Bush Pledges Help on Nicaragua’s Debts : Economic aid: He also tells President Chamorro that he will assist Managua with international financial institutions.

President Bush pledged Wednesday to help Nicaragua meet its overdue loan payments and establish normal economic relations with international financial institutions.

“One way or another, we will do it,” Bush told Nicaraguan President Violeta Barrios de Chamorro during a White House meeting.

She responded: “I will sleep better tonight because of that commitment.”

The United States will make a “sizable contribution” of at least $50 million--as part of $537 million already pledged to Nicaragua--to help the Central American nation meet overdue loan payments, according to Bernard Aronson, assistant secretary of state for Inter-American affairs, who recounted the conversation between Bush and Chamorro. Nicaragua has overdue loan payments of $365 million on an outstanding debt of $9.5 billion.

The public elements of Chamorro’s state visit to Washington have been marked by flowery praise for the budding democracy taking root in her impoverished country 14 months after the electorate threw out the Sandinista government of Daniel Ortega. But the private meetings have been devoted to discussions about Nicaragua’s economic difficulties.

Chamorro, on the first visit to the United States by a Nicaraguan president in 52 years, raised the subject of Nicaragua’s dire financial straits during a speech Tuesday to a joint session of Congress and again with Bush.

According to Aronson, she told Bush that “the most critical and most difficult issue facing Nicaragua today” is its overdue debt to the World Bank and the International Development Bank.

Bush said that he already has raised the issue of Nicaragua’s debt with Japanese Prime Minister Toshiki Kaifu in an attempt to seek additional assistance for Nicaragua.

Aronson also reported Chamorro as saying that an undisclosed number of Nicaraguans had been put in jail for sending weapons to leftist rebels trying to overthrow the government of El Salvador. Before the Sandinista government was voted out of office, it had been a major supplier of arms to the Salvadoran guerrillas.

The Nicaraguan president was also said by the State Department official to have reduced the armed forces by 60%, to have ended the draft and to have cut the military budget by 60%.

“The power and personnel and fighting ability of the army is drastically reduced,” Aronson said. Under the Sandinistas, it had been the most powerful force in the region.

During a welcoming ceremony on the White House South Lawn, Bush recalled last year’s inauguration at which Chamorro replaced Ortega and brought to an end more than a decade of Marxist rule.

“On that inauguration day, we saw Dona Violeta, candidate of compassion, become President Chamorro, leader of reconciliation,” Bush said. “You’ve begun to bring life and dreams back to your people.”