New constitution set to bolster Ecuador's Correa [View All]

New constitution set to bolster Ecuador's Correa
Fri Jun 20, 2008 10:42am EDT
By Enrique Andres Pretel and Alonso Soto

MONTECRISTI, Ecuador (Reuters) - Ecuadorean President Rafael Correa will bolster his authority this year if voters approve a new constitution extending state control over the economy and opening the way for his possible re-election.

If ratified in a referendum, opponents fear the new constitution could stunt much-needed investment in South America's No. 5 oil producer and undermine key institutions already susceptible to political interference.

The constitutional changes hint at leftist Correa's long-term plans for the OPEC member, where controlling the economy -- and therefore cash flow to the military -- is key to survival after his three predecessors were toppled by street protests and congressional turmoil.

Correa, a popular former economy minister who says he wants to wrest power from corrupt elites, already has foreign investors jittery over his drive to renegotiate oil and mining deals. He pledges to annul some foreign debt, which he brands as "illegitimate" deals signed by past governments.

Alberto Acosta, head of the government-controlled assembly rewriting the constitution, told Reuters it will allow the state to take a majority stake in oil and mining deals though it is still unclear how that will happen.

"We have to regain the state's role in those sectors," said Acosta, a close Correa ally. "We would like joint ventures ... with a state majority stake, but there could be exceptions."

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