Challenging the Sandinistas

By Sara Medina

Hard times ahead for a war-shattered country

When guerrillas of the Sandinista National Liberation Front swept to power in July 1979, hopes were high that the forces that had united to overthrow hated Dictator Anastasio Somoza would join together to rebuild the war-shattered country. That did not happen. The nine-member Sandinista directorate, which is the real political power behind the country's five-man governing junta, has angered Nicaragua's nonradical friends abroad by adopting a strongly pro-Cuban and pro-Soviet foreign policy. The Sandinistas have also alienated nearly all their onetime anti-Somoza allies at home by trying to impose one-party rule on the country. The regime must now choose whether to move toward the center and share power with other political groups, or to retain its hold on the country by force of arms. An impending U.S. decision on whether to end foreign aid to Nicaragua will have a critical effect on what direction the regime may take.

The Reagan Administration is angered by the Sandinistas' all too enthusiastic support for the leftist rebels in neighboring El Salvador. Documents reportedly captured last month from leftist guerrillas indicate that weapons were offered to El Salvador by the Soviet Union, its East European satellites, Viet Nam and Ethiopia. And as one U.S. official puts it, "All that stuff either came from the moon or it came through Nicaragua." A State Department task force is trying to determine the extent to which the regime is officially involved in the arms traffic. If it concludes that the Sandinistas abetted the shipments, it will invoke the so-called terrorist clause to cut off aid, which in 1980 amounted to $60 million.

Foreign aid is about all that has kept Nicaragua's economy going. Even with an estimated $450 million in aid and loans, the Nicaraguan economy ended last year completely bankrupt. Because of inflation, higher oil prices and lower aid levels, Nicaragua this year faces a potential $240 million balance of payments deficit. Exports of coffee and cotton may offer a temporary respite, but the future for agricultural production could be bleak; no new coffee bushes have been planted since 1979, and it takes at least three years for the plants to mature.

Because of the foreign-exchange squeeze and war disruptions, Nicaragua has a desperate shortage of spare parts. Decisions about economic priorities are either not being made or being made badly. Says a foreign economic observer in Managua: "You have a former guerrilla trying to decide between importing a drive shaft for a fishing boat, a tractor part, medicines or a Mercedes for his commandante. For somebody he will be making the wrong decision."

Diplomats in Managua are divided on whether Sandinistas would win an election today, but in fact there will be no elections until 1985 at the earliest. Peasants and workers have been largely unaffected by the Sandinistas' attempts to consolidate their eroding political base by imposing media censorship, harassing opposition parties and politicizing the security forces. The regime has also tried to stir up the populace by warning of "threats" from exiled forces in Honduras.

The Sandinistas' main opposition comes from Nicaragua's business community, which still controls about 60% of the economy, despite the nationalization of banks, some industry and some large agricultural holdings. The business leaders' powerful umbrella group, the Superior Council on Business (COSEP), has virtual veto power over matters concerning economic recovery. Says a foreign economic analyst in Managua: "If COSEP ever said this country is gone, don't give it any more foreign aid, there wouldn't be any more aid."

Businessmen have been wary of the Sandinistas since the leak last year of something called the 72-hour document. This clandestine paper described how a Marxist regime should tolerate a private sector only until the government was able to take over the economy and throw the capitalists out. Confiscations of land and factories by the government suggested to many business leaders that the Sandinistas took the document seriously.

The businessmen were further hardened against the regime after security forces last November shot to death Jorge Salazar, a popular, prominent businessman and COSEP member. The Sandinistas claim that Salazar was conspiring to overthrow the government, but business sources believe that he was framed in order to discredit the private sector.

The hostility is mutual. Though COSEP Director Enrique Dreyfus insists that his organization "is not a political party," the Sandinistas regard the business community as a distinct political threat. "COSEP is not a group of businessmen," but a group of politicians , " says Interior Minister Tomas Borge, a member of the Sandinista directorate. "They question the revolution. We're not refusing to talk to them. But what we will discuss is what role they can play within the revolution."

Since 60% of U.S. assistance to Nicaragua supports the private sector, an aid cutoff might well undermine the moderate, pro-democratic groups that the U.S. wants to encourage. It would also cost the U.S. its remaining leverage with the Nicaraguan regime and could give Sandinista hard-liners an excuse to end any pretense at political pluralism and turn even more openly to the Soviet Union and its allies for support. An American diplomat in Managua, fearing the results of an aid cut off, cited an ominous parallel: "Twenty years ago in Cuba, we left no doors open. Here, there is a real chance that the Sandinistas might walk through such a door." But the Reagan Administration may decide that it is politically more important to give the Sandinistas an object lesson in the cost of supporting international terrorism. -- By Sara Medina. Reported by Roberto Suro/Washington and James Willwerth/ Managua

With reporting by Roberto Svro, James Willwerth

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