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America's Economy: Going "Part-Time"?

The Buzz

The recent employment report from the Bureau of Labor Statistics (BLS) showed the US economy generated 288,000 jobs, the unemployment rate continued to decline, and the participation in the labor force held steady. By all appearances, it was a blockbuster month for jobs. But one level deeper into the report, it becomes a bit more complicated. Jobs were created, but the question of their quality lingers.

To say the least, the quality was poor. The job gains were solely part-time; 799,000 part-time jobs were taken. Worse still, 523,000 full-time jobs were lost. In fairness, most of these part-time jobs were not inherently bad. The majority of the June gains were in what is commonly referred to as “voluntary” part-time employment—people found part-time work who wanted it. The disconcerting element was the creation of part-time and the simultaneous destruction of full-time jobs.

Part-time jobs—with lower wages, less stability, and higher turnover—are less desirable than full-time ones for an economy. There are fewer fringe benefits associated with part-time work, and the jobs are generally considered to be of lower quality. Not to mention a lack of ability to negotiate for higher wages and lower amounts of job training. This leads to slower consumption growth than would normally be associated with similar levels of employment, a labor force that is likely to be much more volatile in future downturns, and workers with lower levels of on the job skills. A part-time economy simply does not have the economic robustness of a full-time one.

A single month of strong part-time employment creation and abysmal full-time employment would be interesting though not troubling. But this is by no means a outlying statistic. In June, the BLS released its May employment report showing that employment levels rose above their pre-crisis peak for the first time, and this was lauded as a seminal moment of the recovery. But this is deceiving. Full-time employment remains 3.7 million below its December 2007 peak after generating 7.6 million since the 2009 bottom. This means that to get back to the peak, the US must generate nearly 50 percent more full-time jobs than it already has during the recovery. The celebration was premature to say the least.

This struggle betrays some of the deeper scars left in the labor market. The Great Recession created more involuntary part-time jobs than at any other point in the post-war period. These jobs are involuntary in that people wanted full-time work but could not find it. Currently at almost 7.5 million, the number of involuntary part-time employees is 1.7 million below its all-time peak and around 2.5 million above recent long-term levels. Typically labor markets would convert these to full-time jobs as the economy improved. But since the end of the recession involuntary part-time employment has receded only slowly.

These involuntary part-time jobs are the 2.5 million or more “ghost” full-time jobs the economy will need to create just to bring the involuntary part-time employment numbers down to more normal levels. Interestingly, these involuntary part-time workers are already counted as “employed”, and finding full-time employment changes nothing. Instead, they will simply shift from involuntary to full-time, and it will have no effect on the unemployment rate. Also, because the commonly reported “jobs number” comes from a survey of businesses that does not separate part-time and full-time, the shift will not positively effect on the jobs number reported. Furthermore, it will make it much more difficult to reduce the unemployment rate even with an improving economy. This shift will have an effect on measures of underemployment, the figures that measure slack in the labor market, but that is all.

For many reasons, the unemployment rate is difficult to place in a historical context. Is it the current 6.1 unemployment rate comparable to previous periods? Probably not. The unemployment rate shields the part-timer effect. In calculating it, a job is a job; there are no delineations between part-time and full-time. Without understanding the underlying dynamics of the how the US got to its current unemployment rate, it would be easy mischaracterize the current employment situation as vibrant.

There is no question that the employment situation has improved since the recession, and being employed part-time is better than being unemployed. But there are “good” jobs, and there are “bad” jobs—good jobs that people take voluntarily, and bad jobs people accept involuntarily. For the moment, the US has far too many bad jobs and is creating too few good ones. The deeper into the statistics one goes, the less there is to be excited about yet in this recovery. Maybe a celebration will be in order when the economy regains its lost full-time jobs. For now, however, quality is lacking.

Image: Flickr. 

TopicsEconomics RegionsUnited States

What to Expect from Modi's India

The Buzz

India's May 2014 election received far less attention from the U.S. media than it deserved.  The landslide victory of Narendra Modi and the BJP is significant for both India and the Indo-Pacific region. Notwithstanding important achievements - like the Indo-US nuclear deal - the previous Congress-led coalition government of Manmohan Singh, seemed to the electorate like a decade of missed opportunities and drift.  Internationally, many of India's friends and partners often found it too cautious.  In contrast, Modi will have an increased focus on Asia, leveraging Indian diplomacy to increase Asian investment in India.

