Ecuador's Correa vows socialism in a slow economy

By Eduardo Garcia and Walker Simon

QUITO, Aug 10 (Reuters) - Ecuadorean President Rafael Correa was sworn in for a second term on Monday vowing to deepen his socialist "revolution" but he did not spell out how he plans to jump-start the country's slow economy.

Mapping out his vision for a new term, Correa, 46, said he sought to fight inequality and invest in projects to help the poor, improve education and improve the lives of long-neglected Andean indigenous groups.

"It's a gigantic struggle ... but we have already started and no one is going to stop us," said Correa in a speech before a group of Latin American leaders, including leftist presidents Hugo Chavez of Venezuela and Raul Castro of Cuba.

"During the next four years we're going to continue our campaign ... it's not just about helping the poor, it's about stamping out the structural causes of poverty," he added.

Heavy social spending and his frequent outbursts against Ecuador's business elites have raised Correa's popularity but have rattled investors.

Although close aides describe Correa as impulsive and unpredictable, they also say he is a pragmatic socialist who is unlikely to press foreign investors hard enough to force them out of the Andean country.

"Shrinking the state was one of the most absurd mistakes of the long and sad neoliberal night, while boosting the state, was one of the worst mistakes of state socialism," he said. "We need a state that is efficient."

But dwindling oil revenues and the $900 million the government used to buy sovereign bonds it defaulted on last year, could force Correa to slash social spending.

The OPEC-member nation exported $2.69 billion worth of crude oil and refined oil products in the first half of the year, about 60 percent less than what it exported in the same period last year.

Correa acknowledged that export revenues and money sent home by Ecuadoreans working abroad have plummeted. He did not say how he plans to diversify the economy from its dependence on oil export revenues, as he has promised to do.

Multilateral lenders have offered up to $2.5 billion to Ecuador this year, and the country is set to receive a $1 billion down payment for a deal to export oil to China. But if crude prices fall again, Ecuador's economy could suffer.