Relieving an impoverished country of its debt would seem to almost una

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Relieving an impoverished country of its debt would seem to almost unavoidably help the citizens of that nation. Indeed, health care and education spending is now greater than debt service payments in many countries that have been granted partial debt relief by the Heavily Indebted Poor Countries (HIPC) Initiative launched by the International Monetary Fund and the World Bank, and complete debt relief by the supplementary Multilateral Debt Relief Initiative (MDRI). Several factors, however, have kept these programs from becoming truly transformational.

For a nation to qualify for the HIPC, it must have a level of debt that cannot be managed through traditional means. The removal of this enormous burden means that badly needed resources can go to programs that aid needy citizens, just as is intended. However, the HIPC has strict rules that sharply limit this spending. In some cases, teachers are not hired and HIV/AIDS tests are not administered because the sudden spending might lead to macroeconomic instability. This is a paradox that must be confronted: Poor nations need to spend money desperately but wisely.

A more daunting obstacle is the lack of a private sector in many of the countries that are served by the HIPC. Property rights may be virtually non-existent. Without individuals and businesses willing and able to invest resources in their own country, progress can be glacial. Outside investors are forced to deal not with business partners as such, but with governmental agencies ranging from the inept to the murderously corrupt. There is no guarantee that funds meant for a hospital or school will ever find their way to the intended destination, whether because of corruption or the sheer difficulty of moving goods around in a place that is, as is so often the case in truly poor countries, at war.

Debt relief remains an important tool in reducing the terrible suffering that affects so many people in the underdeveloped world. However, it is not enough to clean the slate and say, “start anew.” Without the willingness on the part of the governing body to allow its citizens to take part in their own development, and without the right balance of emergency spending and careful investment, unmanageable debt will return, as evidenced by nations that have been borrowing money faster than their debt can be relieved.   1

Which of the following titles best summarizes the contents of the passage?

(A) Debt Relief as a Tool for Increasing Private Investment in Impoverished Nations
(B) The Difficulties of Implementing Debt Relief in Very Poor Countries
(C) Obstacles to Channeling Aid to Needy Destinations in Very Poor Countries
(D) The Inherent Flaws in Debt Relief Programs 
(E) HIPC: Well-Meaning, but Insufficient

B 
 2

Which of the following was NOT mentioned as a difficulty associated with debt relief?

(A) Long-term needs have to be addressed at the same time as more immediate one.
(B) Nations that need debt relief are often in the midst of violent conflicts.
(C) Debt relief can swiftly be replaced by new debt.
(D) Private investors in very poor countries are often corrupt. 
(E) The pace of development in poor nations can be extremely slow.

D 
 3

According to the passage, a nation receiving assistance from the HIPC _______.
(A) must not be engaged in a war in which it is an aggressor
(B) must have at least a minimal amount of privately held property, including businesses
(C) must not have a level of debt that can be managed through a typical debt relief program
(D) is required to allow ordinary citizens input regarding the use of resources that have been made available through the initiative
(E) would also be eligible for assistance from the MDRI

C 
 4

Which of the following can be inferred from the passage regarding some of the nations that have received assistance from the HIPC initiative and from the MDRI?

(A) They have histories of macroeconomic instability.
(B) Debt service payments once exceeded the amount of money that was spent on schools and hospitals.
(C) Property rights had to be established prior to receiving the assistance.
(D) Civil war sharply limited the amount of debt relief provided.
(E) The citizens were unwilling to take part in their nations’ development.
 B

Nightfury14 · Accepted Answer

Which of the following titles best summarizes the contents of the passage?

(A) Debt Relief as a Tool for Increasing Private Investment in Impoverished Nations -  Not mentioned in the passage 
(B) The Difficulties of Implementing Debt Relief in Very Poor Countries. -  Apt Title 
(C) Obstacles to Channeling Aid to Needy Destinations in Very Poor Countries  Not mentioned in the passage 
(D) The Inherent Flaws in Debt Relief Programs.  Passage doest enumerate flaws of programs 
(E) HIPC: Well-Meaning, but Insufficient.  Incorrect Inference

Which of the following was NOT mentioned as a difficulty associated with debt relief?

