Ecuador's Noboa might call referendum on economic reforms

By Phil Stewart

BRASILIA, Brazil (Reuters) -- Ecuador's embattled President Gustavo Noboa said on Thursday he may call a referendum to secure painful economic reforms opposed by Congress as the nation struggles with its worst economic crisis in a generation.

Noboa blasted opponents of his free-market reforms for trying to "destabilize the country." But he said would not resort to the tools of dictatorship, like the dissolution of Congress, to implement his controversial reform package.

"To dissolve Congress, this is a dictatorship," Noboa said in an interview in Brazil, where he is attending a summit of South American presidents.

"But nobody can prevent that I, within the constitution, do what needs to be done. ... I am seriously thinking of a referendum."

Noboa has faced fierce opposition from Congress since he, as vice president, took power in January after a military coup ousted former President Jamil Mahuad.

Native Indian groups, who have opposed the market-friendly reforms of Mahuad and now Noboa, have threatened to launch in September their biggest protests in history. They say Noboa's planned privatization programme would raise prices and cripple them financially.

Indigenous groups attempted to launch a plebiscite earlier this year to demand a vote to dissolve the 123-member Congress, but the government said the movement was unconstitutional.

Noboa did not offer details on a referendum, saying he would "reserve the right" to not reveal his political strategy. He further slammed the indigenous groups and unions for trying to topple the government of the impoverished Andean nation of 12 million people.

"Unfortunately, there are interests that want to prevent the modernization of the economy. ... They are trying to destabilize the country," Noboa said.

"I do not oppose reactions, there are opinions against (the reforms), but what we cannot accept is that they want to throw away the stability that we are winning."

Battered by years of economic mismanagement, a weak banking system, destructive storms and a period of low prices for its key export -- oil -- the Andean country is fighting to find its economic feet. More than 60 percent of its population lives in poverty, earning $4 a month.

Noboa, Ecuador's fifth president in three years, adopted the U.S. dollar as Ecuador's main currency in April in a last-ditch move to stop soaring inflation.

He also reached a deal with nearly all of Ecuador's creditors to reschedule some $6.5 billion of defaulted Eurobonds and Brady bonds.

Noboa further expressed confidence that Ecuador soon would reach a similar agreement with members of the Paris Club of creditor states, who hold some $1.3 billion of the country's debt.

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