By Malena Castaldi
MONTEVIDEO (Reuters) - Uruguayans voted on Sunday in a presidential election that has the leftist ruling coalition battling to hold onto power for a third term and fend off a young centre-right contender who promises to undo its pioneering marijuana law.
The Broad Front coalition has delivered a decade of strong economic growth and outgoing President Jose Mujica's social reforms, including the legalization of the production and sale of marijuana, have drawn global attention.
Uruguay's constitution bans two consecutive terms. Mujica, a 79-year-old former guerrilla who turned up to vote in his 1987 Volkswagen Beetle and has donated much of his presidential salary to charity, hopes to hand power to his predecessor and ally Tabare Vazquez.
Vazquez faces stiff competition from Luis Lacalle Pou, 41, who has climbed steadily in polls since his unexpected victory in his National Party's primaries.
Opinion polls have put Vazquez on 43-46 percent compared with 31-33 percent for his younger rival. That would leave Vazquez short of the majority he needs for a first round victory and means a tight runoff in November is widely expected.
Vazquez brought the Broad Front to power in 2005 and his blend of pro-market economic policies and social welfare measures which slashed poverty rates won broad support.
Mujica continued the model, but his social reforms went further than Vazquez, legalizing gay marriage and abortion.
"So we are killing babies now and the state will sell marijuana," said Adriana Herrera, a 68-year-old pensioner. "My frustration is not just with the handout policies but also with the laws that have been approved that are terrible for the country."
The son of former conservative president Luis Lacalle has tapped into a simmering discontent felt by some Uruguayans toward high taxes and the Broad Front's social reforms that also include the legalization of abortion and gay marriage.
Lacalle Pou told Reuters last week he would try to repeal the state-regulated production and sale of marijuana if he won.
The first round was proceeding smoothly on Sunday across the small South American country of 3.4 million. Voting is mandatory and people lined up at polling stations, many sipping a local tea called "mate" from gourds through metal straws.
OLD VERSUS YOUNG
Uruguay's $55 billion (34.19 billion pound) economy has grown an average 5.7 percent annually since 2005. The government forecasts lower growth of 3 percent this year, although that is still better than in neighbouring giants Argentina and Brazil.
The number of Uruguayans living in poverty has fallen sharply to 11.5 percent from more than a third in 2006.
"I want to stick with the Broad Front that ensures success," said Soledad Fernandez, a 27-year old student. "Vazquez and Mujica looked after the vulnerable people."
Lacalle Pou's supporters argue it is time for change. They say the surfing enthusiast and father of three is more in touch with Uruguay today than the socialist old-guard and that he brings a fresh face to Uruguayan politics. Vazquez is 74-years-old.
"Alternation in power is positive, and while the Broad Front did positive things, the National Party can bring more growth," said Miguel Angel Avilar, a 45-year old shopkeeper following election coverage on a tiny television in his tuck shop.
While financial markets believe the Broad Front's economic policies are sound, some analysts say Lacalle Pou is more likely to rein in an above-target fiscal deficit and an inflation rate almost in double digits.
Polling stations closed at 7.30 p.m. (2130 GMT). Exit polls will be released at 8.30 p.m. and partial results are expected by 10 p.m.
Voters also elect lawmakers on Sunday. Neither the Broad Front nor the National Party are likely to win a majority in Congress, meaning the next president will face a tougher time than Mujica in passing laws.
(Additional reporting by Esteban Farat; Writing by Sarah Marsh; Editing by Kieran Murray, Richard Lough and Nick Zieminski)