Internal Focus

Modi's priorities are internal and focus on returning to high growth.  In recent years, the economy has grown just 5-6 percent annually instead of the 8-9 percent of a decade ago.  The view in Delhi is that India needs 7-8 percent growth rates.  Voters were concerned about issues like high commodity prices, job creation, corruption, and inadequate infrastructure. To achieve this growth, Modi seeks to develop infrastructure, build transit corridors, and increase the effectiveness of the Indian bureaucracy.  

Internal security will be a priority for the government, as seen by the selection of veteran counter-terrorism intelligence chief, Ajit Doval, as National Security Advisor.  In its election manifesto, the BJP stressed that it will have a "zero tolerance" policy toward terrorism, indicating that in the event of another terrorist attack, this government will take action unlike the passive response of Singh's government to the 2008 Mumbai attacks.  Beyond responding to the domestic call for a more hawkish stance, this emphasis on domestic security is necessary for growth. It will prove difficult to attract needed investment if foreign investors feel India is unstable.  In the 2000s, India was one of the countries most often struck by terrorist attacks, just after Iraq and Afghanistan.

Southern Asia

During his inauguration ceremony, Modi took the unprecedented step of inviting the heads of government from South Asia, including controversial guests like Nawaz Sharif of Pakistan, Mahindra Rajapaksa of Sri Lanka, and Tibetan Prime Minister-in-exile Lobsang Sangay.  His first foreign visit was to Bhutan.  Modi wants to be seen as the "leader of South Asia" to increase his status and expand regional economic ties.  This will prove difficult: South Asia is one of the world's least economically integrated regions and the regional organization, SAARC, one of the most ineffective.  In addition, China has invested heavily in both infrastructure development and military assistance to several of these states (in particular Sri Lanka and Bangladesh) so Modi will be playing catch up to balance Chinese influence in the region.

China

The most delicate relationship that the new government will have to manage is with China.  Although bilateral trade has grown 30 percent annually in recent years, the trade imbalance (favoring China) is a source of irritation.  China is India's largest trading partner, but India is only China's 10th largest.  Modi's government would like to increase India's access to the Chinese market for its IT and pharmaceutical industries, and increase Chinese capital and capital goods investment in Indian infrastructure.  The recent visit by Chinese Foreign Minister Wang Yi focused on economic issues, in particular getting increased Chinese investment in India's industrial parks and railways.  Beyond economics, there have been murmurs of India becoming a full member of the Shanghai Cooperation Organization (which is unlikely). 

Potential spoilers remain, however, such as the border dispute (last April there was another confrontation), Chinese support for Pakistan, and other issues.  Modi's government has indicated to China that while improved economic ties are important, India will remain firm against Chinese assertiveness.  Among these signals are: inclusion in the government of several figures known for their harder stance on China (VK Singh, Kiren Rijiju, etc.), Modi's invitation of the Tibetan prime minister-in-exile to his inauguration, and plans to develop infrastructure in border areas in Arunachal Pradesh (parts of which are claimed by China as "South Tibet").  When campaigning in Arunachal Pradesh, Modi criticized China's "expansionist mindset."

ASEAN

Modi will also look to resuscitate India's "Look East Policy" (LEP) of economic and security engagement with Southeast Asia.  The Singh government delayed initiatives for increased trade because of domestic politics.  Since one of Modi's priorities is to develop Arunachal Pradesh and other northeastern states, the LEP seeks to bring trade and investment to one of India's least developed areas.  For decades, Delhi has lost great sums of money and suffered many casualties in attempting to prop up these states in the face of violent insurgencies, minimal infrastructure, and poor economies.  Promoting economic ties between Northeast and Southeast Asia is part of a long-term strategy for developing (and bringing peace) to this region of India. 

India has also sought to engage Southeast Asia through military exercises (like the Milan exercises it hosts), and involvement in soft security issues like humanitarian assistance and disaster response.  It has positioned itself as a benign regional power in contrast with China's more assertive posture.  As India becomes more interconnected with Southeast Asia, it risks upsetting Chinese sensibilities, however.  In particular, India's cooperation with longtime friend, Vietnam, both in terms of oil exploration in the South China Sea and defense cooperation could be a spoiler for Sino-Indian relations in the future.

