New Ecuador cabinet, asylum for ex-leader

QUITO, Ecuador - Brazil granted Ecuador's ousted president Lucio Gutierrez asylum today as his successor named a new Cabinet in an effort to restore political stability after a week of violent protests.

Gutierrez, the third president of the Andean nation toppled amid popular unrest in eight years, was still holed up in Brazil's embassy residence in Quito, where he fled on Wednesday after angry crowds stopped him leaving the country.

A state prosecutor has issued an arrest warrant for the former army colonel over the deaths of two people during the protests by opponents who accused Gutierrez of abusing his power and stacking the Supreme Court with allies.

A Brazilian foreign ministry spokesman said Brazil was negotiating to get Gutierrez out of the country.

President Alfredo Palacio, who was vice president and replaced Gutierrez after Congress fired him, named seven new ministers including defence, economy and foreign affairs posts to try to restore order to the Andean nation.

"I'm you're only hope," Palacio, a 66-year-old cardiologist, told Ecuadoreans late on Wednesday after demonstrations ended with lawmakers firing Gutierrez.

He said he would consider calls by protesters for early elections but would first propose a constitutional reform.

Washington said early elections could be one possibility to help end the crisis. The Organisation of American States postponed till Friday a special meeting to discuss Ecuador and whether the Congress had a right to oust the president.

"We are simply asking everyone to keep calm in the area. There should be no violence. There needs now to be a constitutional process to get to elections, if that is what is in the future," US Secretary of State Condoleezza Rice told Fox News.

Street protests erupted in Quito a week ago to demonstrate a Supreme Court decision to drop corruption charges against former President Abdala Bucaram, a key political ally of Gutierrez. Bucaram was ousted by Congress in 1997.

Opposition congressmen, who branded Gutierrez a dictator for meddling with the court, said he effectively abandoned his post by failing to carry out his duties. Military commanders withdrew support for Gutierrez when he refused to quit.

The capital's international airport was reopened on Thursday but schools remained closed in a sign that many Ecuadoreans were still worried over political tensions.

Ecuador is South America's fifth largest oil producer and the region's No 2 exporter of crude to the United States behind Venezuela, but state oil firm Petroecuador said production and shipments were unaffected by the turmoil.

Congress named Palacio to serve out the rest of Gutierrez's four-year term, which expires in January, 2007. Even as vice president, Palacio was an open critic of Gutierrez for not doing enough to help Ecuador's impoverished majority.

But some analysts said Palacio's position still appeared weak since many of the demonstrators on Wednesday had demanded for early elections.

"Palacio's tenure as president is uncertain because he lacks a political base, has little popular support and has practically no experience in politics," Jose Cerritelli, an emerging markets analyst with Bear Stearns.

Gutierrez helped topple President Jamil Mahuad in 2000. He was elected in late 2002 with support largely from the poor. But many were disappointed by the free-market line his government followed and his popularity slumped.

- REUTERS