NICARAGUAN President Violeta Barrios de Chamorro's controversial decision last Saturday to fire Sandinista Army chief Gen. Humberto Ortega Saavedra next year, and move Army intelligence under civilian rule, is being welcomed by the United States and the Nicaraguan right.
``Independent of the errors that this government has committed, we cannot hold back our support for the president in this moment. We have to give it unconditionally,'' said Vice President Virgilio Godoy, who broke from Mrs. Chamorro shortly after her 1990 election and became a fierce critic.
US Secretary of State Warren Christopher praised the ``bold steps'' and suggested the shift toward greater civilian control over the military could preempt a move in the US Congress to freeze $98 million in aid.
But it remains unclear whether General Ortega's ouster will help or hinder reconciliation here. Recent events have earned Nicaragua a reputation as Central America's ``island of instability,'' as one local diplomat puts it.
Moderate Sandinistas, including the editor of the Sandinista daily, Barricada, have publicly stated that Ortega's resignation would ease tensions. But the Army expected a less abrupt, face-saving end to Ortega's 14 years as chief of the Army.
In a heated exchange after the Sept. 2 announcement, former President Daniel Ortega Saavedra, brother of Gen. Ortega, told Chamorro: ``You are not the owner of Nicaragua.''
Since Chamorro won the 1990 elections, under the banner of the National Opposition Union (UNO), a 14-party conservative coalition, the United States has pumped almost $1 billion into the country, including debt forgiveness. But the money has come in fits and starts because conservatives in the US Congress, led by Sen. Jesse Helms (R) of North Carolina, have disagreed with Chamorro's ``reconciliation'' policy of giving the Sandinistas a key role in her government.
The Sandinistas, still the nation's largest political party, stayed in control of the Army, police, and the Supreme Court. Last year, under US pressure, the Sandinista police chief was changed. Although Ortega's ouster is one of the UNO coalition demands, it is seen by some Sandinistas as another capitulation to right-wing ``Yanqui'' wishes. Credibility problem
But the Ortega firing and Army changes are also symptomatic of a credibility problem the Sandinistas have.
Last May, a secret Salvadoran arms depot exploded in Managua. Forged passports and other documents were subsequently discovered indicating the existence of an international Marxist kidnapping ring. Since then, five other weapons caches belonging to the former Salvardoran leftist guerrillas have been voluntarily turned over to Nicaraguan officials. On Sept. 4, Nicaraguan authorities discovered another weapons dump and communication center near Managua that reportedly belongs to Guatemalan rebels.
Last month, Daniel Ortega seemed to condone kidnapping as a political tactic. In retaliation for a kidnapping of Sandinista deputies by ex-contras, the vice president and several other UNO deputies were taken hostage for five days by ex-Sandinista soldiers. All the hostages were released unharmed. Ortega hugged UNO kidnappers as they departed on an Army helicopter.
``Daniel was imprudent,'' says Carlos Tunnermann, a former Sandinista leader and now an adviser to UNESCO. ``The worst thing a political party can do is link itself with terrorism.''
Many observers believe General Ortega knew or should have known about the arms caches. His apparent complicity prompted even liberal US Democrats to call for his ouster.
``Feelings are quite strong in Congress on this issue,'' says Jared Kotler of the Washington Office on Latin America, a Washington human rights policy group. ``Congress wants to see civilian control over the military and intelligence branch plus progress on human rights before it will vote for aid to Nicaragua. And it expects institutional reform and symbolic action - like Humberto's departure.''
Despite criticism at home and abroad, until now, Chamorro has steadfastly supported General Ortega as an important stabilizing pillar of her government. He was crucial to a dramatic reduction in the Army's size and gave Chamorro's policies a measure of support among Sandinistas.
As Chamorro herself says, Nicaraguans are poor and ``tired of recriminations and the lack of understanding.''
In the mountains, there are ex-combatants from both sides of the civil war feeding on the anger over unkept government promises - stealing, engaging in battles with the Army, and kidnapping congressional deputies.
In the capital city of Managua, crime and poverty are rising. Unemployment has climbed to 60 percent. Economic growth is non-existent. Chamorro has stabilized the currency, and the once empty stores are filled with imported consumer goods. But few have the money to buy foreign goods.
The problems of economic stagnation and political instability feed on each other. ``Nobody will invest a dime here until you have political stability,'' argues one Western diplomat. But if US aid is cut off, the hunger and poverty is likely to increase and exacerbate the political turmoil.
Despite much talk of ``dialogue'' and consensus building, in three years the Chamorro government has made little headway in finding common ground between the Sandinistas on the left and the conservative UNO coalition on the right.
At a minimum, what the two sides need is to form a common agenda, Mr. Tunnermann says. ``They don't have to agree on solutions yet. Just identify areas of discussion and agree to work on them. The situation is serious and time is running out.'' Three-way talks
Three-way talks were scheduled to begin last Monday with Sandinista leaders, the government, and the rightist members of UNO. But the leaders of UNO said they would not attend the so-called ``National Dialogue.'' Duilio Baltonado, head of UNO, said the group would boycott talks until Chamorro ousts Congressmen who formerly supported UNO but now are allied with the leftist Sandinistas.
UNO had 51 seats in the 90-member National Assembly but dropped to 41 and lost its assembly majority when the legislators bolted.
The UNO decision dashed Chamorro's plans to open the dialogue as scheduled. The formerly ruling Sandinistas had pledged to take a seat at the table.
Organization of American States Secretary-General Joao Clemente Baena Soares said Wednesday he was giving up current efforts to end Nicaragua's ongoing political crisis and cutting short his visit after two days of unsuccessful negotiations. He said talks with the troubled country's main political groups indicated little willingness to compromise.
Increasingly, Sandinista moderates, such as Tunnermann, agree Ortega should go. But he warns outside ``pressure from the US, from Helms, is counter productive. It gives Ortega the opportunity to wrap himself in the Nicaraguan flag and rally support around him.''
As long as Ortega stays, US aid does not flow, and reconciliation remains rhetoric, most analysts are not optimistic about this island of instability finding its political gyroscope.