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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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408 news items

 
The Guardian
Tue, 21 Apr 2015 04:05:46 -0700

On counterpart funding, the Cross River state NEWMAP project Coordinator, thanked the State Governor Mr. Lyel Imoke for the "approval and release of N230million as first tranche of counterpart fund to support the Project in the state. He said this has ...
 
Sun.Star
Fri, 24 Apr 2015 08:45:00 -0700

THE Department of Transportation and Communications (DOTC) has awarded the detailed engineering design and construction supervision contract for the P10.6-billion Bus Rapid Transit (BRT) project in Cebu City to a Korean firm. Cebu City BRT head Atty.
 
Daily Trust
Fri, 06 Mar 2015 04:06:54 -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 ...
 
Sun.Star
Sat, 25 Apr 2015 02:00:00 -0700

Rains were experienced Thursday evening in some areas in Bacolod City, Bago City, Silay City, Cadiz City, and Manapla town. The cloud seeding operation has a budget of P4 million, of which P2.8 million is the counterpart fund of the province, and the ...
 
Sun.Star
Mon, 20 Apr 2015 05:00:00 -0700

It is open to all provinces, cities and municipalities awarded with the Seal of Good Housekeeping provided that the LGU shall allocate a counterpart fund to implement capital investment projects aligned with the national development agenda and priorities.

Rappler

Rappler
Tue, 21 Apr 2015 03:07:30 -0700

Department of Transportation and Communications (DOTC) spokesperson Michael Arthur Sagcal said Tuesday, April 21, that the World Bank is expected to shoulder $2.9 million of the total contract price, while the counterpart fund of up to P67.8 million ...
 
THISDAY Live
Wed, 15 Apr 2015 19:15:00 -0700

He noted that the state government so far, has financially supported the Project with a sum of N800 million counterpart fund contribution, with assurances for more support as the project prepares to tackle the greatest threat to human existence and ...
 
Manila Standard Today
Sun, 19 Apr 2015 09:02:42 -0700

The government will provide the counterpart fund of P1.434 billion. The 10 vessels will be delivered from the third quarter of 2016 up to the third quarter of 2018. The Coast Guard will use the MRRVs to enforce maritime laws, protect the marine ...
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