Chamorro's Nicaragua at Year One

Economic recovery is elusive and peace tenuous, but many say progress has followed civil war

ONE year after Violeta Barrios de Chamorro was inaugurated as president, Nicaragua remains a country in crisis. Sandinista strikers continue to snarl government operations. Chaos reigns in the countryside, as ex-contra and ex-Sandinista soldiers alike illegally seize land. With more than 60 percent of the population in poverty and 40 percent unemployed, Nicaragua's economic situation is desperate.

All of which, observers here say, still represents progress.

On the anniversary of her first year in power, Mrs. Chamorro faces an array of problems that would daunt any government. So far, she has failed to deliver on her promise of economic recovery. And the peace she helped establish is tenuous.

Yet, in its first year, her administration can take credit for having made significant progress, including important steps to demilitarize the nation, open its economy, and, perhaps most important, heal the wounds of a war that left tens of thousands of Nicaraguans dead.

"What Violeta Chamorro wants above all is reconciliation of the Nicaraguan family. And so far she has accomplished an astonishing amount to put the country on that path," says a Latin American diplomat here.

Santiago Murray, coordinator of a relief effort led by the Organization of American States, says: "If you consider the shape this country was in, the change in the last year has been dramatic."

It has not been an easy job, nor is it near complete. The nation Chamorro inherited last April was practically bankrupt; living standards in the last 10 years have plunged to the levels of the 1930s. Stunned by their election defeat, members of the the outgoing Sandinista leadership sacked the government before leaving, turning over a bureaucracy that was both recalcitrant and disorganized. The police and Army remained under their control.

Chamorro's decision to confront these problems by forming an alliance with moderate Sandinistas remains controversial. The continued presence of Humberto Ortega Saavedra, brother of former President Daniel Ortega Saavedra, as Army chief, has alienated the conservative wing of the 14-party coalition that united to elect her.

"Violeta promised that she would make a change, not have a co-government. This is not what she originally offered," says Gilberto Cuadra, president of COSEP, the country's private enterprise council.

Adds Candida Gentzschein, a widow who voted for Chamorro: "Violeta has been too soft.... The Ortegas still have power. They have the guns."

In some ways, however, the alliance is paying off. By joining with the more moderate wing of the Sandinista National Liberation Front, Chamorro appears to have coopted the opposition, contributing to its disarray. Evidence of divisions among the Sandinistas surfaced most recently with the government's March 3 announcement of economic austerity measures. While the Sandinist National Liberation Front generally backed the program, the unions it traditionally controls responded with strikes.

"The Sandinista Party is in a dilemma. This is the most friendly government they can have. It's not in their interest to see it fall," says Emilio Alvarez, a Conservative Party politician. "But they also don't want to lose the support of the workers."

Chamorro says General Ortega's presence has helped her to make significant reductions in the Sandinista Army, which has been cut to 28,000 members from about 80,000 a year ago. Though the armed forces' allegiance is still in question, the president appears to be slowly consolidating her authority over these Sandinista-trained institutions. Earlier this year, the police forcibly removed Sandinista strikers from customs offices on government orders, a sharp contrast to their performance last July, when so me members of the force actually helped Sandinista strikers build barricades.

"Violeta is getting there," says a Bush administration official. "It may not be as fast as many in her country would like ... but she's getting there."

Yet, she also has a long way to go. Though the United States-supported contra rebels have been demobilized and 22,500 former fighters and their families repatriated, the situation in the countryside remains combustible.

Nearly 7,000 ex-contras are still waiting to receive land, and with the approach of the May planting season, their demand for property grows increasingly urgent. Clashes with Sandinista cooperatives are common, and the unsolved murder of former Contra military chief Enrique Berm 156>dez in Managua on Feb. 16 has raised tensions.

About 150 ex-contras reportedly returned to the mountains to take up arms following the killing. Though an official familiar with the group points to its action as an "isolated thing," he characterizes parts of northern Nicaragua as a tinderbox.

Of even greater concern is Nicaragua's prostrate economy, which has continued to deteriorate, with production falling 5.7 percent last year and inflation totaling 13,500 percent. Facing dire conditions, Nicaragua's poor wonder if the government has forgotten them.

"Violeta promised at the beginning to help us," says Candida Mayorquin, who lives in the ruins of Managua's old California shopping center, washing fellow squatters' clothes to make ends meet. "But the truth is I haven't seen her face around here."

In Washington last week, the president finally moved closer to solving one of her biggest economic hurdles: repaying $360 million in arrears to the Inter-American Development Bank and the World Bank.

During a state visit by Chamorro, the first by a Nicaraguan president since 1939, President Bush promised to help Nicaragua clear up the debt.

Meanwhile, Chamorro continues her balancing act, juggling demands of Nicaragua's formerly warring factions with slim resources. Until Nicaragua's economy is boosted, even the peace she helped establish is tenuous.

"There's an equilibrium now, but it's unstable," says author Oscar Ren Vargas. "There are strikes, there's pressure from the contras, there's pressure from COSEP. It's like an active volcano. It's not erupting, but if you look in the crater it's boiling."

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