THE QUEST FOR NORIEGA : U.S. Frees $70 Million for Panama : Assets: Funds blocked during the Noriega dictatorship are released to the new government.

The Bush Administration, pledging help to restore Panama’s ravaged economy, turned over to the U.S.-backed regime of President Guillermo Endara $70 million in government funds that had been frozen during the dictatorship of Manuel A. Noriega, the State Department announced Tuesday.

Department spokesman Richard Boucher said the Administration soon will take additional steps, including restoration of another $300 million in blocked assets, to repair the damage to the economy caused by the two-week-old American invasion and more than two years of U.S. economic sanctions.

“We are making the frozen Panamanian assets available to the new government of Panama in an orderly manner,” Boucher said. “Some $70 million in blocked funds was transferred back to the Endara government over the weekend.”

He said the government is working to restore Panama’s access to programs of the U.S. Agriculture Department, the Export-Import Bank and the Overseas Private Investment Corp. He added that the United States will resume buying sugar from Panama and restore Panama’s status as a favored trading partner.

Boucher said a delegation headed by Deputy Secretary of State Lawrence S. Eagleburger and Deputy Treasury Secretary John Robson will meet today with Endara and other top Panamanian officials to determine that nation’s economic needs.

He said the delegation will determine the level and the nature of a new U.S. aid program intended “to restore democratic institutions and processes and to promote sustained private-sector-led growth,” Boucher said.

Although other officials said that Eagleburger has been deeply involved in negotiations to bring Noriega to the United States for trial on drug-trafficking charges, Boucher said the focus of the delegation will be on economic matters.

“The purpose of their visit is to learn firsthand from the Panamanian leadership about their plans for economic recovery and to make recommendations to President Bush on ways in which the United States can be of assistance to Panamanian recovery efforts,” Boucher said.

He said Eagleburger and Robson will return to Washington late today but that other members of their delegation will remain in Panama for at least a week to continue to study the nation’s economic requirements.

Endara, apparent winner of last year’s Panamanian election before it was nullified by Noriega, was installed as chief of state after the U.S. invasion. Although the Panamanian election commission certified Endara’s victory last week, only about 10 nations have joined the United States in recognizing his government.