Paper 4

Readirig passage
You are advised to spend about 20 minutes on the questions based on the
reading passage below.

Industrialisation and deve/opment

Ouring the 1980s development stagnated, and orten regressed, in much of the Third
World. A third of the entire population of the world lives in countries which experienced
either zero growth or actual decline in the decade. More than forty Third World
countries lett the 19805 with lower per capita incomes than when they entered them
and most fell even lower in 1990 and 1991.

The prices of the raw materials which poor countries seil to survive fell to record
low levels, while the cost of manufactured goods that they import continued to rise.
They became shackled with ever-increasing debts, paying about a quarter of their
earnings to service them. Aid stagnated and bank lending to developing nations fell by
. almost two-thirds.

With falling commodity prices and the rising cost of manufactured goods, and an
inability to industrialise, most developing countries are unable to pay off what they owe.
Even increasing their commodity exports does not necessarily help. Sudan tripled its
cotton exports between 1981 and 1983 but its revenue increased only marginally due
to falling prices. Indeed, raising production helps to drive prices down. It can also do
grave environmental damage by using the best land to grow cash crops and by
increasing indiscriminate logging of tropical rainforests.

Third World exports

The economic pattern developed in the nineteenth century is still in operation: Third
World countries overwhelmingly produce raw materials for export to richer countries.
Third World economies depend on commodity prices: more than half rely on just one or
two crops or minerals for over half of their foreign exchange. As the 1980s began, for
example, Sudan's expert earnings were sixty-five per cent dependent on cotton,
Mauritius's sixty-eight per cent on sugar and Burundi's ninety-three per cent dependent
on coffee. By 1987, the prices ofthirty-three commodities monitored bythe World Bank
(excluding oii) stood at about halfthe 1960 level, falling by about forty per cent in the
1980s alone.

Falling demand: falling prices

Prices, largely determined by demand in the industrial world, have been kept low since
the mid-1970s by recession and s/ow growth. Most agricultural commodities are
produced by dozens of developing countries - sixty-two grow coffee - who compete for
this same sluggish demand. If prices rise, rich countries can cut consumption, as many
of the commodities, Iike Ioananas and coffee, are luxury items. Many more are being
replaced by substitutes developed in wealthy countries: optical fibres are replacing
copper wire in telecommunications, causing havoc for Zaire and Zimbabwe, while
sugar substitutes in sott drinks have cut demand for sugar cane by around a quarter.
These trends will continue, advances in biotechnology bringing a whole range of new
substitutes, and there is little chance of prices recovering in the foreseeable future.

Further practice: Paper 4 97

 Industrialisation increased

The Third World accounts for only 14.2 per cent of the world's industry and 60 per
cent ofthis is injust nine countries, mainly in Asia and Latin America; least developed 2
countries share just 0.21 per cent of world industry between them If more developing
countries industrialised they could earn more from their commodities by processing
them and turning them into finished products, cutting their import bills at the same time. 4

Example Answer
Unfortunately they face formidable obstacles. Most countries lack large home markets
and have to seil as much as possible to the industrialised world - and indeed need to
earn scarce foreign exchange. Even if there were a free market for their goods,
however, it would not be easy to penetrate. Whilst they have the advantage of cheap
labour and locally available raw materials, they have to face well-established rivals with
3 zero
[ ?

....
K

markets and connections already set up, the best technology and science to hand, long
production runs and mass production techniques.

