NASSAU, Bahamas — Secretary of State Colin L. Powell engaged in tough-love diplomacy Thursday with the island nations of the Caribbean, resisting appeals to free up $200 million in financial aid for the troubled government of Haiti.
The funds are being withheld by the Inter-American Development Bank because of concerns about electoral irregularities and human rights abuses under the government of Haitian President Jean-Bertrand Aristide.
"There is a political crisis in the country that must be dealt with before the international community will have confidence that money given to Haiti through the government will be appropriately spent," Powell said after a closed meeting with Caribbean foreign ministers. "In the absence of a solid political system, there is good reason to have a lack of confidence."
Powell told the Caribbean ministers that the Bush administration won't use its influence to help Haiti obtain the $200 million.
The issue is a sensitive one. Haiti's political instability and endemic poverty are creating problems for nearby island nations such as the Bahamas, a frequent landing point for Haitian refugees who flee the country in makeshift vessels.
Powell's refusal to budge disappointed the ministers of the Caribbean Community regional group, or Caricom, which adopted a resolution earlier in the week urging the United States to end the funding impasse.
In addition to withheld development bank aid and loans, Europe has withdrawn $45 million in promised assistance. The United States is channeling about $65 million in annual aid through nongovernmental organizations not controlled by Aristide.
"The release of the funds would assist in rebuilding democracy in Haiti," said Guyanese Foreign Minister Samuel Insanally. "Not doing this could lead to a deterioration in the situation. The U.S. assistance is needed particularly with the independent financial institutions."
The funding deadlock arose after disputed parliamentary elections in May 2000 in which Aristide increased his political grip on the Haitian Senate. The United States and other countries pressured Aristide's government to address the alleged voting irregularities. In late 2000, the outgoing Clinton administration presented Aristide's government with a list of eight issues standing in the way of more international aid for the impoverished nation of 8 million.
U.S. officials said too little progress has been made to justify releasing the previously promised assistance.
"We stand ready to assist," Powell told reporters. "We want to see this matter resolved. As soon as it is resolved, there will be opportunities for additional aid for the Haitian people."
Haiti was not the only source of friction between the Caribbean leaders and Powell. Caricom ministers expressed concern that their need for more economic development assistance has been subordinated to U.S. demands for tighter security and enhanced surveillance in the aftermath of the Sept. 11 terrorist attacks.
"We are hoping that we would not through this process divert development efforts to security efforts," Caricom Secretary-General Edwin Carrington of Trinidad and Tobago said in an interview. "That is only going to breed more poverty, more hopelessness, more instability and more insecurity."
The economies of several Caribbean nations have been hard hit by the aftereffects of Sept. 11. Nearly 60% of the Bahamas' gross domestic product, for example, is derived from tourism, which has fallen sharply. The second-biggest sector is offshore banking and financial services, now subjected to new restrictions designed to curtail illicit money flows.
The ministers pressed Powell to increase the administration's financial commitment to a "Third Border Initiative" launched last year by President Bush. The initiative provided $20 million for HIV-AIDS programs in the region, helped airports modernize safety and security, assisted governments with natural disaster programs, established a teacher training center in Jamaica and created a $1-million scholarship fund for Caribbean students.
Insanally, the Guyanese minister, commended the administration for committing itself to the initiative but said the funding "seems like a relatively limited amount" for projects that address only some problems.
"I think it has to be considerably increased, maybe doubled, to really meet our needs," he said. "The needs are urgent."
On that and other issues, Powell made no specific promises or concessions, the Caribbean officials said.
The talks also addressed the need for more aggressive efforts to combat narcotics trafficking and money laundering, Powell said.
"Increasingly, narco-activities get mixed up with terrorist activities and can provide a source of funding for terrorist activities," he said in a radio interview. "Both of them are condemnable. We have to fight both of them, and there are linkages between the two."
Powell, whose forebears emigrated to the United States from Jamaica, devoted a portion of his short trip to a meeting with young men and women residing at two rehabilitation centers in Nassau, the Bahamian capital. Employees at the U.S. Embassy in the Bahamas recently began mentoring the residents, ages 10 through 16, in such areas as literacy tutoring, physical education, computer use, carpentry skills and anger management.
At their ages, Powell told the youths, he was not an exemplary student and had no clear vision of where he was headed in life. Even though he now occupies one of the highest positions in government, he said, he still faces his fair share of failure.
"Something goes wrong every day of my life," he said.