(A) Long-term needs have to be addressed at the same time as more immediate one.
(B) Nations that need debt relief are often in the midst of violent conflicts.
(C) Debt relief can swiftly be replaced by new debt.
(D) Private investors in very poor countries are often corrupt. -  Incorrect Interpretation - In para 3 "Outside investors are forced to deal not with business partners as such, but with governmental agencies ranging from the inept to the murderously corrupt." 
(E) The pace of development in poor nations can be extremely slow.

According to the passage, a nation receiving assistance from the HIPC _______.
(A) must not be engaged in a war in which it is an aggressor
(B) must have at least a minimal amount of privately held property, including businesses -  Para 2 "For a nation to qualify for the HIPC, it must have a level of debt that cannot be managed through traditional means." 
(C) must not have a level of debt that can be managed through a typical debt relief program
(D) is required to allow ordinary citizens input regarding the use of resources that have been made available through the initiative
(E) would also be eligible for assistance from the MDRI

Which of the following can be inferred from the passage regarding some of the nations that have received assistance from the HIPC initiative and from the MDRI?

(A) They have histories of macroeconomic instability.
(B) Debt service payments once exceeded the amount of money that was spent on schools and hospitals.  Para 1 "Indeed, health care and education spending is now greater than debt service payments in many countries that have been granted partial debt relief by" 
(C) Property rights had to be established prior to receiving the assistance.
(D) Civil war sharply limited the amount of debt relief provided.
(E) The citizens were unwilling to take part in their nations’ development.

alpham · Answer

Which of the following titles best summarizes the contents of the passage?

(A) Debt Relief as a Tool for Increasing Private Investment in Impoverished Nations - too narrow
 (B) The Difficulties of Implementing Debt Relief in Very Poor Countries  - perfect
(C) Obstacles to Channeling Aid to Needy Destinations in Very Poor Countries - not correct, there is nothing difficult about channeling the aid.
(D) The Inherent Flaws in Debt Relief Programs - 'Inherent' is not the right word choice here. There are flaws but they are not inherent. 
(E) HIPC: Well-Meaning, but Insufficient - too narrow

Which of the following was NOT mentioned as a difficulty associated with debt relief?

(A) Long-term needs have to be addressed at the same time as more immediate one. - stated in passage 
(B) Nations that need debt relief are often in the midst of violent conflicts. - mentioned at the end of paragraph 3
(C) Debt relief can swiftly be replaced by new debt. - stated in passage 
 (D) Private investors in very poor countries are often corrupt.  - correct, the passage talks about the government not investors.
(E) The pace of development in poor nations can be extremely slow. - stated in passage

According to the passage, a nation receiving assistance from the HIPC _______.
(A) must not be engaged in a war in which it is an aggressor - unknown
(B) must have at least a minimal amount of privately held property, including businesses - tricky but not talked about in the passage
 (C) must not have a level of debt that can be managed through a typical debt relief program  - true this is stated directly in the passage
(D) is required to allow ordinary citizens input regarding the use of resources that have been made available through the initiative - unknown
(E) would also be eligible for assistance from the MDRI - unknown

Which of the following can be inferred from the passage regarding some of the nations that have received assistance from the HIPC initiative and from the MDRI?

(A) They have histories of macroeconomic instability. - tricky but can not be inferred 
 (B) Debt service payments once exceeded the amount of money that was spent on schools and hospitals.  - yes this can be inferred. 
(C) Property rights had to be established prior to receiving the assistance. - unknown, the passage states 'property rights  may be  non existant' the word may be is very important here. 
(D) Civil war sharply limited the amount of debt relief provided. - unknown
(E) The citizens were unwilling to take part in their nations’ development. - unknown

nikhilbansal08 · Answer

Which of the following titles best summarizes the contents of the passage?

