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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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251 news items

 
AllAfrica.com
Sat, 27 Jun 2015 16:37:30 -0700

... Micro Finance Bank Ltd (MOUMFB) MOUMFB managing director, Mr. Bashir Ogungbangbe, said his bank acted as the women association's financial advisers for the loan and also paid the 30 per cent of the N70million loan counterpart fund as required by ...
 
The Punch
Sun, 05 Jul 2015 12:30:00 -0700

Speaking through his Special Assistant on Media and Publicity, Mr. Samuel Aruwa, the governor said the Yero's government left behind N8bn counterpart fund and not “working money” capital as claimed by Bajoga. El-Rufai's spokesman stated this at a press ...
 
AllAfrica.com
Thu, 25 Jun 2015 04:26:15 -0700

According to him, states and FCT can access 1st quarter, 2014 allocation of N238,074.324.33 by providing equivalent as counterpart fund and meeting other draw down conditions. Daily Trust check revealed that the programme was not adopted by many ...
 
Daily Trust
Fri, 06 Mar 2015 04:00:00 -0800

He lamented that the Goodluck Jonathan administration's refusal to pay its counterpart fund had really affected progress of the port. Fashola also told residents of the area that the LFTZ was to their advantage, noting that it would generate employment ...
 
Inquirer.net
Sun, 14 Jun 2015 15:17:54 -0700

The project is funded by a $203-loan from the Eximbank with a counterpart fund from the Philippine government amounting to P2.2 billion. JRMP II is the second of a two-stage project aimed at the multipurpose use of water of the Jalaur River, one of the ...
 
Inquirer.net
Sat, 13 Jun 2015 09:16:46 -0700

The project is funded by a $203-million loan 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 megadam is the largest ...
 
Inquirer.net
Thu, 11 Jun 2015 04:55:28 -0700

The project is funded by a $203-million loan 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 megadam is the largest ...
 
Daily News
Fri, 26 Jun 2015 15:41:15 -0700

... availability of food in the arid area. According to the deputy minister, the government in collaboration with the district had prepared and submitted a request of 400m/- from the Food Aid Counterpart Fund for implementation of the Mwiboo irrigation ...
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