Nicaragua: Sandinistas still in the driver's seat.

• Author: Alisky, Marvin
• Position: Column

IN 1990, Violeta Chamorro and her United Nicaraguan Opposition (UNO) Party enjoyed a stunning victory over the ruling Sandinista Party under Pres. Daniel Ortega. Marxist Sandinistas had taken power by force in 1979, ousting the corrupt dictatorship of Gen. Anastasio Somoza, then built their own version of an authoritarian state. The Ortega regime confiscated much of the private sector, expropriating farms, ranches, and industries.

Soviet and Cuban aid had bolstered the Sandinista government during the 1980s while the U.S. political establishment was fighting over whether it was right or wrong to support the Contras, opposition forces composed of Somoza supporters and others disenchanted with early Sandinista behavior. With the end of

Soviet aid to Nicaragua in 1989, domestic pressures forced an election in February, 1990, and the UNO won in a landslide. As a compromise for a peaceful transition of presidential power, Sandinista police, army, and unions remained in place. The U.S. resumed economic aid to Managua to encourage a return to civil rights and a private sector economy, without success.

During 1990 and 1991, despite Sandinista unions calling strikes. the Chamorro government managed some monetary stabilization, marginal deregulation, and a degree of privatization. However, Ortega warned the Congress (National Assembly) not to repeal the giveaway the Sandinistas achieved just before they left power. He threatened a civil war if these expropriations were repealed, and the UNO Congressional majority and Chamorro's Cabinet backed down. The thousands of houses, land, and other property the Sandinistas gave to their leaders just before leaving office have remained in Sandinista hands.

The Chamorro government explained it was trying to avoid the winner-take-all politics of Nicaragua's past. By early 1992, though, the pro-Sandinista daily, El Nuevo Diario, reported that the UNO majority in Congress (National Assembly) could not keep Sandinista political groups from setting the government's agenda. Nicaragua continued to be without clear rules for property fights, whether they concerned financial instruments or fixed assets. This lack of clarity prompted the unwillingness of foreign investors to make significant investments. Chamorro managed to revive some private banks, but the government-owned ones continued to run as they had under Sandinista rule, having no capital requirements and monthly subsidies from the government's Central Bank...