Japan

Much has been made of similarities and close ties between Modi and Japanese Prime Minister Abe Shinzo (Abe is supposedly one of only three people Modi follows on Twitter).  Abe was the guest of honor in January's Republic Day parade (a traditional method of signaling Indian priorities for the coming year) and Modi's second international visit will be to Japan (it is speculated that the delayed Indo-Japan nuclear deal will be finalized during the visit). And while Japanese funds were used to finance Delhi's metro system and the Delhi-Mumbai Industrial Corridor, India needs Chinese as well as Japanese investment.

The burgeoning trilateral security cooperation between India, Japan, and the U.S. will continue and likely strengthen under Modi.  India and Japan regularly have joint military exercises and high-level defense dialogues.  It was announced that Japan will participate in the Indo-US Malabar exercises in the future.  Moreover, an Indo-Japanese arms relationship seems to be developing with Japan's new openness to arms sales and India's new policy on 100 percent FDI in the arms industry.  As the world's largest arms buyer, India is an attractive market (the Japanese US-2 amphibious aircraft is high on India's list).

America

Modi has been careful to send positive signals that he is ready to do business with the U.S.  There were several reasons why the new government could have started with a cooler U.S. relationship.  First, Modi was chief minister of Gujarat during the 2002 sectarian riots and the US had refused to give him a tourist visa since 2005, making Modi the only person ever denied a visa under an obscure law denying visas to people linked to "severe violations of religious freedom."  Second, last winter, law enforcement officials in New York arrested an Indian diplomat on charges of visa fraud.  What should have been a minor incident became a major diplomatic spat between the two nations.  Yet, even before the election, Modi sent signals that relations between the countries could not be adversely affected by individuals and his government is ready to rebuild Indo-U.S. relations.  The visit by Assistant Secretary of State Nisha Biswal in June, plans for Modi's state visit to the U.S. in September, the upcoming Yudh Abyas exercises in India, and prospective arms sales (likely to include helicopters and artillery) indicate movement in a positive direction.

In sum, there is a case to be made for cautious optimism.  Modi will be more decisive, and less risk averse than the previous government.  Modi intends to leverage diplomacy to encourage investment from China and Japan, and deepen economic ties with the U.S.  India will retain its traditional stance of "strategic autonomy," however, and remain inward looking initially.  While Modi won a clear mandate, he is under great pressure to deliver quickly on issues like economic growth, corruption, high commodity prices, and infrastructure.  Modi's government will give priority to economic growth and domestic politics to meet the electorate's high expectations.  There was a sense that the Singh government had invested too heavily in foreign affairs at the expense of domestic reforms.  Modi's government will seek to avoid a similar fate.  So while India will actively seek economic ties, it will retain its traditional hesitation to get too enmeshed into Asian security dynamics.  The difficult part will be courting all major players in the region for investment, and maintaining good relations if a crisis erupts and India is forced to pick a side.

Patrick Bratton is the director of Diplomacy and Military Studies Program and associate professor of Political Science at Hawaii Pacific University. This article was originally published by CSIS: PACNET here

Image: Flickr. 

TopicsForeign Policy RegionsIndia

Wanted: A Real War Of Ideas With Russia

The Buzz
Don’t look now, but Moscow is winning the media war.
 
Since the start of the crisis over Ukraine some four months ago, Russia has waged a massive, sustained media campaign to shape global perceptions about events taking place on the ground there. This offensive—carried out en masse via state-run outlets like Russia Today and through an onslaught of print, radio and television reports—has included everything from blatant mischaracterizations of Ukraine’s political parties to outright fabrications about the extent of the pro-Russian sentiment that exists in the south and east of the country.
 
The effort is unprecedented in scope. According to Russian political commentator Igor Eidman, it amounts to the “biggest information special operation” in modern history. And, up until now, it has gone on largely uncontested. The United States and Europe, divided over how best to respond to the Ukraine crisis specifically, and Russian policy more generally, have marshaled little by way of a strategic response.
 
