for health reasons.

Correa infuriated Washington this year by granting asylum to Wikileaks founder Julian Assange, who published hundreds of thousands of U.S. diplomatic cables.

Assange, who is wanted for questioning over sexual assault and rape allegations in Sweden, has been in Ecuador’s embassy in London since June.

High oil prices have fueled economic growth since 2010, and Correa has brought stability to the politically volatile nation. Three presidents were forced to resign due to widespread protests during the decade before he took office.


A survey by pollster Cedatos shows Correa winning 55 percent of votes, 32 percentage points more than his closest rival, Guillermo Lasso, a banker from the coastal city Guayaquil.

Lasso, who is running on a platform of lower taxes and incentives to private investors to boost job creation, will have difficulty in denting Correa’s support among the poor.

“Lasso is seriously stigmatized because he’s a banker, that’s the main thing he’ll have to struggle with,” said Paulina Recalde, head of local pollster Perfiles de Opinion.

Ecuadoreans blame banks for a 1999 financial crisis that forced Ecuador to adopt the dollar as its currency the following year and meant thousands of account holders lost their savings.

But Lasso has plenty of funds to finance a flashy campaign, and his marketing team has put him in the media spotlight.

“Lasso has credibility, inspires sympathy and has a low rejection rate,” Recalde said.

Other candidates are former president Lucio Gutierrez; Alberto Acosta, a former Correa ally; and Alvaro Noboa, a banana magnate who will run for the presidency for the fifth time.

Some of them had discussed choosing a single candidate in the style of Venezuela’s opposition, which staged a united though unsuccessful challenge to Chavez by rallying behind Henrique Capriles. But the plan never took off because none of them wanted to step out of the race.

Correa’s strongarm governing style is popular among people in rural areas in the Andean highlands and sprawling shanty towns in the outskirts of Guayaquil and Quito.

He has more than doubled state spending as a percentage of gross domestic product and uses media broadcasts to attack rivals and berate officials for dragging behind schedule on public works, be it an airport or sewage system in a small town.

“I want all the public works to continue, and he needs another term in office to do that ... My grandparents say that in their lifetime, he’s the only president that has worked exclusively for the poor,” said Elma Lincango, a 36-year-old nurse outside a hospital in northern Quito.