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The weekly briefing, 27 January 2014


Africa: South Sudan government and rebel forces sign ceasefire agreement.

Americas: Falls in the Argentine peso threaten President Fernández’s government.

Asia and Pacific: India and Japan seek agreement on civilian nuclear cooperation.

Europe: Clashes between government and opposition turn violent in Ukraine as first deaths are reported.

Middle East: Coordinated attacks in Cairo, Egypt, kill at least six people.

Polar regions: International Maritime Organisation finalises draft Polar Code for Arctic shipping.


South Sudan government and rebel forces sign ceasefire agreement

After more than a month of fighting and thousands of casualties, the South Sudan government and rebel representatives signed a ceasefire agreement on 23 January. It was brokered by mediators from the East African regional trading bloc, the Intergovernmental Authority on Development (IGAD), in Addis Ababa. A key aim is to put into place a monitoring facility for the truce and enable unrestricted access to aid agencies to alleviate the humanitarian impacts of the violence.

The agreement marks the first notable progress since political crisis in country escalated into outright violence in mid-December 2013. Earlier attempts at negotiation failed, notably due to the controversial issue of detained members of the rebel forces. According to African reports, the South Sudanese government of President Salva Kiir has now agreed to release a dozen officials close to rebel leader and former vice president Riek Machar, though the timeframe for their release remains disputed. The fighting of the past five weeks has caused an estimated half a million civilians to flee their homes, as well as endangered the country’s oil industry after rebels temporarily took control of the fields. The conflict fuelled ethnic tensions, as Kiir’s government, led by the Dinka, fought off the mostly Nuer rebels.

It is hoped the ceasefire will pave the way for broader national political dialogue in South Sudan. However, concerns remain about individual groupings within the rebel movement, such as the so-called White Army, who may be unwilling to respect the ceasefire and may continue pursuing their own aims. The UN reported continued fighting in several areas of the country despite the ceasefire. International actors, including the United States and the EU, have welcomed the ceasefire while stressing the need to enforce adherence and implement a viable dialogue.

Other developments

Strikes at three of the world’s biggest platinum mines have stopped production in South Africa. On 23 January, workers at the Impala, Anglo American and Lonmin mines (employing up to 100,000 people in total) embarked on an indefinite strike. The move was designed to force their employers to the negotiating table after their demand to double the minimum monthly wage was rejected. This marks the largest strike by South Africa’s Association of Mineworkers and Construction Union (AMCU) since the 2012 wage protest in Marikana, where 34 workers were shot. The country’s deputy president, Kgalema Motlanthe, had announced on 22 January that the government would act decisively to enforce law and order in wage disputes. Another AMCU strike planned for 23 January, targeting the gold sector, was delayed after a court ruling.

Tensions further escalated in the Central African Republic (CAR) as new interim president Catherine Samba-Panza was sworn in on 23 January. The country’s first female leader, Samba-Panza was chosen by a national transitional council after former President Michel Djotodia resigned from office two weeks ago. The former president had resigned under international criticism for failing to stem the sectarian violence that has progressively worsened since the March 2013 coup, with a million people fleeing their homes, 100,000 of whom are being guarded by French troops around Bangui airport.

The Libyan Justice and Construction Party (J&C) announced its withdrawal from the government on 21 January. J&C is the political arm of the Muslim Brotherhood and the second largest party in Libya’s interim administration. Five of the party’s ministers, including those responsible for oil and the economy, announced their resignation after failing to win sufficient support for a motion to censure Prime Minister Ali Zeidan. The announcement came as it was revealed that clashes between tribes, government forces and Gaddafi loyalists in the south of the country killed at least 86 people and wounded at least 128 over the past two weeks. The clashes were sparked by a revenge attack by Tabu tribesmen, of African origin, against the Arab Awlad Suleiman tribe, in the former Gaddafi stronghold of Sabha.