Tariffs and barriers

4
I 5

Poor exporters gene rally have to overcome aseries of tariffs and other barriers before decreased
they reach the well-protected markets of the technologically advanced rich. Generally
speaking, semi-manufactured goods face tariffs which are double those for raw materials
Write the appropriate letter (A-l) in boxes 1-5 on your answer sheet.
and finished goods are penalised twice as highly again. Non-tariff barriers, such as
quotas, are even stricter. Together they are biased against developing countries: cloth
imported into the European Community from poor countries teces tariffs four times as
List of items
high as those imposed on other rich nations. The World Bank estimates that such trade
A manufacturing
barriers cost Third World countries between $50 and $100 billion a year.
8 price of manufacturedgoods
Vulnerable industries are offen concentrated in politica/ly sensitive areas. Rather C per capitaincome
than embark on diversification and retraining programmes, governments find it easier D rawmaterialproduction
to increase protection. Despite several international agreements designed to make E import/expert
access easier for Third World products, twenty of the world's twenty-four industrialised
F aid
countries were more protectionist in 1992 than a decade be fore.
G industrialisation
5tagnant aid H price of commodities
I debt
The United Nations Development Programme estimated in 1992 that the bias of the
J the bestland
world's economy against developing countries costs them $ 500 billion a year, nearly
ten times the amount they receive in aid. The UN target of O. 7 per cent of GNP' in K growth ,i
aid from richer countries is exceeded only by Norway, the Netherlands, Denmark L banklending
and Sweden; the UK, Switzerland and the USA are among those that do not meet half
this figure. Questions 6-15
Gross national product: the total annual income of a country
1
The paragraph below is a summary of the reading passage. Complete the summary by
choosing up to three words from the reading passage to fill the spaces numbered
Questions 1-S 6-15. Write the words in boxes 6-15 on your answer sheet.

The reading passage gives several examples of changes which affected Third World The first one has been done for you as an example.
development during the 19805. Complete the table by selecting one item from the list
of items (A-L) which affect development to fill each ofthe boxes (1-5), showing where
there was an increase, no change or decrease. Summary: Industrialisation and development
..
.

Example Answer

A third ofthe world lives in

countries which experienced ... zero growth
or decline in the 19805.

