Oct. 1 (Bloomberg) -- Ecuadorean President Rafael Correa won backing for his plans to rewrite the country's constitution and expand state control of the Andean nation's economy

Delegates linked to Correa won at least 79 of the 130 seats in yesterday's election to form a national assembly, according to an exit poll by Santiago Perez Investigaciones y Estudios, a pollster close to the administration. Results tallied by non- governmental organization Participacion Ciudadana were similar, giving Correa about 60 percent of the seats.

The assembly, which will revamp the country's constitution for the third time since 1978, fulfills Correa's campaign pledge last year to craft a new basic law that bolsters political stability and purges traditional ``elites'' from power. Correa has said the new constitution will end central bank independence and lift the bar on re-election of a sitting president.

``The people of Ecuador have won the mother of all battles,'' Correa told reporters at the presidential palace in Quito last night.

An economist with a U.S. doctoral degree who calls himself a ``friend'' of Venezuelan President Hugo Chavez, Correa, 44, has been mostly vague about his goals for the assembly. The convention will signal ``the long night of neo-liberal policies is over,'' Correa told rallies around the country in past months.

`Overwhelming'

The president, who last week said at a news conference in New York that he would resign if he failed to win a majority of the seats, said the result was `overwhelming.''

``The people have given the traditional parties a red card,'' Rolando Panchana, a candidate close to Correa who was likely elected to the national assembly, said in a television interview from Guayaquil with Canal 1.

In the second quarter, investment in infrastructure, housing, vehicles and other fixed assets fell 2.3 percent from the previous quarter. That was the biggest decline since the same quarter in 2003 and the second-largest since 1999, when a fall in oil prices combined with natural disasters to trigger a 6.3 percent plunge in GDP, the central bank reported Sept 28.

``Certainly, the assembly will generate fundamental changes in the economic structure,'' the central bank said in a document posted on its Web site.

Congress

Better-known polling agencies didn't provide early estimates of the result, citing the complexity of the process.

The central bank earlier this month cut its 2007 growth forecast to 3.4 percent from 4.3 percent, as ``the outlook for the oil sector isn't optimistic.'' Crude oil output is likely to decline 5.7 percent this year to about 184.6 million barrels from 194.2 million barrels last year, the bank said.

By contrast, the United Nation's Economic Commission on Latin America and the Caribbean estimates the region's average growth will be 5 percent after a 5.6 percent increase last year.

Domestic demand growth slowed to 0.6 percent on quarter in the second quarter, from 3.1 percent in the first quarter, the bank also reported. In the same period, government demand rose by 1.6 percent after contracting 0.2 percent in the first quarter. Gross domestic product in 2006 was $21.6 billion.

Though Correa enjoys a majority in the 100-member Congress -- a rare occurrence in Ecuador for a president -- the assembly is likely to disband Congress and call for new elections. Correa said rewriting the constitution to permit indefinite reelection wasn't going to be a priority.

``Congress should take an unpaid vacation,'' Alberto Acosta, the candidate leading the list for Correa's Alianza Pais party, said at a news conference Sept. 28. ``The simultaneous existence of two legislative powers will generate tensions.''

Oil

Acosta, a German-educated economist, is one of Correa's top policy advisers and was his first energy minister, overseeing the country's oil industry, which accounts for about half of government revenue.

Correa last night said the new constitution will focus on fiscal, social and environmental issues and that the government would ``accept the triumph with humility and responsibility.''

A draft constitution written by academics at the president's request specifies that the state's ``benefits from sustainable profit'' from oil or minerals ``will never be inferior to those of the company'' exploiting those resources. The present constitution doesn't include any minimum return for the state for natural resources.

Ecuador produced 46.4 million barrels of crude oil in the second quarter from 45.2 million in January through March.

About 9 million citizens cast ballots for more than 3,200 candidates. The country's Supreme Electoral Court has said official results may take as long as a month to be released.

To contact the reporter on this story: Stephan Kueffner in Quito at skueffner@bloomberg.net