By Patrick Markey
QUITO, Sept 26 (Reuters) - Ecuador's leftist President Rafael Correa faces a sharp test of his young government on Sunday when voters select a national assembly to draft a new constitution he says will wrest power from discredited elites.
Since taking office in January, Correa has made the assembly the centerpiece of his drive against Ecuador's traditional parties. He blames them for a decade of instability and corruption scandals in the poor Andean country.
Blasting lawmakers as a mafia, Correa has bet on winning an assembly majority to allow him to dissolve the unpopular Congress blocking his key bills. But foes vow to stop a leader they say threatens democracy by seeking to amass power.
Victory on Sunday would allow Correa to shore up his legislative control and tighten the state's grip on the central bank, but a weak showing could hobble him and keep South America's No. 5 oil producer snared in institutional crisis.
"It is all or nothing. We have to vote for a definitive victory, give the old parties a beating or lose everything we have achieved," Correa said recently.
Should he succeed, Correa will join his closest left-wing ally, Venezuelan President Hugo Chavez, in using a popular mandate to bypass lawmakers and rework the constitution.
Bolivian President Evo Morales is struggling with opponents as he takes a similar path.
Correa's Alianza Pais movement hopes for a majority bloc in the 130-member assembly in order to pass constitutional reforms. If it falls short, it will try to build alliances with other parties, but that may force him to moderate his goals.
Two recent polls show Correa remains popular, but they differed on whether he has gained enough momentum for his movement to obtain a simple majority without forging deals.
"With a working majority in place, the government will have a relatively easy means to dissolve Congress, draft a new constitution that guarantees greater state control and push a market negative legislative agenda," said Patrick Esteruelas, a Latin America analyst at Eurasia Group consultants.
OLD AND NEW FOES
A little-known college professor and former economics minister, Correa stepped into the political limelight more than a year ago with an outsider's promise to challenge political elites who have helped oust three presidents since 1997.
The U.S.-educated economist dismisses charges he wants to consolidate power. But his attacks on free-market policies and promises to renegotiate Ecuador's debt have worried Wall Street.
Ecuadoreans must choose from more than 3,000 candidates for the assembly, which will debate a draft of constitutional reforms put together by academics. After months of debate, a final version must be approved in a popular referendum.
But the myriad of candidates, including a masked man calling himself the punisher, a priest and beauty queens, and a complex proportional vote system have some Ecuadoreans lost.
That could allow Correa's candidates to benefit from his popularity, heavy campaigning and social spending in a country where two thirds live in poverty, analysts said.
Still, Correa's drive for the assembly has been marked by clashes with Congress as opposition lawmakers sought to scuttle some of his proposals and preserve their influence.
The opposition remains fragmented, but his rivals include the brother of former President Lucio Gutierrez, who is popular among the poor despite being ousted during protests in 2005, and Alvaro Noboa, the banana mogul who Correa defeated in last year's election.
"We won't leave this country, Mr Correa, just because you want to impose policies on us," roared pro-Noboa candidate Luis Gonzaga campaigning on Tuesday night before a Quito crowd.
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