Managua Acts Against Critics as Economy Stalls

Shaken by an outbreak of economic unrest, the Sandinista government is acting forcefully to silence selected critics at home and restrict American help for the opposition in next year’s Nicaraguan elections.

In recent days, the revolutionary leadership has imposed a visa requirement that will end years of virtually free access to Nicaragua for American citizens, ruled out observer status for U.S. diplomats during the election campaign and threatened to block $5 million in above-board funding voted by the U.S. Congress for anti-Sandinista civic groups.

It has also expelled two U.S. diplomats accused of inciting labor turmoil, used tear gas to disperse striking taxi drivers and, in the latest crackdown Wednesday, seized all properties of three coffee growers who are critics of state control over the economy.

Hurling a politically charged term he rarely uses, President Daniel Ortega lashed out Thursday at private business leaders for failing to support the government’s efforts to rebuild the economy.

“If the rich want a class struggle, we will have a class struggle,” he told a Cabinet meeting.

Sandinista officials say the measures are needed to limit the unwarranted political influence of business leaders, whom they accuse of taking instructions from the U.S. Embassy, and to keep American money and intelligence operatives out of the campaign.

Opposition leaders and non-U.S. diplomats say the clampdown is the instinctive reaction of an anti-democratic regime to growing uncertainty over its ability to control the economy and win the elections next Feb. 25.

“The Sandinista government is forcing the country to a total radicalization instead of establishing democratic rules for free and just elections,” said a statement by the Superior Council of Private Enterprise condemning the expropriations.

“In the campaign, politicians are going to say they don’t like the way the Sandinistas run the country,” commented Ramiro Gurdian, vice president of the council. “Does that mean they are going to get their homes taken away, put in jail or kicked out of the country?”

The expropriations, a retaliation for anti-government speeches by the three growers, marks a sharp turnabout from the promises of February. After imposing severe monetary restrictions to curb inflation, the Sandinistas agreed to hold open elections nine months ahead of schedule and told businessmen that the practice of expropriations, a hallmark of the 10-year-old revolution, was over.

The Sandinistas expected those commitments to be matched by $250 million in emergency foreign aid, an end of the U.S. economic embargo, a disbanding of the idled but still-threatening U.S.-backed Contra army and new domestic investment.

But none of this happened. Ortega came home from Western Europe last month with less than $50 million in aid. The Bush Administration has renewed the embargo and criticized Nicaragua’s new electoral law and the five-man council that will enforce it as biased toward the Sandinistas.

In recent weeks, the austerity program has come unraveled with a burst of hyper-inflation matching the worst periods of last year, when prices rose 36,000%. This month alone, the price of an American dollar on legal exchange markets here has soared from 10,000 to 25,000 Nicaraguan cordobas, reviving the widespread hoarding, frenzied spending and black-marketeering that officials thought they had stopped.

After weathering strikes by thousands of teachers and taxi drivers belonging to nominally pro-Sandinista unions, the government now faces demands by private coffee growers, who produce the greatest share of the national income, to eliminate a 40% tax on coffee exports. Officials say the tax is needed to halt currency speculation.

‘They Are Confused’

“When you talk to the Sandinistas, they express irritation,” said an Asian diplomat. “The economic crisis is undermining their social base, and they know the solution lies in normalizing relations with the United States. But they are confused about what Bush wants them to do. They are afraid he will reject their election as a fraud and the crisis will continue for years.”

Some diplomats and politicians view the Sandinista crackdown as a strategic prelude to negotiations with the United States that will lead to new concessions. Last week Ortega asked Cardinal Miguel Obando y Bravo, the Roman Catholic archbishop here, to arrange such talks.

The cardinal responded Thursday that he could not do so, because the Bush Administration was unwilling. But Ortega said he would continue to insist.