Aid to Nicaragua

NICARAGUANS gave a collective sigh of relief at the release of the last hostages in a weeklong standoff between former contras and Sandinista supporters.

That the crisis ended peacefully and with only one casualty is gratifying, given the depths of resentment and frustration that have built up since President Violeta Barrios de Chamorro's election three years ago. The hopes that soared with her coalition's overhelming defeat of Sandinista leader Daniel Ortega Saavedra in elections in 1990 have plummeted. Her position has grown steadily weaker, undercut by unfulfilled campaign promises, deep animosities left over from the country's eight-year civil war, an d especially by the country's crumbling economy. Unemployment is running at 60 percent. Aid, particularly from the United States, may well be the country's largest import: It has received some $737 million from the US since 1990.

Which makes current efforts in Congress to block further aid troubling. Led by Sen. Jesse Helms (R) of North Carolina, the Senate voted to halt aid to Managua after an arms cache exploded in the city in May. INTERPOL investigators say the cache may have been part of a terrorist network. Mr. Helms, who delayed $100 million in aid to Managua last year, has tried to link the cache to the Sandinistas. Defense Minister Humberto Ortega Saavedra denies such links, saying the cache belonged to a faction of El Sa lvador's left-wing Farabundo Marti National Liberation Front. Meanwhile, the State Department is leaning on Chamorro to remove Sandinistas from her government.

The terrorist charges deserve a thorough investigation. But they also come in the context of dissatisfaction among conservatives in the US, as well among those as in Nicaragua, with the number of Sandinistas in key government roles.

In this case, Congress should not block the aid. To do so imposes a harsh penalty before charges have been proven. It would fuel further economic decline and undercut domestic support for Ms. Chamorro. Nicaragua's conservatives could read a cutoff as a strong sign of US support for them. This would further encourage political fracture.

If the US is serious about fostering democracy in Nicaragua, it should help to bring the country's factions together and to strengthen Chamorro's hand. Only then would she be in a position to act firmly if terrorist links were proved.