Nicaragua's Sandinista leaders are beginning to face some difficult choices about the direction of their revolution. As they end their fifth year in power and an accumulation of problems confront them, it becomes increasingly likely that they will be forced within the next few years either to:
* Radicalize and impose a complete dictatorship on Nicaragua.
* Open up the system politically and economically.
Until now, the Sandinista revolution has been neither the hard-line communist dictatorship depicted by some members of the Reagan administration and much of the United States news media nor the nearly totally free society described by left-wing supporters throughout the world.
It has been been, rather, a populist dictatorship, mild as dictatorships go and supported at least for its first three years or so by the clear majority of its population.
However, economic problems and subsequent food shortages have increased, and popular support for the government has fallen. These difficulties are largely due to a combination of US pressure, mismanagement of the approximately 55 percent of the economy owned by the state, and a falloff in production by a private sector fearful of further radicalization.
Popular support for the Sandinistas has been further weakened by a military draft law promulgated in the last year and by recent confrontations between the government and the strongly entrenched Roman Catholic Church.
How far support has fallen is unclear. Most longtime diplomats and other observers estimate that the Sandinista government still commands the support of between 40 and 50 percent of the population. However, if the food shortages and inflation not matched by salary raises continue, the Sandinistas might lose the minimum of popular support they need to maintain a relatively untyrannical rule and a mixed economy.
Eventually, in this analysis, the Sandinistas will have either to impose a full dictatorship and take over most of the economy, or come to terms with the US and the alienated Nicaraguan private sector and middle classes.
Some Nicaraguans do not subscribe to this analysis. They say that they have seen little change in the regime despite five years of economic deterioration. The Nicaraguan economy, they argue, is a near subsistence one, and as long as people have their tortilla and beans they will carry on. Even if popular support continues to fall, they say, the Sandinistas can continue to rule as is.
However, most Nicaraguans have already shown themselves to be quite sensitive to economic deterioration. They seem to be far less willing to endure revolutionary hardships than were the Cuban people under Castro's leadership during the difficult years of the early 1960s.
Hence it seems almost inevitable that if discontent continues to grow seriously, the Sandinistas will have to be more coersive. That, in turn, is likely to cause greater panic in the private sector. There will be less private investment and productivity, and almost certainly more nationalization. (Forty-five percent of the economy is nationalized.)
In a newly centralized economy, especially one going badly, speculation and profit-taking become endemic. When goods become scarce and government prices are artifically low, peasants and market women sell these same goods for high prices on a sort of black market. Government attempts to stop this lead to even more nationalization.
In an atmosphere of intense mutual hostility and distrust (which has prevailed in Nicaragua between the private sector and the government since the revolution), it is hard to be only halfway radical and halfway authoritarian.
The internal dynamics of the revolution, plus the natural ideological preferences of much of the Sandinista top leadership, would make radicalization the most predictable course for the revolution to take. It is not that most Sandinista leaders want to reproduce the Soviet system in Managua, but rather, that if forced to choose between complete radicalization on the one hand, and ''giving in'' to the US and the bourgeoisie on the other, their natural instincts would probably be to radicalize.
However, the problems accompanying radicalization are so great as to make it almost a suicidal course for the Sandinistas, and this greatly strengthens the hand of those top Sandinista leaders who counsel moderation.
For the past three or four years, the situation here has seemed to many Nicaraguans to be frozen, with the revolution undefined and the FSLN still a coalition between different groups wanting different things. Much of the reason for that stagnation has been that the radical thrust of the revolution (a radicalism greatly increased by the hostility of the Reagan administration) has been colliding against the hard wall of reality, a reality in which the objective conditions for radicalization simply do not exist.
Radicalization would require huge additional sums of Soviet aid. It would mean greatly expanding the government-run sector of the economy, which Nicaraguan government studies themselves recognize as horribly inefficient. It would mean a cutoff of vital aid from Mexico and the West European countries governed by Social Democratic parties. It would mean a cutoff of still important trade with the US. There are no signs that the Soviets are prepared to support such a venture, or to end up, in the long run, financing a series of bankrupt Central American countries run by a centralized system that works badly in the Soviet Union and not at all in the so-called third world.
Some Western diplomats say that if the Nicaraguans radicalize, they can blackmail the Soviets into supporting them for reasons of international socialist solidarity. The Soviets, they say, would support a radicalized Nicaragua in order to eventually trade it off against Afghanistan at a summit conference they hope eventually to have with the US, a new Yalta conference in which the world is divided into spheres of influence.
It is doubtful however, that even socialist solidarity would produce more aid than the barest minimum necessary to keep the Nicaraguan people from starving. Almost all Nicaraguans interviewed by this writer agree that radicalization would send Sandinista support plummeting to a small hard core, perhaps 20 percent of the population at most.
Radicalization would also almost certainly change the mood in the US Congress and enable the Reagan administration to support heavily the anti-Sandinista contra rebels.
Nicaragua, unlike Cuba, is not an island. If the Nicaraguan people were to turn strongly anti-Sandinista, they would have alternatives. The US-aided contras operating on Nicaragua's southern and northern borders could grow enormously and seriously threaten the regime.
Under such conditions it would be relatively easy for the US to overthrow the Sandinistas. Direct US intervention might not be necessary. The united armies of the other Central American countries could do the job for the Reagan administration.
At the very least, unless left-wing governments exist in other Central American nations, especially Honduras, radicalization does not seem to be a viable option for those Sandinista leaders who do not wish to leave Managua for armed struggle in the mountains. Few show more than a rhetorical desire to do so.
The alternative to radicalization is ''apertura,'' an opening up, a national reconciliation between the Sandinistas, the private sector, and the middle classes, and a settlement of sorts with the US. Is this possible? Given the alternatives, a majority of the Sandinista leadership might opt for it in the long run.
Next: Short-term liberalizing options