Without a countervailing message, Russia’s outreach has resonated. At home, having spun his government’s incursion into Ukraine as a strategic victory, Russian president Vladimir Putin is riding a wave of unprecedented popularity. A new survey recently released by the Moscow-based Levada Center has found that Putin enjoys an 82 percent approval rating among Russians between the ages of 40 and 54—and an even higher one among those citizens who are too young to remember the days of the Soviet Union. Abroad, meanwhile, more than a few foreign publics have accepted the idea that Crimea’s annexation was more or less legitimate, and that further Russian action in Ukraine—while undesirable—might not be so unwarranted after all.
 
Belatedly, American public diplomacy is attempting to push back on this narrative. The various organs of U.S. international broadcasting (chief among them Radio Free Europe and the Voice of America) have done so by ramping up their coverage of events in the “post-Soviet space.” They have also launched initiatives like “Crimea Realities,” a new website dedicated to countering disinformation about conditions in Russia’s newest region. But much more needs to be done.
 
Most glaringly, U.S. outreach requires resources in order to properly compete with that of Russia. Currently, the Voice of America’s Russia Service is funded to the paltry tune of just $13 million annually—a mere fraction of the $300 million a year that Russia Today alone is estimated to spend on its particular brand of “news.” At this level, U.S. public diplomacy toward the Russian-speaking world lacks anything resembling the scope and reach needed to counter the Kremlin.
 
The funds to do so, moreover, are readily available, tucked away in various corners of the U.S. government (such as the U.S. Agency for International Development’s now-defunct U.S.-Russia Investment Fund). They simply require attention from Congress in order to be repurposed and harnessed for public diplomacy purposes.  
 
Even more vitally, U.S. broadcasting needs sustained attention from the White House. In its first term, the Obama administration made the idea of a “reset” of relations with Russia a centerpiece of its foreign policy agenda. That approach had fallen on hard times even before the recent events in Ukraine. In their wake, it has been utterly discredited. The White House has been at pains to articulate anything resembling a coherent policy toward Russia since. And because it has not, the official media response to Putin’s Russia has remained largely rudderless.
 
A new approach is sorely needed. Russia’s aggression toward Ukraine represents nothing less than a challenge to the established political and legal order in Europe. As such, it requires a robust, unified reply from Western powers. And by necessity, countering Russian propaganda will need to be an essential component of any such effort. If we are to have a hope of resolving the current crisis without further adventurism on Moscow’s part, Russian citizens need to understand the potential political and economic costs involved for them—and foreign publics must grasp the implications of the current crisis for long-term European security and unity.
 
It is long past time for the United States to begin telling them those things in earnest.
 
Ilan Berman is Vice President of the American Foreign Policy Council in Washington, DC.
 
Image: Wikicommons. 
TopicsMedia RegionsRussia

Why the Iraq War Really Was Different From the Vietnam War

Paul Pillar

The Iraq War, as Heather Marie Stur tells us, should not be lumped together with the Vietnam War as blindly and repeatedly as many seem wont to do. Although the two military expeditions both rank among the costliest blunders in American history, there are indeed many differences between the two. Stur is correct to emphasize differences over similarities, but she completely misses the most significant differences—significant partly because of their implications for avoiding similar blunders in the future.

Difference number one sets the invasion of Iraq in 2003 apart not only from the intervention in Vietnam but from almost every other substantial use of U.S. military force. There was no policy process leading to the decision to launch the war. Whether invading Iraq was a good idea was never on the agenda of any meeting of policymakers, and never the subject of any options paper. Thus no part of the national security bureaucracy had any opportunity to weigh in on that decision (as distinct from being called on to help sell that decision to the public). Sources of relevant expertise both inside and outside the government were pointedly shunned. The absence of a policy process leading to the decision to launch the war is the single most extraordinary aspect of the war.

The U.S. intervention in Vietnam was entirely different. Although as the war went on the decision-making of Lyndon Johnson and his Tuesday lunch group became increasingly closed, the original decisions in 1964 and 1965 to initiate the U.S. air and ground wars in Vietnam were the result of an extensive policy process. The bureaucracy was fully engaged, and the policy alternatives exhaustively discussed and examined. However mistaken the decisions may have turned out to be, they could not be attributed to any short-cuts in the decision-making process.

A second distinctive aspect of the Iraq War is that it was a war of aggression. It was the first major offensive war that the United States had initiated in over a century. Every overseas use of U.S. military force in the twentieth century was either a minor expedition such as ones in the Caribbean or, in the case of major wars, a response to the use of force by someone else. The U.S. intervention in Southeast Asia was a case of the latter: a direct response to the use by North Vietnam of armed insurgency to take over South Vietnam.

