NEWS ANALYSIS : Chamorro Rules but Sandinistas Retain Power : Nicaragua: Both sides won--and lost--in recent strikes. The leftists proved they have veto power over the new regime.

When Daniel Ortega accepted his stunning defeat by Violeta Barrios de Chamorro in Nicaragua’s presidential election last February, he vowed that the Sandinistas would “govern from below.”

Since Chamorro took office April 25, Sandinista unions have twice paralyzed the country with labor strikes--proving not that Sandinistas control the government but certainly that Chamorro’s conservative coalition cannot govern without Sandinista cooperation.

Today, the Sandinistas, who led an armed insurrection against the Somoza family dictatorship, will mark the 11th anniversary of their revolution. It is their first celebration as an opposition party, and they are likely to hail the strikes as their first major opposition victories.

As Nicaragua’s biggest, most organized political party, they have consistently exerted a veto power over the fragile Chamorro government.

A 10-day walkout that ended last week, as well as a six-day civil servants’ strike in May, have kept the government on the defensive, and Chamorro’s inner circle of technocrats seem no match for the politically savvy Sandinistas.

During this month’s strike, workers and students barricaded streets and occupied buildings in Managua, shutting down government ministries, banks, the airport, state industries and travel across international borders.

The strikers made wage demands, but their primary concern was economic policy. Sandinista peasants occupied thousands of acres of private and state-owned farms to protest government plans to rent the public lands and eventually return them to their pre-revolution owners.

The government declared the strike illegal and refused to negotiate--but when faced with chaos, officials backed down. The settlement, while far less than the Sandinistas had sought, forced the government to rein in its free-market economic program.

The sale of state-owned lands and the return to private hands of the state textile industry, construction and other industries were effectively put on hold. On these and other economic policy decisions, the government agreed to consult the Sandinistas.

“It is clear that there are two powers here in Nicaragua,” Roman Catholic Cardinal Miguel Obando y Bravo declared Sunday after denouncing the strike violence, which left at least four dead and dozens wounded. “The new government and the Sandinistas--two powers.”

The Sandinistas, however, have paid a price for their rough-and-tumble tactics: The barricades and burning tires buoyed the most militant party members, but Nicaraguans weary after more than a decade of a U.S.-backed war with the Contras are generally fed up with violence. Such confrontations are not likely to increase popular support for the Sandinistas.

If they are ever to govern again, the Sandinistas must transform their leftist vanguard movement into an unarmed, social democratic party capable of winning elections and international support--and in that respect, the strike was a step backward.

“The two sides were playing a negative-sum game,” central bank President Francisco Mayorga, one of Chamorro’s economic planners, said of the strike. “It was a war in which the loser is the one who loses the most. But both sides lose.”

Chamorro, 60, remains a popular figure, diplomats and political analysts say, but her government was badly damaged by the crisis. Not only was the government unable to maintain public order for several days, but officials were absent from the public eye. State television installations were occupied by strikers; Chamorro’s newspaper, La Prensa, did not publish, while the Sandinista daily, Barricada, and the pro-Sandinista Nuevo Diario did.

“The government didn’t exist for three days,” one European diplomat said.

Into that vacuum stepped ultra-conservative Vice President Virgilio Godoy, who announced the formation of a National Salvation Committee, challenging Chamorro’s authority and handling of the crisis.

The strike settlement prompted more criticism from the right wing of Chamorro’s coalition, the National Opposition Union (UNO).

Gilberto Cuadra, president of the Superior Council of Private Enterprise (COSEP), accused Chamorro of making “secret deals” with the Sandinistas and of abandoning her election commitment to a free-market economy.

“She has left behind her natural bases,” Cuadra said in an interview. “She negotiated when she said she wouldn’t. She lost lots of credibility.”

Besides underscoring strains between Chamorro on the one side and COSEP and some right-wing parties in the UNO coalition on the other, the strike also produced widespread rumors of tensions within her Cabinet. But Mayorga, the central bank president, denied reports that he was unhappy with the strike agreement.

“COSEP has a right to pressure for rapid privatization, and I sympathize with that point of view,” he said. “But the government has to accommodate the process to the national political (situation).”

Despite the agreement, he insisted, sooner or later, the government will go forward with privatization.

“There is a debate within the government about what is going to be privatized, when and how. But everything is subject to privatization under the program for which the people voted. Some things will be returned to their (prior) owners, some will be sold to workers and others will be sold to private investors,” he said.

Mayorga estimated the strike cost $24 million in lost production, plus damages to the streets of Managua, where cobblestones were taken up to build barricades.

Chamorro’s government had planned to privatize all state farms except those that once belonged to the Somoza family and its cronies.

The Sandinistas want the lands and industries to remain in state hands, not only for ideological reasons but also for self-interest: Along with the army, the peasant and public-sector unions form their strongest base of support.

Officials of Chamorro’s government note that the strike agreement was negotiated by Ortega, the former president, and other Sandinistas, rather than by peasant and union leaders. They call the strike political “sabotage” rather than a labor dispute.

Sandinista officials, however, say they were intermediaries between the government and their radical base. The party’s National Directorate supported the strike but did not initiate it, they say.

Nonetheless, the Sandinistas were trying to capitalize on economic discontent during the walkout. The new government had raised expectations with promises of private investment and Mayorga’s early claim that he would halt inflation within 100 days.

Inflation has continued to skyrocket, however. The cordoba, Nicaragua’s national currency, has been devalued from about 70,000 to the dollar in April to more than 420,000 today. Strike leaders sought a guaranteed minimum wage pegged to the dollar.

Meanwhile, neither the Sandinistas nor the government expected the violence, said one political analyst, Xabier Gorostiaga. He said a major concern for the Sandinista leadership was to prevent a confrontation between the Sandinista-led army and the unions.

In fact, the armed forces, which received high marks for restraint, may have won the most from the strike. No soldiers or police were killed, nor did they kill anyone, diplomats and other officials noted.

“The army played it well,” a European diplomat said. “They were smart. You didn’t see them in the street until the moment (Chamorro) called them in. They were careful to respect what was happening (the strike), but no one could say they were acting illegally.”

BACKGROUND

After their revolution in 1979, the Sandinistas confiscated all the holdings of the ousted Somoza family and the plantations of many other wealthy landowners. Later, they sometimes confiscated the holdings of their political enemies. They gave land to about half the peasants in Nicaragua under a national agrarian reform program, and most were organized into cooperatives covering about 20% of all farmland. The state kept plantations totaling about 13% of the land, and these are managed with the participation of Sandinista unions.