Nicaraguan President's Tough Balancing Act

New property and police reforms criticized by left and right. CENTRAL AMERICA

NICARAGUAN President Violeta Barrios de Chamorro took some of the most momentous decisions of her term last week in an effort to provide her country with a modicum of political stability that it desperately needs.

Facing severe cross-pressures within Nicaragua and the threat that a temporary suspension of US economic assistance could become permanent, Mrs. Chamorro appears to be walking a very thin tightrope in her attempt to solve two thorny problems.

The Chamorro government announced Sept. 2 that thousands of people whose homes, farms, and businesses had been confiscated in the 1980s under the rule of the Sandinist National Liberation Front were entitled either to get their properties back or receive compensation.

Three days later Chamorro announced the retirement of Chief Rene Vivas and 11 other high-ranking Sandinista officers of the National Police. The new police chief, Fernando Caldera, is also a Sandinista.

Chamorro's decisions did not leave anyone pleased, however, and with Nicaraguans still reeling from the Sept. 1 tsunami, the short-run prospects for the country to achieve stability are still uncertain.

When US Secretary of State James Baker III visited Managua in January, he warned his hosts that US aid would be jeopardized if they did not furnish "security" for investors. The chief obstacle, he asserted, was Nicaragua's Sandinista-controlled police force, which often refused to execute orders to return confiscated holdings.

In May, Sen. Jesse Helms (R) of North Carolina, a longtime critic of the Sandinistas, engineered the suspension of a $104 million aid disbursement pending a set of "changes" in Nicaragua. By August, when his staff issued a thick report, these had swelled to include removal of the entire police leadership, the ouster of Army chief Humberto Ortega, a complete overhaul of the country's judicial system, investigation of human rights abuses, and the return of expropriated properties.

Before the government's announcements last week, Sandinista leader Daniel Ortega Saavedra argued that "if the government caves in to the Yankees, it will lose all legitimacy." Threatening to mobilize the Sandinistas in a "civic rebellion," he warned: "We will have no other option but to oppose it, and if the government falls, it falls."

Mr. Ortega seemed mollified by the announced changes. "The government did not give in to the pressure," he said in an interview Monday.

In sticking with Sandinistas in the police and Army, Chamorro and her chief minister, Antonio Lacayo, have apparently decided to avoid a destabilizing clash with the Sandinistas at the risk of continued trouble with the United States. The Nicaraguan leaders even erected a wall against further US pressures by decreeing a law that will govern all future changes in the police leadership. And Mr. Lacayo stated flatly Monday: "These are the only changes we are going to make."

Reactions from critics of the Sandinistas were heated. Lino Hernandez of the Permanent Commission on Human Rights criticized the decision to name Mr. Caldera as the new police chief, citing human rights violations for which he allegedly was responsible during the 1980s.

And Senator Helms does not appear likely to drop his objections to aid, spelling trouble for Nicaragua's economy.

"If the aid is not released, it means a serious problem for our stabilization program," Central Bank chief Silvio de Franco said last week.

The new property decisions could also cause problems for Chamorro. The government plans to compensate those whose land was expropriated by giving them shares in public utilities. This plan sits well with Nicaragua's elite business sector, whose leader, Ramiro Gurdian, told the newspaper La Prensa: "I'm sure this is going to satisfy a large number of people."

But Nicaragua's largely Sandinista unions oppose privatizing public utilities, saying it will lead to massive layoffs as well as higher rates for users.

Another prickly point is a commission that will examine cases resulting from two 1979 decrees that expropriated the holdings of Nicaraguan dictator Anastasio Somoza Debayle and many of his supporters. Some of the Somocistas have since become US citizens, and with the help of Helms are now demanding that the US government seek recovery of nationalized businesses.

The Chamorro government has given few clear signs of what it will do with these claims. But there are Sandinistas who fear that it will return at least some of these holdings to please the US and to secure at least some of the withheld aid.

"We think the government will move more in the direction of returning holdings than in indemnifying people," says Freddy Cruz, an adviser to the pro-Sandinista National Workers Front. He warns that workers will seize factories to prevent them from being returned to Somocistas.

Chamorro's decisions have their positive side. High-ranking officers long accused of human rights abuses have been purged from Nicaragua's police, and the government has promised land titles to tens of thousands of peasant families, confirming their rights to holdings acquired during more than a decade of agrarian reform.

But caught up in the vicissitudes of both US and Nicaraguan politics, they are unlikely as yet to be the solution her government is seeking to its problems.