ihrl

Further practice: Paper 4 99

~\ 98 How to prepare for IELTS
1]1
11
 Whilst the cost of ... 6 ... and debts rose, ... 7 ... and bank lending, raw material prices Just as important is the need to think internationally - if not globally, then certainly
and per capita incomes all fell. Unable to industrialise, Third World countries have in European terms. In addition, senior managers need to have a firm grasp of strategy in
become trapped by their dependence on ... 8 ...only to earn much of their ... 9 ... order to make fundamentallong-term choices which wil/ shape the course of a business
Affected by ... 10 ... and slow growth in the industrialised world, prices fell byalmost - such as the choice of markets or whether or not to demerge a business.
half during the decade and are likely to remain low as a ... 11 ... synthetic substitutes
This broader, more self-critical and strategie out/ook can be cultivated in a number
further reduce demand.ldeally, developing countries ... 12 ... by processing their own
of ways. Forrest believes it is vital that managers assuming director-Ievel responsibilities
commodities, simultaneously cutting the cost of imports. Unfortunately, they have
get outside their own organisation - go abroad, go to business school, talk to the City,
very small ... 13 ...and need the foreign exchange. It is not a free market internationally,
the media, customers - so that they learn to see their company from the outside.
however, as Third World countries lack their own trading connections and only have
access to outdated technology and techniques. They are further penalised by Non-executive directorships can be a route to directorial enlightenment. One of the
restrictive ta riffs and ... 14 ..., estimated to have cost them up to $100 billion a year. best ways of learning to be a good executive director is to be the non-executive director
Despite agreements to encourage freer access for ... 15 ..., protectionism in of another company. Oirectors have to stand back and view themselves and where they
industrialised nations actually increased over the period. are taking their business, which is enormously difficult because people, on the whole, are
not self-critical and tend to become defensive. As a non-executive director of another
company, one can see in others what one's own colleagues will be looking for in oneself.
Reading passage As a result, quite a number of company chairmen now instruct their executive directors to
take on non-executive directorships; everyone benefits from the experience.
You are advised to spend about 20 minutes on the questions based on the
The business sehools, of course, provide a variety of short management courses
reading passage below.
aimed at improving managers' perception. One particularly effective one is the intensive
Handling the high flyers three-week senior manager programme (SMP) at Cranfield School of Management. It
has been specifically devised to get its students to thinkand act as 'strategists, leaders,
A senior director describes his responsibilities in the Industrial Society's study Leaders:
and global managers'. Some 100 high-flying managers from around the world attend
The learning curve of achievement 'I am paid primarily to think, secondly to lead and
the course every year. Programme director and lecturer Oavid Butcher says that the
direct, and lastly, to manage: This could serve as a description of what is expected of
priorities of the course are in fine with the best management thinking and theory of
senior managers. So how can the up-and-coming prepare themselves for this role?
today. The current emphasis on leadership, for example, corresponds with the need for
Here we look at how senior managers can be prepared for their responsibilities through
greater individual contributions from al/levels oftoday's corporations. This is due to the
training. The ingredients needed for successful senior management can be divided, for
fashion for less hierarchical structures.
the sake of argument, into intellectual knowledge and personal qualities.
Cranfield, fike most business schools runs both public programmes (such as the
On the first count, let us assume that our aspiring manager is thoroughly numerate
SMP) and courses tai/ored to specific companies. Each has its advantages. Managers
and possessed of a reasonable grasp of economic affairs, since this remains a
attending the latter will be working towards the same goals, so they will explore
fundamental basis tot any senior managerial role. We will also assume ttet he or she
business issues in greater depth, and people can also be developed in relationship
has received, and absorbed, a fair amount of management training already, in such
with each other. On the other hand, the advantage ofthe public 5Mp, says Butcher, is
matters as time management, marketing, team building and people management - a
the scope for individual attention and development (this would be less practical for
fairly reasonable expectation today when the trend towards management education
managers working within the same compeny). It also gives trainees insights into other
is gathering force in the UK. Finally, let us assume that the aspiring manager also has
organisations and the opportunity to bui/d up an international network.
asound technical knowledge, wh ich is certainly not a far-fetched proposition, since
promotion to senior management on the board offen follows a strong performance in a Most forward-thinking companies groom their brightest and best senior manage-
specialist area. Moreover, while some skills, such as marketing, people management and ment through ablend of management training courses, both public and tai/or-made,
finance are readily transferable, investment decisions in many cases would, presumably, and carefully-plottedjob appointments and secondments. Indeed, provided the
demand a genuine technical understanding from those on the board. Offen, too, senior company is sufficiently international in scope and diverse in character, secondments
managers need an understanding oftechnicafities to win the respect of professionals and abroad are invaluable.
technical staff - indeed, to communicate with them at a serious level.
The Industrial Society offers sm aller organisations short (one-weekJ attachments
It is the ability to move from being a speciafist to a generalist that is al/ important within organisations. Outside managers are seconded to other companies that can help
for a manager wanting to assume a more senior role. Patricia Marshall of Hay/McBer them solve a real problem. For instance, a civi/ servant was sent to the Chester Chronicle
management consultancy ealls this transition the 'paradigm shitt: One problem that and was able to design a newspeper on youth employment when he returned to work.
recurs, says Andrew Forrest of the lntiustriet Society, is that people join the board with The Industrial Society has arranged over 1,400 such attachments. Forrest believes this
experience of only one funetion, such as finance or marketing, when what is needed, is an excellent way of learning.
intel/ectual/y speaking, is vision, maturity, and the ability to think laterally and logically
So far, it is mainly the intellectual aspects of management development that have
beyond specialist contines.
been explored. But the 'paradigm snitt' necessary for a manager to become a director
also involves developing personal skills and ways ofhandling people. Marshall at

100 How to prepare for IELTS Further practice: Paper 4 101

 Hay/McBer claims that the move from functional head to director status involves List of endings
thinking about how best to co-of)erate-wlth one's peers, rather than simply directing A up-to-date management ideas
subordinates, and influencing other people without giving direct orders. B interpersonal relationships

