Iran and Ecuador vow closer ties

Sat Dec 6, 2008 7:50am EST
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TEHRAN (Reuters) - The presidents of Iran and Ecuador pledged an expansion of diplomatic and other relations on Saturday, the latest sign of closer ties between Tehran and leftist South American governments that have annoyed Washington.

Ecuador is seeking loans from friendly nations like Iran and Venezuela as plunging oil prices are hurting the Andean country's revenues, but President Rafael Correa made no mention of this after talks with Iran's Mahmoud Ahmadinejad in Tehran.

Correa, who arrived in the Iranian capital late on Friday for an official visit expected to end on Tuesday, said the two OPEC members would open embassies in each other's capitals in January, Iran's ISNA news agency reported.

Iran, at loggerheads with the United States over the Islamic Republic's disputed nuclear programme, has sought to boost international support including in South America where it has also courted Bolivia and Venezuela.

"The Ecuadorian government is determined to expand and deepen ties with Iran," Correa, a leftist former economy minister, said.

"We have had good expansion of ties so far and we are hopeful we will be able to deepen that," ISNA quoted him as telling reporters.

Correa has threatened not to repay Ecuador's sovereign bonds worth around $3.8 billion, saying they were acquired illegally by past administrations. A debt default could shut down credit lines to the government and local businesses, analysts say.

Iran is the world's fourth-largest oil producer and is also facing declining export income after prices tumbled by around $100 a barrel from a July peak of $147.

The head of the National Iranian Oil Company was on Saturday quoted as saying it had earned $61 billion so far in the Iranian year that began in March, without giving a comparison. Ecuador is a much smaller crude producer.   Continued...

<p>Iran's President Mahmoud Ahmadinejad (R) hugs his Ecuadorean counterpart Rafael Correa in Tehran Desember 6, 2008. REUTERS/Stringer</p>