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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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369 news items

 
InterAksyon
Wed, 22 Jul 2015 19:48:45 -0700

MANILA – The government has allocated P1.08 billion for the rehabilitation of the 40-year old Angat Dam in Norzagaray, Bulacan. In a statement, the National Power Corp. (Napocor) said the government has allocated P1.08 billion for the upgrade of ...

SKNVibes.com

SKNVibes.com
Thu, 30 Jul 2015 05:56:15 -0700

The fund would provide finance for rehabilitation and reconstruction after disasters such as hurricanes and floods. A counterpart fund- the Macroeconomic and Stabilization Fund - would be used to provide countercyclical finance to address economic ...
 
AllAfrica.com
Tue, 28 Jul 2015 04:37:30 -0700

Indeed, Ekiti paid its counterpart fund of N80 million to the scheme for the NHIS/MDGs MCH Project in January 2014, which the scheme matched with another N80 million, which is normal. As at today, there is a balance of N17 million in that account. So ...
 
AllAfrica.com
Fri, 24 Jul 2015 04:26:15 -0700

Currently, the Minority Leader in Ebonyi State House of Assembly, representing Afikpo North East constituency, she disclosed that there are many intervention projects that a political officer holder can access through loans, partnership and counterpart ...
 
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 ...
 
Manila Bulletin
Mon, 27 Jul 2015 07:20:34 -0700

Argao, Cebu – The Cebu provincial government is setting aside P24.7 million as counterpart fund with its partners in restoring eight Gabaldon school buildings around the province. Gabaldon buildings were constructed by the Americans in 1932.

The Guardian Nigeria (satire) (press release) (blog)

The Guardian Nigeria (satire) (press release) (blog)
Sat, 11 Jul 2015 18:52:15 -0700

The Governor said, in spite of the economic downturn, he had just approved the release of N20 million to UNICEF as counterpart fund to enable it carry out its projects across the state. He explained that having realised the importance of development ...
 
Baguio Midland Courier
Tue, 28 Jul 2015 20:45:00 -0700

We are willing to provide counterpart fund if needed so that our students no longer have to go out of the municipality for their tertiary education,” he said. “Surely they will soon be a part of the history of this institution and our place. This will ...
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