On the radar

  • Tunisia’s new constitution is expected to pass, three years after the revolution, in a move hoped to mark the end of political deadlock.
  • The UN Security Council will consult on developments in Ivory Coast and its operation in the Central African Republic (BINUCA) as the official mandate ends.
  • Kenyan President Uhuru Kenyatta’s trial at the International Criminal Court is to be further postponed among controversy over witnesses.
  • Students plan to march in central Monrovia, Liberia, on 27 January, to demand that the University of Liberia be reopened.
  • Heightened tensions in Nigeria’s Rivers state are likely to cause politically motivated unrest in the coming weeks.


Falls in the Argentine peso threaten President Fernández’s government

On 22 and 23 January, Argentina experienced its largest currency depreciation since it defaulted on its sovereign debt in 2001. The value of the peso against the dollar slumped by almost 20% during the week of 20 January. The scale of the devaluation comes as a surprise given that the administration of President Cristina Fernandez de Kirchner has consistently rejected the possibility of a severe depreciation of the peso. Indeed, the main support base of her Front for Victory (FPV) party is comprised of middle and lower class citizens who do not possess the resources to hedge against such risk. As such, the Fernández government has blamed foreign speculators for triggering the depreciation. Following the Central Bank of Argentina (BCRA) decision to let the peso depreciate, the government announced that by 27 January currency controls would be relaxed and individuals would be permitted to buy dollars for saving purposes. Furthermore, it was declared that those making dollar purchases for travel reasons will be charged 20% tax, down from 35%.

In 2011, the Fernández government implemented tight currency controls in order to artificially prop up the peso. The country faces a 25% annual inflation rate and has relied on such unorthodox economic measures to curb capital flight. However, such policies have not proven successful, as the BCRA international reserves fell by 40% since Fernández took office in late 2011. Furthermore, it has also engendered the formation of a parallel black market dollar currency with a 70% breach over the official rate. The Fernández government hopes that the recent depreciation will alleviate the strain on international reserves and reduce the peso to dollar breach on the black market. Moreover, it is believed that it will incentivise the local agricultural sector to sell its harvests on the markets, thus in turn providing much needed foreign currencies.

The Fernández government loss of control over its currency comes at an especially tense moment. It was largely seen as impotent in the face of a nationwide police strike in December 2013 and currently faces an energy crisis (with some districts of the capital, Buenos Aires, still without electricity). In addition, Fernández has only given one public appearance in the last month and at time of writing has not yet made a statement about the recent depreciation. The opposition has severely criticised the government for employing weak measures that fail to address the main problem of inflation. If the Fernández populist economic model continues to prove unsustainable, the government will be forced to seek alternative measures to sustain current fiscal expenditures ahead of the October 2015 presidential election. However, the deregulation of currency controls might lead to a surge in Argentines switching their deposit accounts from pesos to dollars, which would result in the peso and the BCRA international reserves being weakened further still.

Other developments

The FIFA delegation has said it was optimistic about Brazil’s capacity to hold the 2014 football World Cup, despite serious shortcomings. Although initially due to be completed by the end of 2013, five out of the twelve Word Cup stadiums remain unfinished. Another concern is the telecommunications network, with a recent report highlighting the inability of current infrastructure to manage the increase in mobile and internet usage during the event. Brazilian President Dilma Rousseff will be hard pressed to respond to these shortcomings in the coming months.

Columbian security forces have attacked a Revolutionary Armed Forces of Colombia (FARC) camp. The offensive against FARC’s Alfonso Castellanos Mobile Column was launched on the evening of 18 January in a rural part of the municipality of Tame, in the northeast of the country. The airstrikes targeted the FARC unit’s leader, Omar Guevara Rivera, who is believed to have fled to Venezuela after the assault. Under President Juan Manuel Santos, the Columbian government is currently negotiating the peaceful integration of FARC into the political system – a process that is continuing without a bilateral ceasefire and amid ongoing combat.