At the GHN consultancy, which specialises in mentoring (the training term for C international networks

coaching) for senior managers, corporate relations director Susan Bloch says that the D international seeondments

modern manager needs to leam to balance skills, acting at times as project manager, at E strategie, internationally-oriented thinking

times as team member: There are some situations which require authoritative behaviour, F taekle genuine problems
others which need a more consultative approach. She stresses that communication at G individual eontributions
al/levels (from the way you talk to the way you dress) is all-important. She also believes H effeetive strategies
that high flyers need to think about politics and internal networking. I design newspapers

Personal coaching (or mentoring) is an effective way of building up these - and other J training and appropriate experienee

- personal skil/s. Indeed, Forrest at the Industrial Society recommends that al/ companies
consider setting up a mentoring scheme, although he stresses that the art of mentoring 22 One short management course aims to develop ...
is a subtle one. Sheila Forbes at Reed Elsevier sees a further role for it in the development
23 The course reflects ...
of such qualities as the courage to take risks and the ability to cope with uncertainty.
Questions 16-19 24 Cranfield's private course allows for greater concentration on ...

Write a maximum of two words for each answer in boxes 16-19 on your answer 25 Most senior managers are selected and prepared tor their positions by means of ._.
sheet. 26 Secondments allow managers to experience other organisations and ...
Questions 16 and 17
Questions 27-30
What are the two main requirements for successful senior management? In the passage different experts claim that different qualities and skills are important
Questions 18 and 19 for successful management at director level, Match the qualities below with the name
of the relevant expert.
As weil as being good at figures and having an extensive management education,
what two other areas of competence should a potential senior manager have? Write A, B or C in boxes 27-30 on your answer sheet.
Questions 20-21 A Susan Bloch
B Sheila Forbes
Read the following statements and say how they reflect the information in the reading
C Patricia Marshall
passage, by writing:

T if it accurately reflects the information given

27 working with and influencing other people
F if it does not reflect the information in the passage
28 dealing with insecurity and risk-taking
NG if the information is not clearly given in the passage.
29 balancing skills
Write your answers in boxes 20-21 on your answer sheet.
30 using all channels of communication.
20 Successful managers must broaden their range of abilities rather than developing
their specialised skills.

21 Many companies now insist that managers take on a non-executive directorship Reading passage
before they can become executive directors.
You are advised to spend about 20 minutes on the questions based on the
Questions 22-26
reading passage below.
In questions 22-26, choose wh ich of the endings (A-J) in the list below best completes Problems with contaminated land in the UK
the sentence according to the information in the reading passage.
'The pol/uter pays' principle
Write the appropriate letter in box es 22-26 on your answer sheet.
Those with an interest in land which is contaminated with noxious substances, or has
been put to a use which makes it liable to be so contaminated, are growing increasingly
concerned that the land may carry with it liabilities for c1ean-up costs or compensation
to third parties. The UK has fol/owed the EC in endorsing the general principle that
'the pol/uter pays'_ However, this principle extends notjust to those who are primarily
responsible for causing any contamination, and the resulting damage to the environment,
but also to others who merely have an interest in the land in question.

