Nicaragua Crisis Shows Chamorro Her Limits

Government's muscle-flexing underestimated political effect of tough economic plans

THE government of Violeta Barrios de Chamorro has passed through its first fiery confrontation with the powerful Sandinista Front with several lessons learned. Prime among them is that 60,000 mostly pro-Sandinista civil service workers are unlikely to accept being bluntly told they will be fired if they do not report to work. Their strike, which halted telephone, airline, water, and other basic services for much of the week ended late Wednesday night with a compromise solution.

But analysts and observers believe the Chamorro government is wiser, having learned that political persuasion will be required to woo Sandinista cooperation to fix the battered economy.

``The whole episode of the strike is a lesson for all sectors of the country, but particularly for the government,'' said Mario Arana, an economist with the Managua-based Institute for Socio-Economic Research. ``They learned that you have to analyze the political repercussions which tough economic policies will have on a highly politicized population. And the government clearly underestimated the strength of the Sandinistas.''

From the beginning the six-day labor dispute had more political overtones than economic demands. Breaking with the generally moderate tone prevalent since Mrs. Chamorro's unexpected election victory in February, the country appeared for several days to be slipping back into what one local analyst calls Nicaragua's ``cycle of confrontation.''

The government was forced Wednesday night to guarantee strikers job security, pending formal review of a job-security law passed in the Sandinista government's final week's in office. It was the government's move to suspend the law that resulted in the strike May 10.

In exchange, workers settled for a pay raise of roughly 100 percent, apparently convinced the 200 percent salary hike they had asked for would only fuel already-high inflation.

The Chamorro administration wants to introduce an economic recovery plan to privatize the economy and bring inflation under control. Devaluation of the currency has brought criticism as prices for goods have soared.

But it was Labor Minister Francisco Rosales threat to fire those who refused to return to work that intensified the strike.

``We will not permit the cost of their economic plan to fall only on the workers,'' declared top Sandinista union leader Lucio Jimenez. ``The workers will keep them from undoing the revolution and try to return land to the [supporters of the late dictator Anastasio Somoza Debayle.]''

Government decrees last week, which included dropping job security for government workers, raised the question of whether the president had the constitutional right to issue such measures without approval of the National Assembly. Analysts say the government was testing the limday night with a compromise solution.

But analysts and observers believe the Chamorro government is wiser, having learned that political persuasion will be required to woo Sandinista cooperation to fix the battered economy.

``The whole episode of the strike is a lesson for all sectors of the country, but particularly for the government,'' said Mario Arana, an economist with the Managua-based Institute for Socio-Economic Research. ``They learned that you have to analyze the political repercussions which tough economic policies will have on a highly politicized population. And the government clearly underestimated the strength of the Sandinistas.''

From the beginning the six-day labor dispute had more political overtones than economic demands. Breaking with the generally moderate tone prevalent since Mrs. Chamorro's unexpected election victory in February, the country appeared for several days to be slipping back into what one local analyst calls Nicaragua's ``cycle of confrontation.''

The government was forced Wednesday night to guarantee strikers job security, pending formal review of a job-security law passed in the Sandinista government's final week's in office. It was the government's move to suspend the law that resulted in the strike May 10.

In exchange, workers settled for a pay raise of roughly 100 percent, apparently convinced the 200 percent salary hike they had asked for would only fuel already-high inflation.

The Chamorro administration wants to introduce an econom million that Chamorro had requested.

The Chamorro government needs ``political savvy to introduce these policies,'' says Arthur Gallese, a social researcher with years of experience in Nicaragua. ``You can't run Nicaragua like a business.''