One of the most exciting/controversial/foolhardy initiatives launched by the new Labour government (specifically, by Clare Short's DfID) is the plan to privatise CDC - the UK's well-respected aid agency, which has just celebrated a half-century in the public sector. Not even Mrs Thatcher's Tories dared go this far - indeed, they didn't even dare change the way CDC has been funded so as to let it raise money in the markets.

If it works the pressure on the World Bank's International Finance Corporation to do the same will be intense. (Ditto the EBRD and the private sector arms of all the regional banks.) But how can one possibly boost CDC's investment returns from its historical 6-8% to the 20% or more that the hard-hearted fund managers will demand? Can it be done? And, if it can be done, is the government's approach the most sensible?