Sandinistas sound more moderate since Ortega inauguration. This may be effort to entice private sector to help rescue the economy

For the past few weeks, Nicaraguan Sandinista leaders have publicly followed the note of moderation struck by President Daniel Ortega Saavedra at his Jan. 10 inauguration. The new tone in their speeches comes during economic difficulties so severe that all of homes in Managua, the capital city, have their water turned off two days a week.

Whether the Sandinista words of moderation will be parlayed into actions that can affect the water supply and get the nation's economy running again is the major question posed by opposition figures as well as Western diplomats in this strife-torn Central American country.

Private-sector and middle-class lack of confidence is a key reason why Nicaragua's economy is worsening, well-informed Nicaraguan and Western sources say.

But the economic predicament has slipped so far that major structural overhauls -- including provisions for giving the political opposition more of a role in government -- may be required in order to win private-sector confidence and fresh investment.

The economic outlook seems particularly critical this month, because early winter is the time when most of Nicaragua's agricultural goods have been harvested but not yet sold. This year, according to one Nicarguan source with close links to the government, the economic pinch is particularly acute. He also notes that Nicaragua imports $800 million to $1 billion of goods every year but exports only $400 million to $500 million.

One of the major private-sector worries -- and certainly one of the biggest drains on the nation's economy -- is the war with the contras who are fighting the Sandinista government. But to settle that conflict, the Sandinistas must in the end come to a settlement with the Reagan administration.

With much talk in Managua centering on some sort of rapprochement between the Sandinistas and their Nicaraguan critics, it is not clear whom the government can come to a productive rapprochement with. The Reagan administration apparently won't make peace, having broken off the United States-Nicaraguan bilateral talks held in Manzanillo, Mexico. And at this point the Nicaraguan opposition has little to offer to the Sandinistas in the way of a rapprochement -- certainly not enough to get the water back on.

Up through the Nicaraguan presidential and national assembly elections in November and shortly thereafter, the rapprochement most talked about was a Sandinista settlement with an alliance of Nicaraguan political and business leaders, headed by Arturo Cruz Porras, who almost represented that group in the presidential race.

An understanding with Cruz before last November's presidential and national assembly elections would have had the advantage of putting the Reagan administration on the spot, since the US had so committed itself to Cruz that his blessing on the election would have made it difficult for Reagan to continue underwriting the cost of the contra side of the war. However, since the Nicaraguan elections came and went without obtaining either Cruz's participation or his blessing, the Sandinistas have lost that opportunity.

But at this point, a Sandinista roapprochement with the political opposition might not influence US administration policy greatly one way or the other. And it is not even clear, in the absence of changes in Nicaragua's economic and political system and of an end to the war, that a rapprochement would tempt the private sector into investing again.

Another negotiating alternative for the Sandinistas lies in the revival of the Contadora regional peace talks, which have been dormant since last fall.

The degree of flexibility President Ortega shows in the Contadora process will be a sign of how serious Nicaragua is about peace talks, says one Western diplomat.

The next round of Contadora talks may come in mid-February. That, at least is the time frame generally agreed upon by the Central American foreign ministers who went to Ortega's inauguration. This group met with Cuban leader Fidel Castro -- who has advised the Sandinistas to moderate their policies -- on inauguration weekend and mid-February was the time they agreed on for new talks.

Until now, there have been some differences between the Sandinistas and the other Contadora nations. The Nicarguans have said they will accept only some ``refinements'' on a draft peace treaty that was nearly signed last fall. The other countries involved believe that the near-agreement must be ``modified'' more extensively.

One Western diplomat believes that of all the negotiating possibilities open to the Sandinistas, Contadora is the one they are most interested in. Other observers stress that Managua sees Contadora as a way of obliging the United States to take direct US-Nicaraguan talks more seriously.

But direct talks with the US still are seen as the only way the Nicaraguans can truly begin to solve their problems. The Sandinsitas say that only talks with the US could end the war with the contras. (Almost all observers discount the possibility of serious negotiations between the Sandinistas and largest contra group, the Honduran-based, generally pro-Somocista Nicaraguan Democratic Force, because there is such a vast gulf separating the views of the two sides).

Some Republican congressional analysts who have close links with the Reagan administration say that Secretary of State George Shultz is strongly pushing resumption of US-Nicaragua talks. But it is still unclear if others in the administration are interested in reaching an agreement with the Sandinistas just now. The administration, many Republicans admit, distrusts the Sandinistas and largely views them as unredeemable communists.

Some observers believe that the Reagan administration will only modify its stand in a year or two if it sees that the contras have not been able to overthrow the Sandinistas.

In the meanwhile, the Sandinistas have taken two concrete steps toward moderation: (1) They initiated a dialogue with the Roman Catholic Church, which still retains the fervent allegiance of the large majority of Nicaraguans, and (2) they are preparing a foreign investment law in order to encourage investment of Western private capital.

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