Though election results won't be official until Thursday, Ecuador's electoral board has proclaimed U.S.-educated economist Rafael Correa winner of this week's election.
On Tuesday, Correa said he would renegotiate foreign oil contracts to increase state revenue for the social spending he promised during his hard-fought runoff race against conservative banana magnate and Ecuador's wealthiest citizen, Alvaro Noboa, who referred to his opponent as a "communist" who would drive Ecuador's economy into the ground.
"He runs with communists but he isn't man enough to call himself communist," Noboa said ahead of Sunday's election.
Correa campaigned on a platform opposing a free-trade agreement with the United States and has concerned investors with his plan to reduce foreign debt payments to free up more money for social spending.
He also last month referred to President Bush as "tremendously dimwitted" though he later said those remarks were "imprudent." The president-elect also has sought to distance himself somewhat from Venezuelan President Hugo Chavez, a vocal supporter.
But like Chavez, the Ecuadorian president-elect sees oil revenues as a means of righting social injustices.
Correa told reporters Tuesday that on Jan. 16, 2007, the day after he is sworn into office, "we will sit down and try to renegotiate the volume, the participation of the state in these contracts," referring to foreign oil companies operating in the country.
He first raised eyebrows last year when while serving as finance minister he introduced a law that would redirect 30 percent of Ecuador's oil revenue from external debt payment toward health and education programs for the country's poor.
Much of Ecuador's foreign debt, totaling about $16 billion, was incurred during the country's recent oil bonanza, during which time most of the oil revenue went straight into the coffers of foreign countries.
Oil dominates the country's economy and accounts for some 40 percent of export earnings and one-third of all tax revenues, according to the U.S. Energy Information Administration, the Department of Energy's data arm.
The country has proven oil reserves of 4.6 billion barrels in January 2006, the third largest in South America, according to the Oil and Gas Journal. It is the fifth-largest producer of oil in South America, producing 538,000 barrels per day of crude in 2005. More than half its oil is sold to the United States.
With a new leader intent on rectifying years of what he sees as unfair oil-wealth distribution, it remains to be seen if oil firms will be willing to weather the change in attitudes in Ecuador.
"I think that the oil companies have shown that they are quite pragmatic. ... Venezuela had quite a large increase in royalties ant they (foreign) are still there and still investing," Mark Weisbrot, co-director for the Washington-based Center for Economic and Policy Research, told United Press International.
"It's very clear that energy prices have gone up and there is plenty of room [for everyone] to capture some of these windfall profits and you'll see that in Ecuador as well," he said.
"There's other competition, too," Weisbrot said, referring in particular to Russian and Chinese petroleum companies. "A lot of people can get oil out of the ground these days."
In addition to restructuring oil deals, Correa also rattled officials in Washington with remarks that he would not renew the U.S.-Ecuador contract on drug surveillance once it expires in 2009.
"Phasing out U.S. rights at the Manta airbase appears pretty concrete in his mind," said Stephen Johnson, a senior policy analyst for Latin America at the Heritage Foundation.
"Losing the Manta airbase would be detrimental (to the U.S. drug program), but it would be more detrimental for Ecuador because it would confirm for Congress that Ecuador isn't keen on cooperating."
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