Contadora gets a reprieve. But can Latin peace effort capitalize on US woes?

The Contadora peace process has received an inadvertent boost from the Iran-contra affair. United States policy in Central America is under attack and suddenly the efforts of four Latin American nations to bring peace to the region - considered all but hopeless a few months ago - are back in the spotlight. The key question, say analysts in Washington, is whether Contadora can capitalize on this opportunity. The group, along with its four support nations, begins a three-day meeting today in Rio de Janeiro that was planned before the Iran-contra affair emerged.

Panamanian Foreign Minister Jorge Abad'ia Arias, speaking in an interview here, says the Rio meeting has two objectives: (1) to set up a mechanism for pacifying Central America immediately and (2) to try to smooth over the objections of various Central American nations to aspects of the draft Contadora treaty.

``Something has to be done - really quickly. There's a lot of confusion in the area,'' especially along the Nicaraguan-Honduran border, Dr. Abad'ia says. ``Even though war is near, the effort for peace may bring results.'' Abad'ia was in Boston last weekend for an award ceremony of the Beyond War organization, which recognized the Contadora group this year. Panama, along with Mexico, Venezuela, and Colombia, are the group's principal members.

Possible ways in which Contadora could help calm the region include deployment of a multinational force along Nicaragua's borders with Honduras and Costa Rica and monitoring troop movements electronically, Abad'ia says. The multinational force would not contain troops from Central or South America, nor would it be a UN force, he adds.

At a meeting at the UN in September, the Contadora foreign ministers were reportedly feeling rather dejected. The US Congress had just approved $100 million in aid to the Nicaraguan contra rebels with hardly an objection from other Latin American nations, which felt they could ill afford to sour relations with the US.

But in the past month or so, US influence among its allies in the region seems to have waned a bit. Honduras is taking a firmer stand to get the contras off its territory. Costa Rican President Oscar Arias S'anchez, visiting Washington earlier this month, spoke against US policy in Central America. The US has been embarrassed by the shooting down of US flier Eugene Hasenfus over Nicaragua in October, the Iran-contra scandal, and now Nicaragua's arrest Friday of another American, Sam Nesley Hall, accused of spying.

One of the persistent problems Contadora has faced is that its draft treaty is meant to be signed by the five Central American nations, three of which are US allies. Those three nations - Honduras, Costa Rica, and El Salvador - tend to follow the US lead, which in this case has been not to lend Contadora much support.

So if US allies continue to show greater independence, Contadora may win greater support, suggests Peter Hakim, director of Inter-American Dialogue.

The changed atmospherics in Washington could also work in Contadora's favor, Mr. Hakim adds. Funding the contras has become a tainted operation, and congressmen - still eager to show they are doing something to contain the perceived threat of Nicaraguan communism - are looking for an alternative. The question is whether Contadora can provide that alternative. Foreign Minister Abad'ia says he feels Washington is now more willing to take Contadora seriously. Hakim tends to agree.

``Contadora needs to act more energetically,'' Hakim says, ``to create an atmosphere of moral suasion to get the parties to accept the mechanism it has set up.''

The Contadora treaty includes calls for an end to international military maneuvers; an end to outside support for guerrillas; and establishment of democratic rule in each country. The first two are sticking points.

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