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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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262 news items

 
Business World
Mon, 26 Jan 2015 04:33:45 -0800

He explained that for effective disbursement of the fund by the bank, the beneficiary states must sign the financing agreement form and return it to the bank through the federal government as well as pay their counterpart fund, just as he added that ...
 
Daily Trust
Wed, 21 Jan 2015 00:47:28 -0800

Dr Adubi said for effective disbursement of funds by the bank, benefitting states must sign a financing agreement form and return same to the bank through the federal government and also pay their counterpart fund. Responding, Governor Wada assured ...
 
Visayan Daily Star (press release)
Sun, 25 Jan 2015 18:26:15 -0800

Uy and Sagarbarria expressed elation over the information provided by the governor, saying that their LGUs are more than willing to also put up the 10 percent counterpart fund as required under the PRDP. In a press conference held at the L-Fisher Hotel ...
 
Vanguard
Thu, 15 Jan 2015 23:27:55 -0800

THE Niger Government on Thursday said it was collaborating with the International Fund for Agriculture Development (IFAD) to develop cassava and rice value chain in the state. The Commissioner for Agriculture and Rural Development, Prof. Mohammed ...
 
AllAfrica.com
Mon, 29 Dec 2014 01:59:49 -0800

At least N130.8 billion grants are expected from the Global Fund to help fight malaria, tuberculosis and HIV/AIDS in the country, officials of the fund have said. Executive Secretary, Country Coordinating Mechanism (CCM), Dr Fatai Bello, which oversees ...
 
Leadership Newspapers
Sun, 18 Jan 2015 10:00:00 -0800

He added that the project was in partnership with two Chinese firms based on 1.7 billion dollars counterpart fund approved by the National Economic Council. Consequently, the project was given to Messrs Synohydro corporation/China National Electrical ...
 
Baguio Midland Courier
Tue, 20 Jan 2015 19:45:00 -0800

The upgrading started with an initial funding of P14M to repair the bleachers and grandstand. last year, the city late also approved P60M to convert the dirt oval into a tartan track. A counterpart fund from the national government is also expected to ...
 
Daily Times Nigeria
Thu, 15 Jan 2015 18:48:45 -0800

He stated that since 2010, the state government has neglected to remit to the Pension Board its share of 2.5 per cent counterpart fund amounting to nearly N1.44bn to offset the retirees arrears. According to him, the failure of the state government to ...
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