(A) Debt Relief as a Tool for Increasing Private Investment in Impoverished Nations - Too specific 
(B) The Difficulties of Implementing Debt Relief in Very Poor Countries - summarize the passage to great extend
(C) Obstacles to Channeling Aid to Needy Destinations in Very Poor Countries - Difficulty is not with channeling aid but in implementing the debt relief
(D) The Inherent Flaws in Debt Relief Programs - 'Inherent' too hard word
(E) HIPC: Well-Meaning, but Insufficient - too specific

Which of the following was NOT mentioned as a difficulty associated with debt relief?

(A) Long-term needs have to be addressed at the same time as more immediate one. - Mentioned in 3rd 
(B) Nations that need debt relief are often in the midst of violent conflicts. - mentioned 
(C) Debt relief can swiftly be replaced by new debt. - mentioned
(D) Private investors in very poor countries are often corrupt. - It says that investors have to work with the corrupt governmental agencies and not the other ways..
(E) The pace of development in poor nations can be extremely slow. - mentioned

According to the passage, a nation receiving assistance from the HIPC _______.
(A) must not be engaged in a war in which it is an aggressor - not supported in passage 
(B) must have at least a minimal amount of privately held property, including businesses - not supported in passage 
(C) must not have a level of debt that can be managed through a typical debt relief program - Yes true 
(D) is required to allow ordinary citizens input regarding the use of resources that have been made available through the initiative- not mentioned 
(E) would also be eligible for assistance from the MDRI - not mentioned

Which of the following can be inferred from the passage regarding some of the nations that have received assistance from the HIPC initiative and from the MDRI?

(A) They have histories of macroeconomic instability. - cant be inferred
(B) Debt service payments once exceeded the amount of money that was spent on schools and hospitals. - yes this can be inferred.
(C) Property rights had to be established prior to receiving the assistance. -
(D) Civil war sharply limited the amount of debt relief provided. - no direct inference 
(E) The citizens were unwilling to take part in their nations’ development. - not mentioned

arunavamunshi1988 · Answer

I felt this passage to be very difficult.... But don't know why.

Can anybody please counter my below points to let me know where I my analysis went wrong -

Which of the following titles best summarizes the contents of the passage?

(A) Debt Relief as a Tool for Increasing Private Investment in Impoverished Nations - Not mentioned in the passage
(B) The Difficulties of Implementing Debt Relief in Very Poor Countries. - The passage does not say anything about difficulties in implementing debt relief program.. If says that these programs though look well, but they will not bring the intended result. The passage gave examples about why these programs will not bring the intended results. exp - for govt corruption, debt level of the country etc.
(C) Obstacles to Channeling Aid to Needy Destinations in Very Poor Countries Not mentioned in the passage
(D) The Inherent Flaws in Debt Relief Programs. Passage doest enumerate flaws of programs
(E) HIPC: Well-Meaning, but Insufficient. Correct one.... Because this choice says the main program HIPC looks well but truly insufficient to bring the intended result.

Which of the following can be inferred from the passage regarding some of the nations that have received assistance from the HIPC initiative and from the MDRI?

(A) They have histories of macroeconomic instability.
(B) Debt service payments once exceeded the amount of money that was spent on schools and hospitals. Para 1 "Indeed, health care and education spending is now greater than debt service payments in many countries that have been granted partial debt relief by" --> how come this be inferred? today school and hospital cost is greater, but it does not mean that in past it was opposite.. They might be comparable...
(C) Property rights had to be established prior to receiving the assistance.
(D) Civil war sharply limited the amount of debt relief provided.
(E) The citizens were unwilling to take part in their nations’ development. --> I guess this is the correct ans... Because it is clearly mentioned in this passage that in order to have success, these programs might need citizens' proactive response, hinting that citizens were unwilling to take part previously.

arvind910619 · Answer

Which of the following can be inferred from the passage regarding some of the nations that have received assistance from the HIPC initiative and from the MDRI?

(A) They have histories of macroeconomic instability.
(B) Debt service payments once exceeded the amount of money that was spent on schools and hospitals.
(C) Property rights had to be established prior to receiving the assistance.
(D) Civil war sharply limited the amount of debt relief provided.
(E) The citizens were unwilling to take part in their nations’ development.

