Whatever else one may say about the World Bank, its mantra is certainly uncomplicated: privatise, privatise, privatise. In a world of cynicism and shattered faith, it is almost reassuring to have such a powerful institution that maintains the same line for decades. But this should come as no surprise. If the World Bank was truly about poverty reduction, it might have to accept the fact that its formula has failed in country after country. If it is instead about serving large multinational corporations, it is right to brag of its success. Other than those corporations, are there any winners under this system? The answer, of course, is yes. Botswana has done well, but the reason for their success is partly because they refused to take loans from the IMF or World Bank. China's economy is also growing rapidly, at 5% a year, by doing exactly the opposite of what the IMF recommends. Cuba has been praised by the World Bank for doing the exact opposite of what the Bank recommends, and thus achieving stupendously high rates of social well-being despite its poverty.

The Cuban experience should come as no surprise. Historically, countries were far better off under socialist or welfare states. Before 1980, most countries were either socialist or had a welfare state, and were using the import substitution model, in which government investment and high tariffs encourage locally owned industries. In that period of increasing national government control and new welfare schemes (1960-80), per capita income grew 73% in Latin America and 34% in Africa.

Since 1980, under the Reagan/Thatcher model of 'free trade,' Latin American growth nearly halted (a growth of less than 6% over 20 years), and African incomes fell by 23%. From 1950 to 1980, socialist and welfare state policies added more than 10 years in life expectancy in virtually every country. Since 1985, the illiteracy rate has risen and life expectancy fallen in 15 African countries. In former Soviet states, life expectancy has fallen dramatically, adding 1.4 million a year to the death rate in Russia alone. Has the IMF failed to notice these developments? In April 2000, a review of their efforts called the 'World Outlook' report, wrote: 'In recent decades, nearly one-fifth of the world population has regressed. This is arguably one of the greatest economic failures of the 20th century.'