Bolivia's Morales claims re-election, Congress control

LA PAZ (Reuters) - Bolivian President Evo Morales claimed a landslide re-election victory on Sunday as voters backed his left-wing policies of Indian power, social spending and state control of industry.

Official results were not expected until Monday but quick counts showed Morales took at least 63 percent of the vote, more than 35 percentage points ahead of his closest challenger, rightist former governor Manfred Reyes Villa.

Morales, an Aymara Indian, is Bolivia's first indigenous president and is hugely popular among the Indian majority that also supported a constitutional reform earlier this year to allow him to run for a second consecutive term in South America's poorest country.

"Brothers and sisters, we now have an enormous responsibility ... Your vote won't be in vain," Morales said on Sunday night from the balcony of the presidential palace, addressing thousands of supporters who waved rainbow-coloured indigenous flags and shouted "Evo Again! Evo Again!"

Exit polls projected Morales would also win control of the lower house of Congress and a two-thirds majority in the Senate, where the opposition had tried to block some of his reforms in his first term.

Critics say Morales, 50, has scared away crucial foreign investment with nationalizations of key sectors of the economy and is ruling only for Indian ethnic groups instead of all Bolivians.

With his Movement Towards Socialism party dominant in Congress, Morales's reforms will have few brakes during his five-year second term, though analysts say he cannot attract investment without moderating his rhetoric.

Many voters were won over by government cash payments to school children, mothers and pensioners, which reached a quarter of Bolivia's 10 million people this year.

"I'm a teacher and I see that the kids go to school with hope, because they get breakfast there and the subsidies ... I ask them how they spend the hand-outs and some of them say they buy shoes. Some didn't have shoes before," said Irene Paz, 36, after voting in El Alto, a poor suburb of La Paz.

Morales is an ally of Venezuela's socialist President Hugo Chavez and ramped up social spending in his first term, tapping increased government revenue after he nationalized the energy industry in 2006 and raised taxes on natural gas production. Bolivia is South America's top exporter of the fuel.

But opponents say he has failed to increase output, stamp out corruption in the state-run energy company and develop the natural gas industry, signs of future challenges.

Morales' leading opponent, Reyes Villa, said on Sunday night he was waiting for official results to be released before making any statements, but the third-place contender, cement magnate Samuel Doria Medina, conceded defeat as exit polls showed him taking 6 percent of the vote.

Morales pledges to launch state-run paper, cement, dairy and drug companies and develop iron and lithium industries to help Bolivia export value-added products instead of raw materials.

(Additional reporting by Carlos Quiroga, Silene Ramirez and Diego Ore; Editing by Kieran Murray)

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