Imo D

But the answer is B.
Can anyone please explain why D is wrong.

srinjoy1990 · Answer

"There is no guarantee that funds meant for a hospital or school will ever find their way to the intended destination, whether because of corruption or the sheer difficulty of moving goods around in a place that is, as is so often the case in truly poor countries, at war." --> This implies the distribution of aid was hampered not the supply. . Hope this helps.

warrior1991 · Answer

Which of the following can be inferred from the passage regarding some of the nations that have received assistance from the HIPC initiative and from the MDRI?

(A) They have histories of macroeconomic instability.
(B) Debt service payments once exceeded the amount of money that was spent on schools and hospitals.
(C) Property rights had to be established prior to receiving the assistance.
(D) Civil war sharply limited the amount of debt relief provided.
(E) The citizens were unwilling to take part in their nations’ development.

I marked E for this one.

Though few lines in the passage say that "Indeed, health care and education spending is now greater than debt service payments in many countries that have been granted partial debt relief by the Heavily Indebted Poor Countries (HIPC) Initiative launched by the International Monetary Fund and the World Bank, and complete debt relief by the supplementary Multilateral Debt Relief Initiative (MDRI). ", how can we deduce that earlier the case was reverse. There can be a case where both "health care and education spending" AND "debt service payments" were equal.

Going onto E, yes few lines in the passage highlight that citizens were unwilling to take part in nations's development.

carcass   GMATNinja   adkikani 
Please help

JarvisR  Your post says that you got all correct. Can you please help explain the answer to the question mentioned above.Would be highly appreciated.

workout  .... You have to workout here :> 
Please help

Nikhil · Answer

warrior1991

The lines you quoted above, "health care and education spending is now greater than debt service payments in many countries that have been granted ..." implies that the health care and education spending are greater than debt service payments today. Option B says there was one such instance where the health care and education spending are greater than debt service payments. So option B is a direct inference from the passage.

The first time passage talks about willingness is "Without individuals and businesses willing and able to invest resources in their own country, progress can be glacial."

Observe that the passage asks only about "nations that have received assistance from the HIPC initiative and from the MDRI" but the above sentence doesn't associate itself to these nations. The author states above sentence as a fact or an observation.

The second time the author talks about "willingness", he talks about the willingness of the government and not the individuals. Hence I eliminated option E

warrior1991 · Answer

Thank you for your valuable insight.

My one doubt remains unanswered .
What if the health care and education spending were equal to the debt service payments.
Why are we assuming that it was greater ??
It can be equal as well.

Please enlighten  workout

Sent from my iPhone using  GMAT Club Forum mobile app

Nikhil · Answer

warrior1991

We are not assuming that health care and education spending are now greater than debt service payments. It is given as a fact in the second line of the first paragraph.

Since the question is asking for an inference which must be true when the information in the passage is true, the option "Debt service payments once exceeded the amount of money that was spent on schools and hospitals." is correct.

"debt service payments" has exceeded "health care and education spending" even if they were equal before or if "debt service payments" is less than "health care and education spending"

Hope it helps.

TaN1213 · Answer

Which of the following can be inferred from the passage regarding some of the nations that have received assistance from the HIPC initiative and from the MDRI?

(A) They have histories of macroeconomic instability.
(B) Debt service payments once exceeded the amount of money that was spent on schools and hospitals.
(C) Property rights had to be established prior to receiving the assistance.
(D) Civil war sharply limited the amount of debt relief provided.
(E) The citizens were unwilling to take part in their nations’ development.

"Indeed, health care and education spending is now greater than debt service payments in many countries that have been granted partial debt relief by the Heavily Indebted Poor Countries (HIPC) "
==> HCE spending > DSPayments.

And option B says DSPayments > HCE spending.

These two statements are opposite. How is then B correct?

Can anyone explain ?

Sajjad1093 · Answer

1. Which of the following titles best summarizes the contents of the passage?

(A) Debt Relief as a Tool for Increasing Private Investment in Impoverished Nations
(B) The Difficulties of Implementing Debt Relief in Very Poor Countries
(C) Obstacles to Channeling Aid to Needy Destinations in Very Poor Countries.
(D) The Inherent Flaws in Debt Relief Programs 
(E) HIPC: Well-Meaning, but Insufficient

Option B and C seem to extremely overlapping. I can make the case for C as due to corrupt govt and non-existent framework doesnt allow the money to be channeled to the the parties in need.

