GMAT Sentence Correction (SC) | Re: The 1996 Mid-sea Continent Journalist Tea Party Award winner, a certai

I have a few doubts regarding this question and the correct answer. Shouldn't the possessive be 'Xanadu government's donation of' instead of 'Xanadu government's donating'? or it can simply be 'Xanadu government donating' without the possessive.
The second issue I have with the OA is the modifier ' a very rich country in a very rich continent' that seems to be modifying ' the Audio-vision Council of South-eastern Xanadu'.