International Aid: Workmates for the Third World: Through finance and management skills, the Commonwealth Development Corporation is helping 50 countries to generate wealth

Don't give them a fish: help them to buy a rod, then a boat, and they will become entrepreneurs.

FOR 46 years this has been the guiding philosophy of the Commonwealth Development Corporation. Drawing largely on British money, skills and expertise, the corporation is a catalyst for investment and growth in less developed countries - starting some enterprises, expanding others: from oranges to oil palms, hotels to housing, tourism to telecommunications.

In 1948 the Colonial Development Corporation was established as a statutory body; in 1963 'Colonial' became 'Commonwealth'. Today, its remit has widened to include non- Commonwealth territories - it is at work on 240 projects in around 50 developing countries.

Each country where the corporation operates must be politically stable and have an appropriate level of gross domestic product per head. Exploratory surveys are progressing in Vietnam, Guatemala is another probability, and there are hopes of moving into southern Africa.

Enterprises must be financially viable and environmentally and socially sound. Investments, in the form of loans or a slice of equity, are funded by the corporation's own resources - repayments, interest, profits - plus long-term, low-interest loans received from the aid programme through the Overseas Development Administration (ODA), its parent body.

The corporation also runs its own companies, or managed projects. Most, though not all, are in agriculture. Current investments exceed pounds 1.4bn and substantial sums are added each year. Apart from utilities, it operates mainly in the private sector. This is expected to grow in importance as public involvement decreases in areas such as electricity. Privatisation is another field of activity.

In 1985, when John Eccles took over as chief executive, 40 per cent of the corporation's business was in the private sector. This has increased to 85 per cent. 'We've been able to generate successful business, using revolving funds to stimulate economic growth,' says Mr Eccles, who leaves the corporation in April. 'When I started, we were investing pounds 67m. In 1993 it was pounds 220m.'

Graham Poole, the portfolio group manager, is responsible for half its financial operations. This week, at the office in Pimlico, London, he is working on several enterprise support schemes. One is to develop an 'across the counter' stock exchange for an electricity company in the Caribbean.

He is also considering how to price and structure a share option scheme for senior employees of a Costa Rican aquaculture enterprise, and advising an electricity project in St Lucia on how to limit its exposure to foreign exchange movements. Mr Poole, a Fellow of the Institute of Chartered Accountants, also deals with problems reported by the corporation's 18 overseas representatives.

These may be similar to British business problems, but tend to be more pronounced: 'If a company is in tea only, and tea prices collapse, it urgently needs help.' A particularly successful, large venture is Sarawak Oil Palms Bhd. This consists of 24,500 acres (9,900 hectares) of palm. The corporation started it in 1968, originally with the state government.

In 1991 the company was listed on the Kuala Lumpur stock exchange and a quarter of its shares were sold to 14,000 individuals. The corporation then reduced its holding from 64 per cent to 45 per cent, reinvesting the freed funds in new business.

A small venture that has done well is a Malawi seed farm and processing operation, which it was invited to set up with a Malawi government agency. Mr Poole began his career in Malawi as financial controller. Local people were trained in management techniques and this helped pave the way for a US corporation to invest in the business, buying part of the corporation's shares.

International investors, he says, are attracted to Africa; the corporation acts as a catalyst.

Mr Poole then took financial control of an Indonesian cocoa estate, where there was little economic activity, and he was later seconded as operations adviser to a Caribbean development finance institution. Many CDC countries have such a body. Each operates like a mini- CDC, backing smaller projects.

Mr Poole's final overseas job took him back to Malawi as a representative, looking for new business and monitoring investments.

As well as generating wealth and being internationally competitive, the corporation's activity enhances life in less developed countries. Jobs have been provided for about 350,000 local people in those areas where it has a financial stake. In addition about 45,000, excluding seasonal workers, are employed on 30 managed projects in 20 countries. Management staff are trained in modern skills and financial decision-making.

Donald McCallum, a mechanical engineer, and Harry Percy, a zoologist with a diploma in managing pest control, are associate directors of managed projects. Mr McCallum cites the diverse range of these companies: from rubber, sugar, tea and cocoa to an electricity- generating system in Tanzania that will replace fuel oil with a waste-wood product.

Managed companies include an oil palm plantation in the Solomon Islands with its own CDC-installed factory; an innovative timber scheme, also in the Solomons, to reduce logging of the virgin forest; and in Papua New Guinea, oil palm estates with processing units.

Mr McCallum is hoping that more British businesses will work with the corporation. This would be to their mutual benefit and fill a gap in funding. He says: 'We would like more to join us and contribute technological and management expertise, while we provide background knowledge.'

Mr Eccles, who would like more backing from the ODA, sums up the corporation's ethos: 'We are business partners to people in the developing world, providing employment and building exports. More good things are happening there than we might have expected eight or 10 years ago.'

He cites the Pacific rim, Latin America, Malaysia and many parts of Africa, notably Ghana.

'The public perception is that if you invest taxpayers' money in darkest Africa, you will lose it,' he says. 'This is not true. We have been able to build good relations and development through our local partnerships.'

(Photograph omitted)