Ecuador's Correa cruises to re-election victory

By Frank Jack Daniel and Alonso Soto

QUITO (Reuters) - Ecuador's President Rafael Correa cruised to a re-election victory on Sunday as voters ignored a sputtering economy to make the charismatic socialist the OPEC nation's most powerful leader in a generation.

Correa won 51 percent of the vote and had a 20 point lead over his nearest rival, a quick count authorized by electoral authorities showed. He is the first president to avoid a run-off election since Ecuador returned to democracy in 1979.

Supporters packed Correa's party headquarters in Quito waving green flags and shouting "Just one round, Ecuador."

"This revolution is on the march, and nobody and nothing can stop us," the 46-year-old president said in his home town of Guayaquil. "The people ... have given us the most splendorous victory of probably the last 50 years."

He vowed to protect the poor from the global financial crisis in his second, four-year term and said Ecuador's economy, which depends heavily on oil exports and is the world's largest banana exporter, was healthier than most.

Correa's main opponent, Lucio Gutierrez, said he could not accept defeat until official results were published and charged that fraud had been detected at some polling stations. The result is very unlikely to change, however, as the quick count is usually accurate.

Correa has vowed to keep standing up to foreign investors and big oil companies after bringing relative stability to a country where street protests toppled three presidents in the decade before he took office in 2007.

But the fierce nationalist must now tackle a weakening economy and sliding oil revenues to deliver on his promises of more housing and jobs or he risks a slide in his popularity.

"Correa is being watched by all Ecuadorians and should continue with adequate social spending. If not, his administration will not last long," said veterinarian Karen Cabrera, 32, after voting in Guayaquil.

FORMIDABLE TASK

A close ally of Venezuela's socialist President Hugo Chavez, Correa also claimed he had won a majority in the newly formed National Assembly. Exit polls suggested his party had the largest number of seats but not an absolute majority.

The former missionary, who keeps a photo of the Pope by his desk along with photos of his friends Chavez and Brazilian President Luiz Inacio Lula da Silva, is trusted by Ecuador's poor for squeezing hundreds of millions of dollars from foreign companies and spending it on pensions, schools and health.

He has made some risky moves such as defaulting on billions of dollars of debt, although he has also reined in his own left-wing party's radicals, who oppose his plans to develop gold mines in partnership with the private sector.

Correa is closing down a U.S. airbase used for anti-drug flights and in February expelled two American diplomats. But he says he respects President Barack Obama and promised on Sunday to seek "cordial" relations with Washington.

Correa followed the lead of other Andean leaders such as Chavez and Colombia's conservative President Alvaro Uribe by last year changing Ecuador's constitution to extend his rule.

The changes will allow him to stand for re-election again in 2013. Still, he says it will take 80 years for his "citizens' revolution" to truly change Ecuador.

Like Chavez, Correa calls his political project "21st Century socialism", but unlike the strident Venezuelan he said he had no plans to nationalize entire industries.

"It's called 21st Century socialism because nobody in their right mind would nationalize the means of production," Correa said in an television interview on Sunday.

Opponents say the sometimes hot-headed leader is autocratic and is damaging the economy. They also claim changes to Ecuador's highest court give him too much power.

The Belgian and U.S.-educated economist faces a formidable task keeping supporters happy as lower oil revenues bite. Foreign reserves have halved in the last six months, unemployment is up and growth has slowed.

If the economy fails to improve he may have to make tricky decisions about spending cuts. The government last week asked holders of Ecuador's $3.2 billion in defaulted bonds to accept a proposal to buy back the debt at a heavy discount.

Ecuador uses the dollar as its currency and can not print money to cover economic problems. Correa says the economy will grow 2.5 percent this year but most analysts say it will shrink.

(Additional reporting by Maria Eugenia Tello and Alexandra Valencia; Editing by Kieran Murray)