The Shooting Is Over, but Nicaragua Is Still Polarized : Central America: More than two years after voters ousted the Sandinistas, the masses continue to suffer.

In President Violeta Barrios de Chamorro’s Nicaragua, everything has changed and nothing has changed.

Or does it just seem that way?

Toyotas outnumber Russian-made Ladas now, but they still have to steer around horse-drawn carts--about 70% of Nicaraguans live in poverty. The mayor of Managua has put up road signs to the country club and airport. But many streets remain nameless, and Managuans’ memories are still dotted with landmarks that no longer exist.

Nicaragua remains a polarized country. In the 2 1/2 years since the conservative Chamorro took office after beating Sandinista leader Daniel Ortega in a stunning election victory, Nicaraguans have ended their bitter eight-year guerrilla war and demilitarized the country. Chamorro has adopted policies of free enterprise and national reconciliation. But the country has yet to recover from war and economic ruin.

The National Opposition Union, or UNO, the coalition that supported Chamorro’s candidacy in 1989, is now her opposition. And her old nemesis, the leftist Sandinista National Liberation Front, has helped to sustain her weak government. The Sandinista-led army has backed Chamorro’s reconciliation policies, while the UNO-dominated National Assembly has shut down in a confrontation over them.

The masses, meanwhile, are fed up with the bunch.

“If Daniel rules or Violeta does, it all ends up the same for me,” said Alip Centeno, 25, a vendor selling watches and auto seat covers. “Some days I don’t earn a thing.”

Centeno was one of more than 50 vendors found at a stoplight on the highway to Masaya one recent morning, peddling everything from chewing gum and combs to spider monkeys and parrots. Among the vendors’ ranks could be found both Sandinistas and their old U.S.-supported enemies, the Contras.

“The Sandinistas and UNO can both go to hell!” shouted a monkey vendor listening to Centeno’s conversation.

While in power, the leftist Sandinistas railed against the United States for its support of the Contra insurgents, and when the U.S. Congress approved $100 million in aid to the Contras, the Sandinista regime closed Chamorro’s opposition newspaper, La Prensa. Now, Chamorro and La Prensa lash out at a Republican senator from the United States who has managed to hold up $100 million in U.S. aid to her government.

Sen. Jesse Helms (R-N.C.) issued a scathing report on the Chamorro government in August, asserting that the president is only a “titular head of state” and that all real power remains with the Sandinista Front, which he says rules through the army chief, Gen. Humberto Ortega, and Chamorro’s minister of the presidency, Antonio Lacayo, who is her son-in-law. Helms says that except for the disarming of the Contras, nothing has changed in Nicaragua under Chamorro.

Helms echoes the views of Alfredo Cesar, Lacayo’s brother-in-law and president of the National Assembly. Cesar--a former Sandinista, former Contra, former Chamorro supporter--is leading the UNO push against the president. He sees himself as a bulwark against Sandinista power, while government officials view him as an opportunist, already campaigning for the 1996 presidential election.

“Some people would like to surrender national sovereignty, and others dream that the government will become part of the office of a Republican senator in Washington, as in times past,” Chamorro said in a recent speech to the nation.

“Helms,” added Chamorro spokesman Danilo Lacayo, “doesn’t accept that Sandinistas live in this country. As far as he’s concerned, they have no rights here. But they do have a right to live here. The Somocistas (followers of ousted dictator Anastasio Somoza) killed Sandinistas, and the Sandinistas sent Somocistas into exile. This is a new era.”

The Sandinistas led an insurrection against the U.S.-supported Somoza that toppled his family dynasty in 1979. The ruling junta that replaced him included Daniel Ortega and Chamorro, but Chamorro quickly grew disillusioned with the Sandinistas and resigned.

Ortega was elected president in 1984. Many UNO members left the country during Sandinista rule and supported the Contra fighters, most of whom were peasants angry over arbitrary land confiscations and state control of the economy. Chamorro opted to oppose the Sandinistas legally, inside the country.

The Helms report charges Chamorro’s government with corruption; human rights abuses; failure to remove Sandinistas from the military, courts and bureaucracies, and delays in resolving claims on confiscated lands.

“The report is an extraordinary concoction of truth, half-truth and unsupported innuendo,” said a Western diplomat who asked not to be identified. “This is a very different country. There is freedom of speech, assembly and action. That’s a huge change that, at times, makes things very difficult for the government.”

Chamorro officials argue that Sandinistas must be eased out of the army, police and bureaucracy naturally, not forced out. The goal, they say, is to heal the country of its war wounds, and they point to the Supreme Court as an example of how to accomplish that.

