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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.

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28 news items

 
Inquirer.net
Mon, 28 Jul 2014 09:07:30 -0700

It is funded by the $203-million official development assistance from the South Korean government through its Export-Import Bank's Economic Cooperation Fund, with a counterpart fund from the Philippine government amounting to P2.2 billion. The P450 ...
 
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 ...

Daily Sun

Daily Sun
Thu, 24 Jul 2014 09:52:30 -0700

She added that another 13 months arrears were outstanding on their Consolidated Health Workers Salary Structure, just as she also alleged that the government had not been remitting its counterpart fund concerning their pension: “We have written to the ...
 
Inquirer.net
Thu, 24 Jul 2014 03:04:44 -0700

The P11.2-billion JRMP2 in Calinog town in Iloilo is funded by a $203-million official development assistance of the South Korean government through its Export-Import Bank's Economic Cooperation Fund with a counterpart fund from the Philippine ...

Bulatlat

Bulatlat
Wed, 23 Jul 2014 00:18:45 -0700

The Aquino government's total counterpart fund is P2.24 billion, all of which will come from DAP and possibly other pork barrel funds since the Jalaur Dam is not in the national budget. Thus we see how DAP-driven corruption is deliberately and ...
 
THISDAY Live
Wed, 16 Jul 2014 20:56:15 -0700

The Civil Liberties Organisation (CLO) in Rivers State has called on Governor Chibuike Amaechi to order an investigation into how the Commissioner for Agriculture, Emma Chinda, spent about N100 million counterpart fund on the World Bank project for ...
 
Nigerian Observer
Wed, 09 Jul 2014 23:57:56 -0700

The non-payment of counterpart fund by the benefiting states and local governments is hindering the successful implementation of the programme. According to the rules guiding donor-funded programme, only payment of the required counterpart fund can ...

The Guardian Nigeria

The Guardian Nigeria
Thu, 17 Jul 2014 17:00:00 -0700

Between 2007 and 2011, Ogun State defaulted in the payment of counterpart fund for UBEC, hence no money could be accessed under the UBE Act; parents paid for everything. The state also defaulted in managing the ETF in 2009, hence was unable to ...
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