US Policy on Nicaragua Should Address Economics

LAST month's hostage crisis in Nicaragua appears to confirm a simplistic view widely held in the United States that the main problem in Nicaragua is the persistence of ``old hatreds.'' After all, the hostage crisis began when a group of rearmed Contras, or ``Recontras,'' kidnapped a peace delegation sent by Violeta Barrios de Chamorro's National Opposition Union (UNO) government and demanded the ouster of Sandinista Defense Minister Humberto Ortega Saavedra. In retaliation, a group of rearmed Sandinistas kidnapped, among others, two members of Nicaragua's ultraright.

It would appear as though the main division in Nicaragua is still between the Sandinistas and the Contras, and the main issue is the role of the Sandinistas in the government. This is a mistaken impression. The major battle line in Nicaragua is not between Sandinistas and Contras, but between a government bent on pursuing certain policies of economic restructuring and the vast majority of people on the bottom of society, who are the victims of those policies. Contrary to the dominant impression in the US, Sandinistas fall on both sides of this divide.

The Recontra group that initiated the hostage crisis represents Nicaragua's ultraright. Often, however, ex-Contras and Sandinistas work peacefully together. Joint ventures are being undertaken, for example, by the Sandinista National Union of Small Farmers and Cattle Ranchers (UNAG) and the Association of ex-Resistance Commanders (ACOR). Douglas Hunter, a former Contra commandant and co-founder of ACOR explains: ``UNO should have been our natural ally but, ironically, it has been the other side that has understood our problems and helped us. They have shown a genuine interest in the problems of the demobilized.

``The UNO's government,'' he says, ``has been totally irresponsible, a disaster.''

THERE is little evidence that, as is alleged, the government of Ms. Chamorro has been hijacked by the Sandinistas she defeated in the 1990 elections. Government policies are fully in line with the economic restructuring program mandated by USAID and international lending agencies. If the Nicaraguan government has been hijacked, the culprits are USAID and the international lending agencies, which have imposed, as they have throughout the third world, a ``one size fits all'' regimen of economic restructuring. This regimen is the primary source of unrest in Nicaragua.

Under economic restructuring, Nicaragua must catch up on its debt payments, open its markets, reduce public spending, and orient itself toward the export market. Between payments for debts and imports, loan money now flows out of Nicaragua as fast as it flows in. With protectionist barriers removed, Nicaragua imports rice and beans that it could be growing itself on now-idle farms. So much is imported that Nicaragua's trade gap now approaches half of the country's gross national product.

Particularly destabilizing to Nicaragua is the allocation of 70 percent of farm credits to a small number of large export producers. Thanks to Sandinista reforms and subsequent demobilization agreements, rural Nicaraguans may now have land, but they lack funds to grow anything on it. In fact, a ``counter reform'' is underway as cash-starved peasants sell their land to wealthy estate owners.

It is in this context that demobilized Contras and Sandinistas find common cause against the government. If the US wants to help Nicaragua stabilize, it should stop worrying about the Sandinistas and address the country's real problems. The Opinion/Essay Page welcomes manuscripts. Authors of articles we accept will be notified by telephone. Authors of articles not accepted will be notified by postcard. Send manuscripts by mail to Opinions/Essays, One Norway Street, Boston, MA 02115, by fax to 617 -450-2317, or by Internet E-mail to OPED@RACHELCSPS.COM.

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