MIAMI, Oct. 3 (UPI) -- Ecuador's oil-based economy is going to be further regulated and its foreign investors subject to greater scrutiny, according to the country's leftist leader, President Rafael Correa, who won a sweeping victory in this week's constitutional referendum vote on a new constitution.
Correa, an open critic of multinational petroleum corporations he says operated with impunity for decades in Ecuador, said the referendum would enable him to spend additional oil revenue on social welfare programs.
He also said foreign oil interests should be prepared to turn over a larger portion of revenues, saying his administration would "demand fair compensation" for years of oil extraction in which Ecuador was not fairly compensated, according to Correa.
Critics of the president said the success of the referendum gives Correa too much executive influence over Ecuador's economy and will lead to rampant government spending.
However, his supporters praised his insistence on greater accountability in the oil sector, where the OPEC member nation hopes to increase output for sale on the international market in the near future to capitalize on inflated prices.
"Though Correa's socialist rhetoric has roused negative sentiment among Ecuadorian elites, his policies up to now have been enormously popular among the country's poor," read a recent analysis by the Washington-based Council on Hemispheric Affairs.
Oil has been something of a mixed blessing for the South American country, which hopes to join the ranks of Venezuela and Brazil, the continent's top two oil producers.
Much of Ecuador's foreign debt, totaling more than $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 had 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 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, and they 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."