Nicaragua Using Embargo as Propaganda Ploy

The Reagan Administration’s trade embargo against Nicaragua has given the leftist Sandinista government new grist for its propaganda mill, but the extent to which the already depressed Nicaraguan economy will be affected by the U.S. move is not yet clear.

A Sandinista official likened the U.S. sanctions to the 1972 earthquake that devastated Managua, but an industrial leader said the embargo, which is to take effect Tuesday, will have only a marginal impact because the Sandinistas’ policies and the guerrilla war have already caused disastrous damage.

What is clear is that the Sandinistas see the embargo as a useful tool for blunting public criticism of their government and for rallying support to their cause.

“It is to their advantage,” a foreign diplomat here said, “to signal to the Nicaraguan people that this is going to cause horrific problems . . . , and this will enable them (Nicaragua’s leaders) to say that ‘all your problems are caused by the United States.’ ”

‘Say Uncle Sam’

Defense Minister Humberto Ortega referred in a speech to the trade embargo as a “blockade” and said it will hurt all Nicaraguans.

“It is as if the ’72 earthquake has happened again,” Ortega said. “They hit us with a club, and they tell us, ‘Smile. Say you’re sorry. Get down on your knees. Say Uncle Sam. Want some chewing gum? Say Uncle Sam.’ ”

Pro-Sandinista newspapers have devoted pages of space to “raising consciousness” about the embargo since it was announced Wednesday.

“Everyone Against the Blockade,” a headline in one paper said Friday. “International Opposition to Imperialist Blockade,” another said.

One paper, in a roundup of popular reaction to the embargo, quoted a woman hammock-maker as saying: “The working class must be united to increase production and deal a blow to American imperialism.”

It was Jaime Bengoechea, president of the Nicaraguan Chamber of Industry, who said the impact will be marginal. “It is as if someone who has cancer gets a cold,” he said.

Output Down From ’79

He said production has already dropped to a third of its pre-1979 level because of the socialist policies of the government, and he acknowledged that the war being waged against anti-Sandinista rebels, called contras , has taken a toll of the economy.

However, a foreign economist, who asked not to be identified by name, argued that the embargo could be severely painful. “The economy is obviously in a tailspin now, and this is going to help it get worse,” he said.

Most Nicaraguan factories use U.S. equipment installed before the 1979 Sandinista revolution, and they have customarily obtained spare parts from the United States. Buying parts in other countries, the economist said, will increase costs and cause delays.

Most of Nicaragua’s imports from the United States are supplies and spare parts for industry and agriculture.

American consumer goods already are expensive and hard to get because the government strictly limits non-essential imports to save scarce dollars. Privately owned American cars are chronically in poor repair for lack of replacement parts.

He said Nicaragua’s only oil refinery, run by Exxon, may have to shut down temporarily if it cannot get essential spare parts quickly when they are needed. A shutdown could cause fuel shortages here that would mean reduced production in factories and on the farm.

Political Purpose Seen

About 16% of Nicaragua’s exports go to the United States, including bananas sent to California. The economist said that having to send the bananas to a more distant market will increase transportation costs and may make growing bananas unprofitable.

But a Western diplomat predicted that exports that have gone to the United States can be placed readily in other markets. And he said Nicaragua will be able to buy spare parts and other supplies from Canada and other countries.