Third World needs food, not shopping malls

As global food shortages devastate some of the world's poorest countries, a British government-owned international development fund set up 60 years ago this month stands accused of deserting them.

CDC, formerly the Commonwealth Development Corporation, was established by Clement Attlee's post-war government in the same year as the National Health Service and in the same spirit of social regeneration. But it passes its landmark anniversary disfigured by 11 years of transformation under New Labour ­ for which the world's poor are paying the price.

Originally formed to "undertake individual productive projects likely to increase the wealth of the colonies themselves", CDC soon established a reputation as an effective developer of businesses which, in awkward parts of the world and not spectacularly

profitable, would have struggled to attract private investors.

Projects as diverse as irrigation in Swaziland, mining in Kenya and fish drying in East Africa benefited as a result and by its golden anniversary in 1998 CDC could boast over 400 projects in 50 different countries, with 40 per cent of investment in the crucial area of agriculture.

New Labour arrived with new priorities, however: in particular to expand the fund without pouring any more taxpayers' cash into it. And that meant earmarking CDC as its first partial privatisation. International Development Secretary Clare Short soon brought in a new chief executive in the shape of Goldman Sachs banker Alan Gillespie with the brief to prepare the fund for a sell-off.

Gillespie noticed what any banker would: the fund's worthy rural projects could only ever generate single-digit returns when any private buyer of the fund would want 25 per cent. Despite objections from development specialists and even the Tory opposition, Gillespie pushed through radical changes. "It was with considerable reluctance that the