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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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272 news items

 
Manila Bulletin
Thu, 18 Dec 2014 05:52:30 -0800

The DA had allotted P80.57 million for the project with a counterpart fund of P40 million from the Roxas municipal government that saw through three components of the trading center – the fruits and vegetable center; the livestock auction market; and ...
 
AllAfrica.com
Sat, 29 Nov 2014 22:33:45 -0800

NLC's Deputy President, Joe Ajaero, argued that "The bill, when signed into law, would see states to participate in the improvement of primary health centres through a counterpart fund, which would enable them to benefit from the consolidated revenue ...
 
The Guardian
Thu, 04 Dec 2014 00:53:18 -0800

We need to train them and we need to have adequate drugs and facilities," he said, adding that the bill would allow states to participate in the improvement of primary health centres through a counterpart fund, which would enable them to benefit from ...
 
Himalayan Times
Thu, 20 Nov 2014 12:26:15 -0800

KATHMANDU: The government has concluded negotiations with the World Bank Group on the 'Grid Solar and Energy Efficiency Programme' worth $130 million to minimise power leakage, which is measured at 26 per cent of the installed capacity of 770 ...
 
Daily Times Nigeria
Mon, 26 May 2014 06:41:15 -0700

The Niger Government has paid N1 billion in counterpart fund to the UNICEF-assisted Girl Child Education Programme. The Commissioner for Education, Alhaji Danladi Abdulhameed, said this on Mondayin Minna while receiving executive members of the ...
 
AllAfrica.com
Tue, 27 May 2014 23:00:00 -0700

He said: "The delay in completion of the MDGs water project may not be unconnected with the payment of the counterpart fund to the MDGs. We are quite aware of the dwindling revenue in the three tiers of government, and at a time I met the FCT minister ...
 
Republica
Fri, 06 Jun 2014 03:18:45 -0700

... tend to prefer off-budget whereas multilateral donors like the Asian Development Bank and the World Bank Group choose on-budget as they want to ensure return of their money and emphasize on commitment of the counterpart fund from the government.

spyghana.com

spyghana.com
Tue, 21 Oct 2014 03:52:43 -0700

The administration fully paid for all the counterpart fund for that project. But it is regrettable that those responsible did not implement the project well, or I stand to be informed about what had happened. No additional cup of water has been ...
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