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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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31 news items

 
The Guardian
Sun, 07 Sep 2014 17:56:15 -0700

... deplore N500 million from its 2013 Subsidy Reinvestment and Empowerment program (SURE-P) funds as counterpart fund to assess the funds from BOA, while the N500 million loan from the BOA would be used as counterpart fund to assess that of the BOI.
 
Inquirer.net
Sun, 14 Sep 2014 11:46:16 -0700

It is funded by a $203-million loan from the South Korean government through its Export-Import Bank's Economic Development Cooperation Fund with a counterpart fund from the Philippine government amounting to P2.2 billion. The project would generate ...
 
AllAfrica.com
Mon, 08 Sep 2014 20:11:15 -0700

... government had done a lot to mobilise states towards attaining the goals of Education For All (EFA), however many states have refused to access their funds at the Universal Basic Education (UBE) because of their unwillingness to part with ...
 
AllAfrica.com
Sat, 06 Sep 2014 20:22:30 -0700

Chinyere Okunna, commended President Jonathan for his commitment towards addressing the problem of erosion in the South-east, stressing that "Anambra State immediately had to pay its counterpart fund of N500 million in an effort to see the project move ...
 
AllAfrica.com
Tue, 09 Sep 2014 16:03:45 -0700

... had done a lot to mobilise states towards attaining the goals of Education For All (EFA), but regretted that many states have refused to access their funds at the Universal Basic Education (UBE) because of their unwillingness to part with ...
 
AllAfrica.com
Tue, 26 Aug 2014 17:11:15 -0700

Executive Secretary of the Universal Basic Education Commission (UBEC), Dikko Suleiman has blamed state governments for low basic education, adding that they were too complacent in providing their counterpart funds necessary for funding of education ...
 
BusinessDay
Thu, 11 Sep 2014 17:11:15 -0700

At least 88 people have been screened and recommended to benefit from the N1 billion Bank of Industry (BoI) and Oyo State government counterpart fund. So far, 155 persons were screened by the bank while the 88 people had been recommended to be ...
 
Visayan Daily Star
Sun, 14 Sep 2014 19:48:45 -0700

She said total cost of the two projects will reach P3.6 million, with the city government of Bago giving a 20 percent counterpart fund. The GPBP was designed to empower the farmers by giving them access to government funds through sustainable ...
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