Nicaragua Will Ask U.S. for $302 Million : Central America: Chamorro’s adviser seeks help to jump-start a war-battered economy.

This country will seek $302 million in cash from the United States to revive food production and jump-start its war-battered economy in the first year of Violeta Barrios de Chamorro’s post-revolutionary government, her chief economic adviser said Friday.

Francisco Mayorga, a free-market advocate who will manage the economy when Chamorro becomes president April 25, is traveling to Washington today to press for an early aid commitment so that the cotton and grain crops planted in May can be expanded. He is to meet with Bush Administration officials next week.

The full extent of Nicaragua’s poverty is shrouded in official secrecy and will not be fully known until the Sandinistas, who ruled for a decade until Chamorro’s stunning electoral victory last Sunday, turn over the files of a swollen state bureaucracy.

By that time, Nicaragua “might need far in excess of $300 million,” Mayorga said, so he is asking that much as a “generous initial commitment” from Washington in the hope that other industrial nations will meet any needs beyond it.

The aid request underscores expectations among Nicaraguans that the Chamorro government will rescue one of Latin America’s poorest countries with American aid. Viewed as a friend of the United States, the 60-year-old newspaper publisher was elected on a wave of voter discontent with the Sandinistas’ economic management.

“We are hoping that the United States will assume its role as the leader of democracy in the world and be the first to make a strong commitment to rebuilding this country,” Mayorga told a group of foreign journalists Friday. “We know George Bush is a friend of Nicaragua.”

The requested cash aid does not include the $600 million in credits that Mayorga said Nicaragua needs to bridge its trade deficit this year. That level of credits through 1992, he estimated, will sustain an annual growth rate of 10% and “put the country on its feet in three years.”

“We will become a showcase of what a market economy can do, how a society moves from war into peace and becomes prosperous thanks to democracy,” Mayorga said. “The need for foreign assistance should diminish sharply in the start of the fourth year” of Chamorro’s six-year term, he added.

White House Press Secretary Marlin Fitzwater promised this week that U.S. assistance would be “significant and meaningful.” But independent economists say the demands for American aid from Europe and the absence of specially earmarked funds for Nicaragua in Washington make Mayorga’s request seem too optimistic.

“If he could get $40 million by screaming, he would be lucky,” said an economist with a multilateral lending agency here. “But if he’s willing to make some tough decisions right away, he could do a lot with that amount of money.”

Nicaragua’s agrarian-based economy has shrunk for six years in a row. Urban wages have fallen to an estimated 10% of their value when the Sandinista guerrillas took over in 1979 and started building a large army and a centralized economy. Inflation reached 33,600% in 1988 before the government cut it to about 1,600% last year by laying off thousands of state workers. About a third of the work force is now unemployed.

Chamorro’s 14-party National Opposition Union (UNO) has adopted a plan of government based on free-market principles and enjoys the backing of Nicaragua’s business community. It plans to transfer idle farmland and other under-used properties from state to private hands and slash defense spending. While preserving the constitutionally protected state monopolies on banking and foreign trade, it would license private businessmen to take over some of those activities.

Mayorga, a diminutive 41-year-old economics professor with owlish eyeglasses and a thin black mustache, has emerged in recent years as the most articulate critic of the Sandinista economic record. Having served as an economist in the Central Bank during the first two years of Sandinista rule, before going to Yale to get his doctorate, he is expected to run the economy as head of the bank.

One of his first steps will be to print a new currency, the “gold cordoba,” at parity with the dollar, to replace the cordoba, which is now worth 70,000 to the dollar. It will be introduced gradually, he said, paid to farmers and exporters at first to boost confidence among key producers.

Two problems that beset the economy under Sandinista rule--the U.S.-backed Contra insurgency and the U.S. trade embargo--are likely to disappear as soon as Chamorro takes office. But Sandinista labor leaders have served notice that her government will have other difficulties. They have already demanded an immediate wage increase from the Chamorro government. “UNO has raised tremendous expectations that it will create economic growth and stability,” said Mario Arana, an independent Nicaraguan economist. “If it does not, there will be popular discontent and the Sandinista Front will lead the discontent. It could be an explosive situation.”

According to Mayorga, the new government’s most immediate problem will be finding quick cash to finance a shift of farmers to uncultivated state-owned land before the rainy season starts in May.

Mayorga said the government plans to lease about 250,000 acres of such land in the first year to anyone claiming former ownership or willing to plant immediately. The courts, meanwhile, will have a year to settle ownership claims.

Chamorro’s advisers are counting on a boost of agricultural production to lead Nicaragua out of recession. Instead of fighting inflation with a “shock” reduction of consumer demand, by laying off more state workers as the Sandinistas have done, Mayorga promises what he calls a “supply shock.”

Other portions of the sought-after U.S. aid would go to repay Nicaragua’s $200-million debts to the World Bank and Inter-American Development Bank so that those agencies could resume lending to Nicaragua to rebuild roads, bridges and water supply systems. Such cooperation has been blocked by the trade embargo since 1985.

Even a relatively small pledge of U.S. aid is expected to open up lines of assistance from such nations as Japan, Britain and France that were reluctant to defy Washington by aiding the Sandinistas.

The Soviet Union, Nicaragua’s major donor under Sandinista rule, has expressed a willingness to continue its aid--$333 million a year. Moscow supplies most of Nicaragua’s petroleum.