After a tight weekend election, the battle for Ecuador's presidency was headed for a November run-off between a conservative tycoon who favours close links to the United States and a leftist ally of Venezuelan President Hugo Chavez.
Magnate Alvaro Noboa, one of Ecuador's wealthiest men with holdings in bananas, coffee and banking, led former finance minister Rafael Correa after Sunday's vote, but neither had won an outright victory, according to preliminary results.
The market-friendly Noboa won about 27 percent of votes and the leftist Correa 22 percent, according to preliminary results from more than 70 percent of ballot boxes. Both were far short of the percentage needed to avoid a second round.
The stand-off between the left-winger and market-friendly billionaire reflected the ideological battle in Latin America, where Chavez is seeking allies for his socialist campaign to counter Washington's influence.
Correa's calls for debt restructuring, disbanding Congress and the ouster of US troops based in Ecuador have stoked concerns on Wall Street and in Washington that Ecuador could face more economic and political instability.
Reacting to Noboa's surprise victory, Ecuador's dollar-denominated sovereign bonds surged on Monday to a one-month high after weeks of sell off due to investor concerns a Correa victory would force them into a debt restructuring.
Ecuadoreans have turned away their traditional politicians after years of turmoil and corruption in the Congress. Three presidents have been forced out in popular unrest in the last decade, the latest in April 2005.
But Noboa, on his third presidential run, lured voters with promises of jobs and housing. He successfully played up fears Correa would guide Ecuador to socialism, roll back economic freedoms and drop the US dollar as the currency.
"Two positions have been clearly defined: Correa's position of communism, dictatorship, of Cuba ... and my proposal which is that of Spain, Chile, the US and Italy, where there is liberty," Noboa said after the preliminary results.
Under Ecuadorean law, candidates need more than 50 percent of the votes or 40 percent of votes with a 10-percentage point advantage over the nearest rival to win the presidency in the first round. The run-off will be held on November 26.
An outsider who studied economics in the United States, Correa, 43, soared in the polls as Ecuadoreans were captivated by his promises to sweep away the political old guard with a "citizens' revolution."
Correa said he had been the victim of voting irregularities and a campaign of dirty tricks. But he urged his supporters to secure a solid second-round victory. "Rafael Correa ... won yesterday," he told local television on Monday. "We are the victims of a political mafia, who have trapped us ... they are trying to rob our victory."
The second round would be a tough contest between candidates offering populist platforms on different ends of the political spectrum: a left-leaning reformer challenging the establishment and a conservative, free-marketeer.
The results of Sunday's parallel congressional election have still not been released. But the legislature will likely be fractured among Noboa's Prian party, the traditional Democratic Left, the Social Christians and a group of small independent parties.
If he wins the presidency without a strong popular mandate, Correa could clash with the congress and struggle to push his reformist agenda while Noboa could be in a better position to negotiate with other parties. "If Correa tries to implement radical reforms without a previous negotiation his head will roll," said Pablo Andrade, political science professor at Andina University in Quito.
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