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INTERVIEW-Ecuador candidate seeks end to 'franchise socialism'

Source: Thomson Reuters Foundation - Wed, 12 Dec 2012 17:01 GMT
Author: Reuters
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* Correa favorite to win vote, ex-banker Lasso main challenger

* Lasso says socialism stifling free enterprise

* Says foreign investment, free trade pacts key to growth

By Brian Ellsworth

GUAYAQUIL, Ecuador, Dec 12 (Reuters) - Ecuador's leftist government has provided little more than a "fast-food menu" of predictable socialist policies that need to be replaced with lower taxes and help for private companies, top opposition presidential candidate Guillermo Lasso said in an interview.

Two months before the election, polls show the career banker is the strongest challenger to President Rafael Correa, although he still trails way behind.

Lasso is campaigning on promises of lower taxes and incentives to private industry in the Andean nation of 15 million people.

He is nearly 30 percentage points behind the popular and pugnacious Correa, whose heavy public spending and strong-arm style have brought five years of stability to a country where three presidents were deposed in the previous decade.

Lasso, 57, describes the socialist movements that have swept countries such as Venezuela, Ecuador, Bolivia and Nicaragua as an "ideological franchise, just like McDonald's is to food."

"This ideological menu tells us the state is just about the only protagonist in development and that state-run businesses should crowd out the private businesses," the white-haired Lasso said in an interview with Reuters at his palatial home on the outskirts of Guayaquil.

"I believe employment is the best way to escape poverty," he said. "My proposal for government is to support enterprise, to support entrepreneurs by cutting taxes, reducing bureaucracy."

As the youngest of 11 children in a middle-class family, Lasso said he had to wake up early to beat his siblings to the shower in the only bathroom in their home - teaching him the value of competition at an early age.

At 15, he took a part-time job to pay for private school, which his family could no longer afford because his father had retired. Lasso would go on to lead Banco Guayaquil, one of Ecuador's largest banks.

"I began without a cent in my pocket and I've been able to succeed," he said. "That's why I say to the young in Ecuador, you too can do it."

FREE ENTERPRISE

Lasso says he wants to boost foreign investment - which has been spooked by Correa's anti-capitalist rhetoric and a 2008 debt default - and sign free-trade deals with developed countries to expand exports.

He says the OPEC nation should stop following the path of Venezuelan President Hugo Chavez and look to countries such as Brazil, Chile and South Korea that rely on private firms for growth.

Ecuador's economy has expanded steadily since 2010 thanks to heavy state spending and strong crude prices. But Correa has struggled to diversify the economy from its dependence on oil.

Lasso say this will not be possible without support for business and an end to constant regulatory changes that have included 10 tax code reforms in the past six years.

"A local or foreign investor makes an investment in January and by the end of the year the conditions are already being changed," said Lasso, whose stern demeanor and dry sense of humor contrast with the mercurial Correa's euphoric speeches and impulsive outbursts.

He has the advantage of being a fresh face in politics with no ties to traditional parties seen as inefficient and corrupt.

Lasso is one of seven opposition candidates, which also include banana magnate Alvaro Noboa and former president Lucio Gutierrez. Both of them trail in polls but have in past elections done better than opinion surveys had suggested.

The divided opposition may help Correa, 49, avoid a runoff election. To do that, he needs to win more than 50 percent of the vote, or win more than 40 percent and beat his nearest rival by at least 10 percentage points.

The U.S.-trained economist still enjoys a popularity rating of 60 percent, according to a recent survey by polling firm Cedatos. Still, polls suggest that half of voters have not yet made up their minds.

Supporters credit Correa with improving road networks that link isolated villages to major cities and with investing heavily to boost access to health care and education.

Correa rarely mentions Lasso but his allies in Congress recently raised taxes on bank profits to finance an increase in a monthly stipend paid by the government to the poor.

The move was widely seen a partisan swipe at Lasso, who had earlier proposed cutting state spending on advertising to raise the stipend. Even adversaries admitted it was a deft maneuver.

Lasso's critics say Correa's socialist politics give him a leg up among working class voters, many of whom mistrust banks after seeing their savings wiped out in a 1999 financial crisis.

He disputes this. As head of Banco de Guayaquil, he launched a popular project to create branches in grocery stores, allowing thousands of Ecuadoreans in rural areas to open bank accounts - helping cultivate an image of a banker concerned about the poor.

"I've spent close to four years traveling around Ecuador, speaking with all sectors of society," he said. "What I propose is what they want: to help them escape poverty. How? By creating jobs." (Additional reporting by Eduardo Garcia; Editing by Kieran Murray and Bill Trott)

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