102 How to prepare for IELTS Further practice: Paper 4 103

 Who is potentially liable? T if the statement is true

Anyone causing or permitting pollution is ctearly at risk, and this may involve both F if it is false
criminal and civilliability. In the case of criminal offences bya corporate body, certain
NC if it is not clear fram the passage.
individuals could be personally liable for offences for which theyare responsible.
Write your answers in boxes 31-35 on your answer sheet.
Where the 'owner' is made liable for c/ean-up costs, it is not clear precisely who is
covered by this. In the Environmental Proteetion Act 1990, for example, there is no
Example Answer
definition of'owner' and it appears to have been the Government's intention that this
should be the party with the most immediately relevant interest. However, if that party Britain has persuaded the EC
is not in a position to meet financial obligations, then one can expect that others may be to adopt the 'polluter pays'
the subject of claims. This may extend to mortgagees, especially where a lender enforces principle. F
its security by taking possession of land, and possibly also in other circumstances where
it exercises a degree of control. Lending institutions are currently looking anxiously in the 31 Impending legislation on the pollution of land will probably only apply to land
direction of Brussels to see the extent to which lenders are going to be able to avoid which has already been polluted.
being caught for liabilities greater than the value of their security
32 Those holding an interest in contaminated land will be made liable for clean-up
The impact on land transactions costs and compensation.
Buying and selling land 33 Responsibility extends to the owners of the praperty as weil as those who cause
The principle of caveat ernptor: still applies in UK land transactions and the seiler is any contamination.
not obliged to disc/ose the existence of contamination. However, the seiler will be in a 34 Individuals within companies may be personally liable for criminal and civil
stronger position if he has good information as to the state of the premises. Thus a seiler offences committed on land owned by their company.
may carry out his own environmental audit of the site and will usually find it advantageous
35 Owners who simply lend property to individuals and companies mayaiso be
to disclose the resulting information to a prospective purchaser: In certain cases the
seiler may obtain an indemnity from the purchaser where premises are sold subject to made liable.
declared defects or outstanding environmental problems. The purchaser for his part Questions 36-40
will be seeking the best possible information, preferably backed with warranties from the
36 Both the seiler and the purchaser want detailed information on the state of the
seiler and, if possible, coupled with an indemnity from the seiler:
property. How does the seiler obtain this?
Lending
Write up to three words as your answer in box 36 on your answer sheet
The lender's concerns are similar to those of the purchaser: Where there is the possibility
37-38 As weil as information on the state ofthe property, what two other assurances
of contamination, the preliminary investigations must be sufficient to enable a lender
will a purchaser seek?
to make a reasonable assessment of risks. The loan documentation should inc/ude
appropriate warranties, covenants and events of default. Care also needs to be taken in Write one word only for each answer in boxes 37-38 on your answer sheet
enforcing security so that action is not taken by the lender which could open the door
39 What extra precaution needs to be taken in lending rather than buying and selling?
to environmentalliabilities.
Write two words as your answer in box 39 on your answer sheet.
Leasing
40 At which point is it most important that owners who lease property make sure they
When granting alease of land, an owner will need to be careful not only to avoid exposure
are not being exposed to liability?
to liability during the term of the lease but, even more, to prevent the situation arising
whereby he inherits a liability on the termination of the lease. Thus, it would be prudent Write no more than four words as your answer in box 40 on your answer sheet,
for the landlord to control more c/osely the use to which the premises are put, as weil as
including expressed covenants on the part of the tenant not to cause pollution.
Ilatin phrase meaninq 'let the buyer beware'

Questions 31-35

Read the following statements and indicate how they reflect the information in the
reading passage, by writing:

104 How to prepare for IELTS

Further practice: Paper 4 105 I
j
 Paper 4
1 Bill
2 Bill
[Note: answers 1 and 2 can be in either orderl
3 F
4 CIIHIIL
5 C//HIIL
[Note: answers 4 and 5 can be any two of the
letters given, in any orderl
6 manufactured goods
7 aid stagnated
8 commoditiesllcommodityexportsllraw
materialsll commodity prices
9 (scarce) foreign exchange
10 recession
11 whole range ofllrange of new
12 could earn more
13 home markets
14 trade/other barriers
15 Third World products
16 intellectual knowledgellpersonal qualities
[Note: answers 16 and 17 can be in either orderl
17 personal qualitiesllintellectual knowledge
18 economic affairslltechnical knowledge
19 technical knowledgelleconomic affairs
[Note: answers 18 and 9 can be in either order]
20T
21 F [not 'before']
22 E
23 A
24 B
25 J
26 F
27 C
28 B
29 A
30 A
31 F [text states /iable to bel
32 Ne [text states may not wifll
33 T
34 Ne [criminal, yes; civil not stated]
35 T
36 (an) environmental audit
.",
37 warrantiesl/indemnity
38 warrantiesllindemnity
[Note: answers 37 and 38 can be in either orderl
39 enforcing security
40 (on) termination (of the lease)

Answer key 125