January 20, 2007 / 8:43 AM / 12 years ago

Ecuador's Correa vows to slash World Bank, IMF ties

A man cycles past graffiti in support of presidential candidate Rafael Correa in El Recreo near Guayaquil November 23, 2006. REUTERS/Jose Miguel Gomez

QUITO, Ecuador (Reuters) - Ecuadorean presidential candidate Rafael Correa said on Thursday that if elected, he plans to buy back and restructure the country’s debt with multilateral organizations such as the World Bank and International Monetary Fund to minimize “harmful” ties.

Correa, a U.S.-trained economist who has spooked investors with pledges to limit foreign debt payments, is just narrowly behind conservative Alvaro Noboa only a few days before Sunday’s run-off election, according to recent polls.

“With the extra oil revenues, we have the capacity to buy back our debt with the IMF. But I insist, I would even be willing to issue more expensive debt to pay off the IMF because it has done us so much harm,” Correa told foreign reporters.

He said he plans to minimize financial ties with the IMF and World Bank and would seek “an extension of maturities so we can pay them until the last cent.”

Noboa, the country’s richest man, has hinted he would swap more expensive debt for cheaper bonds at better terms. He has not given many more details on his debt policy.

Correa has rattled Wall Street with promises to restructure Ecuador’s foreign debt and boost social spending to benefit the country’s poor majority.

The former economy minister also repeated his campaign promise that he plans to renegotiate oil contracts to hike the volume of crude the state receives from private oil companies.

Ecuador, South America’s fifth-largest oil producer, has received a new flush of oil cash resulting from a new law that forces companies to share their oil revenues and from the seizure of the oilfields of a U.S. oil company.

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