While again Option B also has its own merits.

Can anyone define what methodology to follow in such cases? Thanks!

dharam44 · Answer

Which of the following titles best summarizes the contents of the passage?

(A) Debt Relief as a Tool for Increasing Private Investment in Impoverished Nations - Not mentioned in the passage
(B) The Difficulties of Implementing Debt Relief in Very Poor Countries. - 
(C) Obstacles to Channeling Aid to Needy Destinations in Very Poor Countries 
(D) The Inherent Flaws in Debt Relief Programs. Passage doest enumerate flaws of programs
(E) HIPC: Well-Meaning, but Insufficient. Correct one.... this choice represents crux of passage. Though the main program HIPC looks well, it needs support of government and local people to bring the intended results

please comment....  workout

thangvietnam · Answer

question one is hard.
passage looks simple and we think we fully understand it. but it takes a long time reread the passage the understand main idea. the passage can be hard to understand even the language is simple. the key is to read slowly and dont be cheated to read fast.

question 1 contain 3 answer choice which mention only a part of the passage. this is called TOO NARROW ANSWER, which we need to know to eliminate though they are atractive.

the 2 CLOSE ANSWERS are choice b and d. it takes me a long time for these 2. we need to reread the passage again. generalize the whole passage. it is hard.

Diya52 · Answer

Q4. Which of the following can be inferred from the passage regarding some of the nations that have received assistance from the HIPC initiative and from the MDRI?

(A) They have histories of macroeconomic instability.
(B) Debt service payments once exceeded the amount of money that was spent on schools and hospitals.
(C) Property rights had to be established prior to receiving the assistance.
(D) Civil war sharply limited the amount of debt relief provided.
(E) The citizens were unwilling to take part in their nations’ development.

From the passage the following lines are mentioned about the nations that have received assistance from HIPC and MDRI.  
“ Indeed, health care and education spending is now greater than debt service payments in many countries that have been granted partial debt relief by the Heavily Indebted Poor Countries (HIPC) Initiative launched by the International Monetary Fund and the World Bank, and complete debt relief by the supplementary Multilateral Debt Relief Initiative (MDRI)”

Debt service payments meaning – “The amount of money required to make payments on the principal and interest on outstanding loans, the interest on bonds, or the principal of maturing bonds. An individual or company unable to make such payments is said to be "unable to service one's debt." 
 
 So basically this means that nations after getting aid from HIPC and MDRI are now able to spend their money on health care and education rather than spend their money on debt service. If that is the case then it should also be true that they were previously (once) paying more money on debt service than on schools and hospitals. This is exactly what option B states.   (B) Debt service payments once exceeded the amount of money that was spent on schools and hospitals

David nguyen · Answer

Great question! I have the same issue too. Could any expert help out with this? Many of above people said that C was not mentioned in the passage; however, here is what the author wrote in the passage: "There is no guarantee that funds meant for .... will ever find he way to the intended destination...."

sayan640 · Answer

Sajjad1994  ,  KarishmaB   MartyMurray  ,
Kindly explain the question no. 4 . I was confused amongst options A , B and D . Please explain which part of the passage mentions that the answer is option B .

sayan640 · Answer

Kindly explain why for the question 2 , the answer is option D and not A .
In the passage , they talked about government agencies and how corrupt they are . And they said that the private investors dont even exist.
 A more daunting obstacle is the lack of a private sector in many of the countries that are served by the HIPC.

KarishmaB   MartyMurray   GMATNinja

crimson_noise · Answer

End of Para 3 states:
“ There is no guarantee that funds meant for a hospital or school will ever find their way to the intended destination, whether because of corruption or the sheer difficulty of moving goods around in a place that is, as is so often the case in truly poor countries, at war.”

Here we can deduce that war can restrict movement of goods in the country but not necessarily flow of funds for debt relief to the country from outside.

Relieving an impoverished country of its debt would seem to almost una

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Relieving an impoverished country of its debt would seem to almost una

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