* Draft finance reform proposals to be adopted on Friday
* Bolivia's Morales, Venezuela's Chavez have not shown up
By Walter Brandimarte
UNITED NATIONS, June 25 (Reuters) - Ecuador's left-wing President Rafael Correa lashed out at capitalism on Thursday, blaming it for the global financial crisis and suggesting that the International Monetary Fund and World Bank be abolished.
Criticism of the IMF and other so-called Bretton Woods institutions established during World War Two has become a running theme at a three-day meeting of the U.N. General Assembly on the global financial crisis.
"Patching up the Bretton Woods system, which we do not control, makes no sense for (developing) countries," Correa said in a speech on the second day of the conference.
Reforming the IMF and World Bank "would be an insufficient stopgap solution," he said, adding that "we are faced with a crisis unlike those (previously) provoked by capitalism."
If the Bretton Woods institutions cannot be abolished, he said, then they should be changed and given less authority over the world's poor countries. More financial decision-making power, Correa said, should go to the United Nations instead.
Cuban Trade Minister Rodrigo Malmierca Diaz had said on Wednesday that the IMF and World Bank had "impoverished" nations around the world and should be scrapped.
The U.N. meeting was originally scheduled for June 1-3 but General Assembly President Miguel D'Escoto, a leftist former foreign minister of Nicaragua, postponed it to this week because there was no agreement on a set of draft proposals on reforming the global financial system.
Roughly three quarters of the General Assembly's 192 nations are participating in the conference, which is expected to adopt a draft document outlining financial reform proposals which diplomats said now had close to unanimous backing.
The final proposals, watered down from an initial draft that was prepared by D'Escoto and rejected by Western powers as too radical, include a call for reforming the IMF.
But the only specific reform they call for is that the decision-making power of emerging market and developing states be increased in the next IMF quota review by early 2011.
MORE AID, DEBT RELIEF
The draft, which delegates plan to adopt on Friday, also calls for increased aid and debt relief for poor nations and more supervision of hedge funds and financial products like derivatives and warns against national trade protectionism.
It calls for "increasing cooperation" between the United Nations and global financial bodies but does not specify what that would entail. Nor does it call for a formal follow-up process after this week's meeting, as many poor states wanted.
Some delegations, including the United States and European Union, plan to issue statements after the proposals that will make clear they do not support all of the language in the document, U.N. diplomats said on condition of anonymity.
Most delegates have spoken of the need to reform the IMF and World Bank, but representatives of Western developed economies rejected the idea of abolishing the institutions.
"The Bretton Woods institutions have rarely been popular but they have never been so necessary," Britain's Africa Minister Mark Malloch Brown said on Wednesday. "Overall, they have responded quickly, flexibly and in a transparent way to the demands we have all placed on them."
Although the meeting has been billed as a summit, no Western leaders are attending. Less than a dozen presidents and prime ministers, mostly Latin American and Caribbean, showed up. Others taking part have sent lower-level delegates.
Western diplomats said the low turnout of world leaders at the U.N. conference reflected widespread dissatisfaction with the way D'Escoto organized it.
Presidents Evo Morales and Hugo Chavez, leftist firebrands and critics of the United States from Bolivia and Venezuela, were originally expected to attend but have yet to appear. (Writing by Louis Charbonneau; Editing by John O'Callaghan)