Like many other leftist governments in recent years - including the Soviet Union itself - the Sandinistas of Nicaragua are discovering that Marxist-style economics only lead to financial disaster.
President Daniel Ortega confessed in a public speech last week that Nicaragua's economy is in a mess. There is a deep recession, inflation that reached a staggering 20,000 percent last year, shortages of goods - Nicaragua once exported rice and beans and now must import them - and the government has admittedly lost the trust of workers and private producers.To prevent total collapse of the economy, Ortega said he would cut government spending by half; lay off 35,000 workers, including 23,000 from the army; urge laborers who live in cities to move to the country in search of employment; and reduce subsidies for basic goods.
In addition to the austerity program, Ortega promised that the Sandinistas would no longer confiscate private property, and that the economy would be a mixture of capitalism and socialism.
If that sounds like Ortega is desperate, he is. The Soviet Union has been propping up the Sandinistas with $500 million in aid each year, but Soviet leader Mikhail Gorbachev has his own economic problems. According to intelligence reports, Gorbachev has told Ortega not to count on the Soviet Union to pay his bills.
Apparently, Ortega is preparing a peace plan to present to President Bush, promising to adopt some democratic reforms if the U.S. will take a softer line toward Nicaragua and perhaps lift economic embargoes. In the long run, he may hope to get U.S. aid, if not directly, then at least through sharing in regional grants.
The U.S.-supported Contras were not able to prevail against the Sandinistas, partly because of Congress' on-again, off-again support. But as others are learning, outside foes are less a threat to Marxism than the system itself. In an economic sense, Marxism is its own worst enemy, and Nicaragua is the latest Exhibit A.