Why a small Central American country ignites heated debate within the United States; Military might: how much is too much?

Behind heightened US concern over the military buildup in Nicaragua lies a difficult question: What are that troubled country's legitimate military needs?

In the view of many Latin America experts, the military increase there is troubling. There is little argument that such a buildup, as outlined by US intelligence officials this week, is occurring. In a world where Nicaragua had only neighbors to worry about, an increase could not be justified.

But the history of Washington-Managua relations and the more muscular posture of the Reagan administration make this buildup understandable, say experts outside either government.

''I don't think there's much doubt about the size of the buildup,'' says William Perry, Latin America scholar at Georgetown University's Center for Strategic and International Studies. ''It's ominous in the sense that it will be used in some aggressive way or it will provoke a harsh reaction from the United States. . . .''

But a large military in present-day Nicaragua also must be seen in the context of recent history, points out Bruce Bagley, professor of Latin American studies at the Johns Hopkins University School of Advanced International Studies.

The US helped overthrow the government there in 1909. US marines remained there from 1912 to 1933, helping set up a strong National Guard that eventually assassinated the leader of a reform movement and was to become the repressive Somoza regime. The present US administration continues to tolerate the training of right-wing ''Somozistas.''

Underlying the concurrent increase in Nicaraguan arms and US rhetoric are also basic misunderstandings on the diplomatic offers that both sides have made.

Last year, US Assistant Secretary of State Thomas Enders told the Nicaraguans it would not intervene (or allow the Somozistas to do so) if Nicaragua would slow its military buildup, stop shipping arms to El Salvador, and allow greater pluralism in their country.

Nicaragua, on the other hand, offered to be part of a joint Nicaraguan-Honduran peace-keeping force along their common border in order to stop the alleged arms flow to El Salvador and counter-revolutionary efforts directed at Nicaragua.

Out of fear and mistrust, neither side has accepted the other's offer, and Dr. Bagley expects the Nicaraguans to attack any CIA-sponsored force in Honduras.

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