Ecuador's new president promises to renegotiate foreign debt

Presidents of Iran, Mahmoud Ahmadinejad, and of Venezuela, Hugo Chavez, attended to the swearing in ceremony of their ally in Quito.

Rafael Correa, a US-educated leftist economist, was inaugurated on Monday as the eight president of Ecuador in a decade, escorted by anti-Washington leaders as the Venezuelan President, Hugo Chavez and his Iranian counterpart, Mahmoud Ahmadinejad. After being sworn in in a traditional indigenous ceremony on Sunday, Correa officialy inaugurated his four-year termvowing radical changes, including the renegotiation of the country's foreign debt, the rework of oil contracts with multinational companies operating in this Andean nation and the reform of the Constitution.

"We want a profound transformation where the governing classes have failed," he said in a speech, wearing a traditional Andean shirt and brandishing a sword given to him by Chavez. "The fatherland is coming back, jobs are coming back and justice is coming back," he said.

However, Correa's rhetoric was quite moderated according to the new standards proposed by his ally, Hugo Chavez. As for him, Correa insisted in his independence from the Venezuelan leader: "My friend does not rule in my house, I do", he said as required by journalists.

Ecuador has "a perverse system that has destroyed our democracy, our economy and our society," Correa said in his inaugural address. He also said that he will call a national referendum on a special assembly to rewrite the constitution - a move he says is vital to limiting the power of the traditional parties that he blames for the country's problems.

He will face a tough battle to do so, as those traditional parties control the Congress, since Correa did not present candidates to the Parliament. The opposition says that initiatives to change the Constitution have to be passed by the Congress. Correa insists it can be called via referendum. Eventually, the Constituent Assembly could close down the Congress and call to new elections there.

Correa, who comfortably won a November election run-off against a business magnate, vowed to purge the the poor Andean nation of corruption and encourage the return of emigrants. He also said that some of the foreign debt of the country was increased by corruption and needed international arbitration. In practical terms, the President announced his intentions to renegotiate the debt with local and foreign creditors.

Correa said he will "renegotiate'' the country's $11 billion of foreign debt and end central bank independence as part of his plan to transform the country toward "21st century socialism''. He also criticized previous governments for boosting Ecuador's foreign debt and following the advice of multilateral lenders such as the International Monetary Fund. Correa called on the central bank to invest the country's international reserves in Latin America instead of in the United States.

As much as a dozen of Latin American leaders attended to ceremony. Chavez, Peru's Alan Garcia, Colombia's Alvaro Uribe, Brazil's Lula Da Silva, Chile's Michelle Bachellete, among them. Argentina's leader Nestor Kirchner did not arrive in Quito due to the presence of his Iranian counterpart, Mahmoud Ahmadinejad. Recently, Argentina accused Tehran of being behind a terrorist attack that blowed a Jewish center in Buenos Aires in 1994, killing 85 people.

Hernan Etchaleco

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Author`s name Dmitry Sudakov