REALPOLITIK: Trevor Royle

IT'S not just in North America that punters are expressing extreme dissatisfaction with the ramshackle free market economic model which has given them so much grief. Down south, the folks are getting restive too, not least because it was imposed on them a few years ago by the US and its mates in the World Bank and the International Monetary Fund. Getting back to basics is all the rage in South America these days as several countries have already demonstrated by giving the thumbs-up to left-leaning leaders who want to give the state greater control over their economies.

Today, it's the turn of the people of Ecuador to go to the polls, and, unless there's a massive nationwide change of heart, they look certain to rubber-stamp a new constitution giving vast new powers to President Rafael Correa. Under its main provisions, the US-trained former finance minister will be granted a further two terms in office, a move which will permit him to retain power into the next decade, and foreign investors in Ecuador's lucrative oil and mineral infrastructure will be placed under stricter fiscal scrutiny.

Add on the clauses which deal with land reform and the redistribution of wealth through additional spending on education and welfare and it's not difficult to understand Washington's fears that Ecuador has slipped into the same socialist slipstream as Venezuela and Bolivia.

Correa has already given notice of his intentions by showing the financial community that national interests have to come before naked greed. Earlier this year, he seized the assets of the Grupo Isaias, one of the institutions which plunged the country into financial chaos 10 years ago following a disastrous process of deregulation and privatisation. Then, last week, he gave the Brazilian construction firm Odebrecht its marching orders after it defaulted on a major hydro-electric project.

Correa argues that he is simply acting to preserve Ecuadorian wealth and to bring lasting change to a country that has endured years of crisis, leaving its people dirt-poor and dependent on handouts. If that means giving him the reins of power for a period that stretches into the future, then so be it. It has to be better than the chaos of an economic system which allowed the wealth from the country's natural resources to be siphoned off by indifferent outsiders.

A belligerent and forceful speaker, Correa has vowed to end what he calls the "long night of neo-liberalism", but his critics argue that he is simply using his authority to remain in office for as long as it suits him. Moreover, in order to get his wicked way he stands guilty of using public handouts to win the necessary votes. When the president argues that he is striving to create a utopia in Ecuador, traditionalists counter that he is only intent on turning the country into a Cuban-style socialist state with a permanent presidency.

As ever, there's a bit of truth on both sides. Those close to Correa are adamant that he is an idealist and a committed patriot who only wants the best for his country.

They see him in the same mould at President Hugo Chavez of Venezuela, who also abandoned the free market economy and attempted to use his country's oil wealth to improve the lot of thousands of poverty-stricken citizens. It matters not that Chavez has largely failed in his objectives or that his self-styled socialist revolution has been sullied by allegations of corruption.

What matter is perception, and on this level Chavez has not failed his supporters. His rhetoric speaks of common ownership of the country's resources, he is strong on building new structures for welfare and health care and he is not above tweaking George Bush's nose. In pursuit of that latter aim he has skated on thin ice by inviting Russia's prime minister Vladimir Putin to regard Venezuela as a home-from-home for visiting warships and aircraft.

If Correa follows a similar route it will be bad news for Washington. Already resigned to having lost Venezuela and Bolivia to the left, and to a lesser extent Argentina and Uruguay, policy-makers responsible for Latin America will only be left with Colombia, Peru and El Salvador as reliable continental props and allies.

It's all a far cry from the heady early days of Bush's first term when the southern neighbours were going to be made into a mirror image of the north by abandoning state control and introducing the wonders of the free market economy as a first step to creating common financial and political security. Then, the talk was of short-term sacrifice in return for long-term reform, but nothing materialised, leaving people disillusioned and feeling short-changed.

There's a new mood blowing through South America, and in Ecuador it's ushering in heightened expectations. Getting the next two terms is the easy part for Correa, making them work is the real challenge.