The ruling Sandinistas, after months of harassing and punishing their critics, are now looking for domestic detente. They are toning down some of their rhetoric, talking more with their opponents and wooing with special fervor the nation's often embattled businessmen.
In the last few weeks, the Sandinistas have devised a series of financial initiatives designed to reconcile their Marxist-oriented government with the business sector that still dominates the economy.
Sandinista leaders say they want peace with their opponents here as a matter of principle and also partly because they need unity in the face of mounting American hostility. "To defend the nation against any aggression, it is a thousand times better to have the nation united. We are all Nicaraguans, COSEP the Superior Council of Private Enterprise , the Sandinistas, the political parties. All of us," said Sergio Ramirez, member of the government's three-man executive junta.
Business leaders recognize the need for a truce, if grudgingly. "I believe it when they say they don't want to hurt the private sector," said William Baez, executive director of COSEP. "But it's not because of their ideology, it's because they don't want to hurt the country."
And both sides are aware that this may be the last chance for their stormy, unique relationship to go on.
"If this works, then the mixed economy is a reality here, which is what we want," said Sandinista-appointed Central Bank President Alfredo Cesar. But Cesar, widely considered a moderate, cautioned, "I don't have anything more up my sleeve to give to the private sector. I've given them credit, foreign exchange, restructured their debt on really good terms and now I'm giving them more cordobas to the dollar.
"I expect this year that one of two things is going to happen. Either we get an upturn--or we don't get it because of 'extra-economic' measures. If that happens I don't think there's anything more I can do. Then you've got real problems. If you've got two-thirds of the production in private hands, what do you do? Using the productive sector of the economy to press for political things is something the government simply cannot let them do," said Cesar.
Dairyman Baez sums up the concrete aspects of the Sandinista initiative as "very positive" even if the general tone remains "produce, produce, but stay out of politics."
Enrique Dreyfus, president of COSEP, makes a careful distinction between politics, which he sees as the route of those who want to take power, and policy, which he suggests is something that can and should be influenced by interested groups, including the private sector.
With the government's already extensive power over raw materials, dollars and the economic infrastructure, "a businessman would be crazy to get involved in politics, but we're very much involved in policy," said Dreyfus. "Our objective is to influence government and not confront government."
The distinction was lost on the government last October after a state of emergency was declared and Dreyfus along with three other COSEP leaders were jailed for an open letter critical of some inflammatory rhetoric by Sandinista leaders.
The businessmen were released last month. Even before they were let out of jail, the COSEP leaders were being treated as special cases. At one point they had a board of directors' meeting behind bars, with 15 members coming briefly to join the three inside.
The seesawing relations between Nicaragua's businessmen and the Sandinista leaders date back to before the 1979 insurrection against dictator Anastasio Somoza, when the Sandinistas, who had been carrying on an unsuccessful armed fight for power for almost two decades, were finally joined by virtually all segments of society in the effort to oust the 43-year-old dynasty.
When the smoke cleared after the victory, the Sandinistas had all the power that grows from the barrels of guns and from being the "vanguard" of a popular insurrection. But the private sector--a heterogeneous group that can count everyone from cabdrivers to industrialists in its ranks--still had 60 percent of the gross national product and more than three-fourths of the capacity to generate vital foreign exchange.
At the end of the war, according to Cesar, foreign exchange reserves had bottomed out at $3.5 million.
The Sandinistas, with Marxist and in some cases Soviet-Cuban leanings, reportedly were advised even by Cuban President Fidel Castro against putting their faith in the Soviet Bloc for major aid, and against severing economic ties with the West.
The Sandinistas set about looking for some alternative system that would orient the economy toward Nicaragua's impoverished majority. It would be built on "the logic of the poor," as Jesuit priest Xavier Gorostiaga of the Planning Ministry described it in a speech last fall.
The basic idea was and is to limit the accumulation of capital while providing greatly enhanced social welfare, educational and health services and building a new Army from scratch that is larger than any other in Central America.
Although Nicaragua's businessmen describe themselves as progressive in comparison with their counterparts elsewhere in the region, they are also confronted with a situation in which the basic justification for most private enterprise--the making of wealth--is being fundamentally questioned by the government.
The current move toward detente appears to grow out of necessity as much as desire and has, in effect, sidestepped that basic paradox.
Nicaragua's economy needs about $1 billion in foreign exchange each year just to keep going at a slightly better than subsistence level. The private sector produces almost half that. The rest, in 1980-81, was made up by foreign aid and loans.
This year, given the world economic situation, the cutoff of U.S. aid and Washington's attempts to cut off loans from the World Bank and the Inter-American Development Bank, plus declining support from Europe, no one here expects foreign aid to make up the gap.
Basically the brunt is going to fall on the private businessmen, and since attempts to coerce them have failed to increase production, it appears that members of the government inclined to more moderate appeals are being given a try.
As a result of the government's new incentives, the businessmen complain less about financial policy, which is now basically conservative and as they see it basically beneficial, and more about mood, about "the climate for investment," which still does not exist.
"What are you going to do," one businessman asked, "when every time you watch the television you see businessmen who left the country called vendepatrias"--literally, country sellers--"and those that stayed are called exploiters, and we're all called bourgeois?"
Businessmen also are asking, as they have for the last two years, that the government be more consistent in the laws it makes and the way it applies them on such questions as capital flight and the expropriation of property.
But if there is one unequivocal point of agreement between the businessmen and the Sandinistas, it is that the cutoff of U.S. aid was a disaster.
"If Reagan's policy is to moderate the Sandinistas, he's wrong," said one of Managua's more conservative entrepreneurs. "He's only helping to liquidate the private sector."
Baez said, "Some people in the State Department think that Nicaragua is a communist country. We think the Nicaraguan people haven't decided yet . . . . We're still here. The last chapter has not been written. Nicaragua is not lost."