This is another respect that sets the Iraq War apart not only from Vietnam but from many other U.S. wars, including a couple of relatively recent ones that Stur incorrectly likens to the Iraq War. Operation Enduring Freedom in Afghanistan in 2001 was a direct response to a terrorist attack by a group that was resident in Afghanistan and allied with its regime. Operation Desert Storm in 1991 was a direct response to blatant aggression by Iraq in invading and swallowing Kuwait. When that aggression was reversed by expelling the Iraqis from Kuwait, the U.S. mission really was accomplished.

Sometimes earlier wars have a lot to do with explaining much later events—and the centenary of World War I has stimulated some interesting analysis of how that war set in train events that still bedevil us today—but Stur's attempt to say something similar about the war in 1991 is mistaken. Some neoconservatives grumbled about Saddam Hussein being left in power, but the grumbling did not have to do with any problems created by Operation Desert Storm; it instead reflected the neocons' desire for other reasons to have a larger regime-changing war in Iraq.

This gets us to a third major difference, which is related to the first one. The Iraq War of 2003 was the project of a small,willful band of war-seekers—what Lawrence Wilkerson has called a “cabal”—who managed to get a weak and inexperienced president to go along with their project for his own political and psychological reasons. An assiduous selling campaign lasting more than a year, which exploited the post-9/11 political mood by conjuring up chimerical alliances with terrorists, mustered enough national support to launch the war. But the base for starting the project was always quite narrow.

By contrast, the United States sucked itself into the Vietnam quagmire on the basis of a very broadly held conventional wisdom about a global advance of monolithic communism, falling dominoes, and the need to uphold U.S. credibility. At the time of the intervention, opposition to the intervention was exceedingly narrow. The Gulf of Tonkin resolution authorizing the use of military force in Vietnam passed against only the lonely nay votes of Wayne Morse and Ernest Gruening in the Senate and no opposition at all in the House. The conventional wisdom pervaded the public and the media, including prominent journalists such as David Halberstam and Neil Sheehan who only later would become identified with publicizing the war's faults and fallacies.

Looking back on the mistakes involved in Vietnam War became a national exercise in painful retrospection. It included soul-searching by some of those most directly involved in launching the U.S. expedition; some of the most candid and insightful came from former secretary of defense Robert McNamara. The difference with the post-war posture of the people who brought us the Iraq War has been stark. Despite the much narrower original responsibility for that war, mea culpas from those who promoted it have been hard to find. The promoters have instead tried to find creative ways to blame the damage they caused on those who later had to clean it up.

All of this has implications for avoiding comparable blunders in the future. The Cold War is over, and the parts of the Vietnam-era conventional wisdom involving the nature of international communism are gone as well. We still see similar thought patterns, however, applied in other ways, especially with notions of upholding credibility and domino-like scenarios of geographically expanding threats. There still is Cold War-type thinking that treats Russia as if it were the Soviet Union, and that treats radical Islam as if it were a monolithic foe that is our enemy in a new world war.

Avoiding another blunder like the Iraq War means being wary not only of these sorts of thought patterns but also of a more direct hazard. The neocons who brought us that war are not only unrepentant but also very much around and still selling their wares. We most need to remember what they sold as the last time, and not to buy anything from them again.   

Image: U.S. Army Flickr. 

TopicsIraq Vietnam RegionsUnited States

Japan's Collective Self-Defense Play: A Game Changer?

The Buzz

As anticipated, Japan’s Cabinet has reinterpreted the constitution to permit Japan to exercise the right of collective self-defense. After some initial histrionics – Xinhua, the official Chinese news agency, opined that Prime Minister Shinzo “Abe is manipulating a dangerous coup to overturn the country's post-war pacifism and democratic ideals, as he hones in on releasing the shackles of the nation's legally tethered military and war will from its war-renouncing Constitution” – the decision was met by neighbors with resignation and the grinding of teeth. A Chinese foreign ministry spokesperson urged Japan “to earnestly respect legitimate security concerns of its Asian neighbors, deal with relevant issues with discretion, not to harm the national sovereignty and security interests of China and not to undermine regional peace and stability.” His counterpart in Seoul insisted that any Japanese exercise of collective self-defense affecting security and national interests on the Korean Peninsula “cannot be accepted unless we request it or agree to it.”  