The seven-member high court was all-Sandinista when Chamorro took office. The government negotiated to replace two Sandinistas and expand the bench to nine members, leaving the Sandinistas with a 5-4 majority. But the two sides have agreed that all rulings must be decided by at least six votes. And next year the majority goes to Chamorro, when at least one of the Sandinista judges is expected to step down.

Under Chamorro, not only were 22,500 Contra guerrillas demobilized, but the army also has been reduced from 60,000 troops to about 16,000.

The East German Iffa trucks, military barricades and funerals that characterized wartime Managua are gone. So are the fatigues, food-ration cards and the Sandinista Defense Committees, which organized supporters and often spied on opponents.

Helms and the UNO opposition charge that the Sandinistas have moved their old intelligence and state security networks into the military rather than disbanding them. They say the Sandinista army and police still rule the countryside, where there is little civilian government.

In an effort to free up the U.S. aid, Chamorro replaced Sandinista Police Chief Rene Vivas with another, less prominent Sandinista. Several hundred former Contras have been integrated into the 8,000-member police force, and some of them have clashed with bands of Contras who again have taken up arms against the government.

One of the biggest points of contention is the retention of Humberto Ortega, the Sandinista general, as army chief. Ortega, who is Daniel Ortega’s brother, has served as military chief for 13 years. Opponents charge that as long as he remains, the army will remain loyal to the Sandinistas.

Col. Joaquin Cuadra, Ortega’s second in command, argues that the general has reduced the size of the army quickly, without violence or rebellions, moved it away from the Sandinista party and turned it into a government institution.

“The army believes in supporting Violeta’s reconciliation policies,” Cuadra said. “If the army had said this government was imposed by the U.S., obviously that would have generated a very different political dynamic.”

But an increasing number of Nicaraguans, including pro-Sandinistas, say it is time for Ortega to go--although, they stress, not under pressure from Helms.

The Chamorro government has closed or privatized half of the 351 state enterprises that it inherited from the Sandinistas and has opened up the economy to private enterprise. Seven private banks have started up, as have a multitude of small businesses, restaurants and private schools. Customers may obtain credit from gas stations--although still no credit card.

Chamorro says she has brought triple-digit inflation to a halt and strengthened the currency with an International Monetary Fund stabilization program. As a result, however, Nicaragua may be the most expensive country in Central America, with 40% to 50% unemployment and underemployment.

Young men who were in hiding or at war during the Sandinista regime have returned home to find themselves out of work, along with tens of thousands of former government employees.

“There are no jobs,” said Roberto Morales, another of the vendors on the Masaya highway. “They say there’s no inflation anymore. Sure, but the money doesn’t buy anything. We can’t live on air.”

Under the stabilization program, subsidies for food and utilities have been eliminated. While the minimum wage runs about $100 a month, rice costs $3 for a 10-pound bag and beans about $2.50 for the same quantity. Cabbage, a common food in Nicaragua, is almost $1 a head. The middle class complains of $200 electric bills.

Prostitutes and money changers have proliferated along Managua’s main streets. Little boys sell bags of water for a few pennies or try to wash windshields at stoplights. Usually they are shooed away.

Under the Sandinistas, no one made a point of showing possession of wealth. Now real estate agents advertise homes with pools, and families leaving the airport for Miami record their journeys with video cameras.

Despite the policy changes, the investment in production that the nation needs to recuperate has not materialized. Helms and UNO members say that is because Chamorro has failed to instill confidence among property owners.

They also say the government gives in too easily to labor demands. The Sandinistas, who suppressed trade union strikes during the war, now lead them against the Chamorro government.

Chamorro spokesman Lacayo said the government has resolved about 1,400 of the claims filed for land, houses, companies and stocks expropriated by the Sandinistas.

“There is no fast or easy solution,” Lacayo said. “You have lands that were occupied, cooperatives that were never legalized. People left the country and returned to find someone else in their house who had paid for the house. You had illegal confiscations and legal ones. There is total disorder.”

Disorder is nothing new for Nicaragua. And yet there is change amid the chaos. American franchises have moved into a capital once draped in anti-Yankee banners. There is even an American pizza chain--with a difference: Although it advertises fast delivery or your money back in the United States, it will grant only a 30% discount for tardiness in Managua, since frequent electricity outages interrupt the baking.

In the Sandinistas’ Nicaragua, billboards rallied citizens with the cry of “Free Fatherland or Death.” Now television ads exhort consumers to “liberate your skin” with face cream.

The Sandinistas’ state-owned stores offered Soviet Bloc leftovers. Today, business people run well-stocked supermarket chains, including one called La Fe. That means “the faith,” which may be the commodity in shortest supply.