Source: Veritas
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.
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
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.
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
This explains that HIPC flaw. So i believe D and B are closer choices and D is apt as much as B. Please explain?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.