If the reaction seems anticlimactic, it is because there is much less going on than meets the eye. The legal and constitutional constraints on Japanese security policy are less restrictive than many admit.  As Adam Liff noted recently, Japanese prime ministers have reinterpreted the constitution throughout the postwar era when they felt compelled to do so. Bureaucrats and politicians have been masterful practitioners of the “fudge” when addressing hard national security and alliance issues: recall the secret agreements regarding US nuclear weapons on Japanese territory. And Japan’s Supreme Court has traditionally deferred to politicians on such matters.

The real constraints on Japan’s security policy have been and will continue to be social and political. Recall that Abe took office with a desire to rewrite the entire constitution. That became an intent to change just Article 9. He has settled, after a much longer process than anticipated, for a change in the interpretation of the exercise of the right of collective self-defense – and now must wait for legislation to turn this week’s Cabinet decision into law. When that happens – it could take as long as two years – the use of Japan’s military will be subject to three conditions:

1: Japan can come to the aid of an ally with which it has a “very close relationship” if there is a threat to constitutional rights to life, liberty, and happiness of Japanese citizens. [Taken literally, Japan has only one ally, the United States, which considerably limits application of this change in interpretation];  

2: There is no other diplomatic or negotiated means to protect both that nation and its citizens but through the use of military force; and

3: The use of military force is kept to a “bare minimum.”

That scaling back of ambitions reflects powerful opposition. Abe’s Liberal Democratic Party isn’t united on the issue and its alliance partner, New Komeito, demanded the introduction of the three conditions as the price of its support for the measure. Opinion polls consistently show more than 50 percent of the public opposes the reinterpretation of the exercise of the right of collective self-defense. 

The rhetoric that has been used throughout the reinterpretation discussion – and by the prime minister himself when he announced the change Tuesday evening in Tokyo – underscores the power of those constraints. Abe framed the move as consistent with Japan’s status as a “peace state” and emphasized that any and all changes will be part of its strategy of “proactive pacifism.” Cynics may dismiss that as another empty slogan, but the fact remains that such language is needed to legitimate action to the public.

Those same cynics point out that the three conditions designed to limit Japanese action are undefined and potentially quite expansive. What is the “bare minimum” use of force necessary? Subsequent legislation will define that phrase, but its application will invariably be influenced by political considerations at the time of a crisis.

Any “adventurism” will encounter powerful headwinds in Japan. My study of Japan after the March 11, 2011 “triple catastrophe” suggests that there is no stomach among the Japanese for a high-profile “hard” security policy; there remains profound skepticism about the value of a military except in the defense of the homeland. Combine the Japanese ambivalence about engagement generally with a shrinking population that is aging and a military that would have to be significantly (and expensively) retooled to project power, and those headwinds reach gale force.

There is a temptation to see the return to power of Abe Shinzo as heralding a rightward shift in Japan. Resist it. Remember that Abe wasn’t the first choice to lead the LDP in the party election before the 2012 general election. The structure of the electoral system rewards large parties: in the absence of a unified opposition, the LDP took a disproportionate share of the seats in that ballot. (The LDP claimed more seats in 2012 than the DPJ did in its landslide win in 2009, even though the DPJ won more votes in the 2009 election.) Abe and the LDP won a mandate, first and foremost, to fix the economy, not lead a revanchist movement.

While Abe’s conservative views on security issues were well known, his first task remains an economic recovery. Failure to get the economy back on track will empower opposition to him within the LDP – and it is substantial. Foes within the party will likely use public protests against his security policy to help make the case for a change in the Prime Minister’s Office. If that is the case, change in Japan’s security policy may prove to have far greater impact than Abe and his supporters ever anticipated – and not in the way that they anticipated. 

Brad Glosserman is executive director of the Pacific Forum CSIS in Honolulu, Hawaii, which has provided policy-oriented analysis and promoted dialogue on regional security, political, economic, and environmental issues in the Asia-Pacific region for over 25 years. This article first appeared in the CSIS:PACNET newsletter here

Image: Wikicommons. 

TopicsSecurity RegionsJapan

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