Why Costa Rica's Arias is losing his luster

IS Costa Rica's President Oscar Arias S'anchez, winner of the Nobel Peace Prize, destined to become one of those leaders who is internationally acclaimed, but bogged down in political difficulty at home? It happened to Anwar Sadat. It happened for a time to Winston Churchill. Generally, Costa Ricans have taken great pride in Mr. Arias's international recognition, such attention being rare for the leader of a nation of only 2.5 million people. And most Costa Ricans supported his efforts for regional peace. As the quest for peace has floundered, however, and has seemed to be unraveling at times, some of Arias's luster may be wearing off.

One of the factors affecting his stature is that he is increasingly a lame duck. He is serving the last half of a four-year term and cannot seek reelection when his term ends in 1990.

The Costa Ricans emulate much from the United States, including a tendency for almost perpetual presidential campaigning. Already the ``pre-candidates'' are engaged in the ``pre-campaign,'' and the opposition has been taking some tough shots at Arias and his National Liberation Party. A leader of the United Social Christian Party recently charged that Arias has dedicated ``all his efforts to Central America and forgot to work for Costa Rica.''

That political broadside is only symptomatic of the problems affecting Arias. A compact country where almost everyone in politics or the media knows everyone else, Costa Rica is aswirl with political gossip. Much of it centers on claims of corruption and narcotr'afico - the region's drug trade.

If Arias has trouble at home, some of that trouble is attributable to the US; at least that is the feeling of some of Arias's supporters. Although the Reagan administration ostensibly backed Arias's regional peace efforts, it was always clear that this was grudging support. Indeed, some Reagan officials and supporters resented Arias and his Nobel Prize and viewed him as opportunistic and ungrateful (for US aid). Rather than encouraging the regional peace process, the US has often appeared to be undermining it.

Costa Rica's economy has been in difficulty for some time, with a burdensome ($5 billion) foreign debt and fluctuating trade levels. Unlike many other third-world countries, Costa Rica does not pour substantial resources into the military, since the country has none. But Costa Rica has a well-established, government-administered social welfare system, with strong health and educational services. The high level of public-sector employment has been a major target of outside analysts and critics, particularly during the Reagan administration, with its emphasis on privatization.

Arias has been able to do little to improve the economic picture, although he argues that a key to long-term economic progress in the region is political stability, a primary goal of the peace plan.

The one major Arias domestic initiative is an ambitious housing program. The goal is to build 80,000 homes during four years, which would alleviate the nation's severe housing shortage. Although there has been some noteworthy progress, Arias's pledge raised expectations to a level that will be hard to meet. The program is aimed primarily at the working class, but even with subsidies it is beyond the reach, for example, of some of those for whom it was intended in the troubled agricultural sector.

When Sadat devoted himself to working out peace with Israel, the US began delivering massive amounts of aid to Egypt. At almost every turn, however, the Arias government has been threatened with a reduction in US aid, on which Costa Rica is clearly dependent. US aid has been gradually declining, dropping from $217 million in 1985, before Arias took office, to $180 million last year. The latest problem for Costa Rica is an effort by Sen. Jesse Helms (R) of North Carolina to hold up $20 million of $90 million in economic support assistance for Costa Rica in fiscal year 1989.

Senator Helms wants to withhold the aid because of a dispute between a New Jersey businessman, J. Royal Parker, and a Costa Rican government agency. The controversy involves Mr. Parker's claim that Costa Rica owes him about $150 million as a result of government withdrawal from a cooperative venture at an Atlantic coast port. Mr. Helms, referring to it as ``expropriation,'' originally sought to suspend all aid to Costa Rica. Subsequently, he proposed an amendment, approved by the Senate, withholding the $20 million until Costa Rica agrees to binding arbitration on the issue.

Costa Rican officials argue that Helms is treating their country like a ``banana republic'' and that there is no legal basis for Parker's claim.

Whatever the outcome of the Helms amendment, it constitutes one more problem for Arias and Costa Rica.

The combination of lack of progress in the regional peace effort and mounting domestic difficulties may cause Arias's reputation to continue to fade. Significant movement in the peace process seems unlikely while Ronald Reagan is in office. On the other hand, election of Michael Dukakis, who is committed to support the Arias plan, could help project Arias into the international limelight once again.

Hoyt Purvis, director of the Fulbright Institute of International Relations at the University of Arkansas, recently returned from a visit to Costa Rica.