Ecuador is planning a massive sell off of state-owned assets to help get its budget under control and so increase its chances of a new International Monetary Fund loan.

The country is seeking a $240m loan, but has been refused the money in the past when the IMF ruled that planned economic reforms were insufficient.

The government now plans to sell $100m of assets before the end of President Gustavo Noboa's term in January 2003.

A committee is also being set up to oversee the sale of $400m of non-productive assets, such as unused buildings.

Shrinking economy

Analysts estimate there is a $350m financing gap in Ecuador's $5.6m budget.

The sale programme, designed to generate cash for the treasury, will be overseen by new Finance Minister Francisco Arosemena who has been in office for a week.

A corruption scandal forced the resignation of his predecessor.

Ecuador's economy shrank by 0.9% in the first quarter of 2002 - the first time the country has posted negative quarterly growth since it adopted the US dollar in April 2000.

The country had seen the strongest economic growth in Latin America last year, and is expected to expand by a further 4% in 2002.