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[1] A counterpart fund is a technique for turning foreign aid into reserves of domestic currency. They were used by the UNRRA, and the Marshall Plan in the rebuilding of Western Europe after the Second World War, and today remain a common technique for delivering developmental assistance.

One method of setting up a counterpart fund is to have businesses in the country receiving aid that want to import a commodity place an order with their government and pays for the import in their local currency. The government then uses some of their foreign assistance, still in the foreign currency, to pay for the goods. This makes importing far easier as the unstable currencies in developing nations are often of little international value. Agreements are also usually signed so that these imports can only come from the nation that gave the aid, benefiting the donor's export industry. Another method is for goods to be donated to a developing nation's government and for them to then sell the goods to the population, and use the proceeds to set up a fund.

The recipient government is also then left with the original payment in its domestic currency. These payments are amalgamated into a fund that is used to further fund development. This can take the form of investments in infrastructure or industry, paying down the debt or deficit, or stabilizing the currency. The investment of these funds can take the form of loans rather than grants, creating a permanent pool of investment capital. For instance, Germany's Marshall Plan counterpart funds were used to set up such an investment fund, and it is still in operation today.

References[edit]

  1. ^ Greg Behrman, The Marshal Plan, Aurum Press Ltd., 2008, pp. 178,179,232.

Original courtesy of Wikipedia: http://en.wikipedia.org/wiki/Counterpart_fund — Please support Wikipedia.
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256 news items

 
Bohol News Today
Mon, 16 Feb 2015 16:33:45 -0800

... hometown that prompted her to provided fund with counterpart of the barangays concerned for the acquisition of a multi-cab units. She said she allotted a total of Php100,000 for each barangay with their respective counterpart fund for the said ...

spyghana.com

spyghana.com
Sun, 08 Feb 2015 06:48:45 -0800

“The state government has paid its counterpart fund for the completion of the dam but the Federal Government is yet to release its own for the commencement of work on the site.'' He said that the dam, when completed, would assist in tackling the ...
 
Visayan Daily Star (press release)
Tue, 24 Feb 2015 20:18:45 -0800

Sagarbarria said the Department of Social Welfare and Development in Cebu has confirmed that their counterpart fund of P25 million for the construction of an initial 371 houses under a 70-40 sharing scheme with NHA is ready. NHA's counterpart is P40 ...

Leadership Newspapers

Daily Trust
Fri, 30 Jan 2015 01:37:18 -0800

Addressing a rally in Jalingo yesterday, he promised to develop the Mambilla Plateau and make it a tourist site if re-elected, adding that $1 billion counterpart fund had been released for the building of the Mambilla hydropower project. Jonathan said ...
 
The Tide
Sun, 08 Feb 2015 22:22:30 -0800

“Cross River Government is to provide counterpart fund of N337 million for the replication of the programme in Akamkpa, Obudu and Ogoja Local Government Areas. “We are calling on them to bring their contribution to enable us implement this programme to ...
 
Minda News
Sun, 22 Feb 2015 02:52:30 -0800

DAVAO CITY (MindaNews/22 Feb) — The Department of Public Works and Highways will undertake the construction of the 20-hectare Davao City Sports Complex at the University of the Philippines Mindanao in Mintal, a House official said. Davao City 3rd ...
 
Sun.Star
Thu, 29 Jan 2015 06:48:45 -0800

Unlike Daanbantayan, dela Fuente got the authorization of the municipal council to apply for a loan in Land Bank of the Philippines for the town's counterpart fund. He said the loan is payable in 12 years. Mayor Ricky Ramirez of Medellin said the town ...

Leadership Newspapers

Leadership Newspapers
Sun, 22 Feb 2015 00:26:15 -0800

She commended the state governor, Jonah Jang, for ensuring that the MDGs office is properly funded in the area of regular payment of counterpart fund, adding that over the years, the present administration has opened up opportunities for women to excel ...
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