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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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28 news items

 
The Guardian Nigeria
Thu, 14 Aug 2014 09:26:51 -0700

He highlighted the operational challenges to included irregular task force meetings at state and LGA levels, non or late release of state and LGA counterpart fund, non provision of pluses, non funding of health camps, poor attendance of LGA chairmen at ...
 
Daily Observer
Thu, 21 Aug 2014 03:18:45 -0700

“The project shall be funded approximately to a tune of 96.16% by the technical and financial partners and 3.84% by OMVG member states rather than a counterpart fund of 105 of total project cost as previously requested by donors,” the OMVG agriculture ...
 
AllAfrica.com
Sun, 17 Aug 2014 16:03:45 -0700

Indeed, they were built under the Amosun government because he was the one that offset the counterpart fund for 2008 and 2009, indeed up to 2011, which made the construction of such classrooms possible. Yes, we must play politics but let's weigh the ...
 
The Guardian
Mon, 11 Aug 2014 07:37:30 -0700

Umuahia — SINCE the death of the premier of the defunct eastern region of Nigeria Dr. Michael Okpara, who hailed from present Abia State, subsequent state governments that comprised the then eastern region have been grappling with returning ...
 
THISDAY Live
Sat, 02 Aug 2014 18:29:35 -0700

He said Osun State government would provide counterpart fund so as to increase the number of beneficiaries to 400,000, adding that the state government would provide bank guarantee for the cooperative societies in the state to enable them access the ...
 
AllAfrica.com
Sun, 27 Jul 2014 16:03:45 -0700

Bauchi — The Community and Social Development Agency (CSDA) came into existence after the expiration of the Local Empowerment and Environmental Management Project (LEEMP). The agency is a new intervention that is building on established ...
 
Nigerian Observer
Thu, 21 Aug 2014 00:15:19 -0700

The council boss noted that Owan West is yet to produce its own counterpart fund for it to access the MDGs fund yet the legislators are divided on whether to approve the fund or not. The Chairman further said the MDGs is a programme that will be ...
 
Inquirer.net
Mon, 28 Jul 2014 09:07:30 -0700

The P450 million from the DAP was the first-year counterpart fund of the government, according to the Department of Budget and Management. The Court of Appeals is hearing a petition filed by former Iloilo Rep. Augusto Syjuco Jr. to stop the project.
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