The execution of a Mexican convict in the US state of Texas has strained the bilateral relationship. On 22 January, Edgar Arias Tamayo, a Mexican national, was executed by lethal injection after spending 20 years on death row in Texas for the 1994 murder of a policeman in Houston. Tamayo was one of the 51 Mexicans included in the resolution passed by the International Court of Justice in 2004 that demanded a review of the cases for a failure to respect the right of consular assistance. The Mexican and US governments had both pressed the Texan court to revise its judgement, but to no avail. The Tamayo case highlights concerns over the treatment of Mexican prisoners on death row in the United States.

On the radar

  • The second Summit of the Community of Latin American and Caribbean States (CELAC) will take place in Havana, Cuba, on 28 and 29 January.
  • Presidential elections are to be held in Salvador and Costa Rica on 2 February.
  • The International Court of Justice will rule on a maritime frontier dispute between Peru and Chile.
  • Mexican President Peña Nieto is to meet US President Obama and Canadian Prime Minister Harper in Toluca, Mexico, on 19 February.
  • Demonstrations against tax increases are planned in Tegucigalpa, Honduras, on 27 January.

Asia and Pacific

India and Japan seek agreement on civilian nuclear cooperation

Japan’s Prime Minister Shinzo Abe has met with his Indian counterpart, Manmohan Singh, to discuss civilian nuclear cooperation. Abe has said in various statements that negotiations have gained momentum and both countries hope to reach an early agreement. Such an agreement would likely open up the Indian market to Japanese investors and companies and a joint working group has already met to explore ways to cooperate. Both sides have been keen to expand economic relations.

Such diplomatic activity from Japan can be seen, at least in part, in relation to its rivalry with China. Both India and Japan share territorial disputes with China and analysts have raised the mutual benefit of countering a rising China. Japan and India have been keen to discuss defence links in the wake of China sending surveillance aircraft to the disputed East China Sea on 24 January. It is therefore noteworthy that India has also invited Japan to the Malabar joint naval exercises between the Indian and US navies, which takes place in the Bay of Bengal once a year.

Abe’s visit also comes shortly after his courting of African countries last week – a continent where Chinese investment is already very high and increasing still. Abe’s measures against Chinese power are not merely diplomatic; on 25 January, Abe publicly proposed changing the government’s interpretation of Japan’s constitution, which restrains the Japan Self-Defence Forces from assisting allies in combat overseas.

Other developments

An agreement has been reached in Kuala Lumpur between the Philippines and the Moro Islamic Liberation Front (MILF). The agreement marks the fourth and final part of a roadmap for peace, and paves the way for a comprehensive peace treaty after a 40-year MILF guerrilla campaign. The agreement details how rebels will surrender their weapons in exchange for self-determination in parts of the south Philippines. Tens of thousands have been killed in this separatist fighting and analysts are very optimistic this will now be brought to an end.

The UN High Commissioner for Human Rights, Navi Pillay, has called on Burma/Myanmar to carry out a ‘full, prompt and impartial investigation’ into reports that Rohingya Muslims have been killed in attacks by Buddhists in Myanmar’s Rakhine state. Pillay revealed that the UN has credible information that 48 Rohingya Muslims were killed in early January. Naypyidaw have rejected these claims. Rakhine state has seen several outbreaks of violence against the Rohingya Muslims since June 2012, and it would be surprising if these reports were not genuine.

Eleven people believed to be members of a militant group of Uighurs have been killed while illegally crossing into Kyrgyzstan from China. Kyrgyz border guards reported on 25 January that the evidence suggests they belonged to a militant organisation of Uighur separatists. The Uighurs are a Turkic ethnic group living primarily in China’s Xinjiang region. Kyrgyzstan, Tajikistan, Uzbekistan and Kazakhstan are members of the Shanghai Cooperation Organisation which is jointly led by China and Russia and who believe militant Islamists pose a major threat to regional security.

On the radar

  • China’s ambassador to Burma/Myanmar says Beijing will send an invite to opposition leader Aung San Suu Kyi for an official visit.
  • Campaigning continues for the election of Tokyo’s governor, which is essentially seen as a referendum on nuclear power.
  • Thailand’s constitutional court has ruled that the scheduled 2 February election can only be postponed if ongoing protests are brought to an end and there is no boycott of the election.
  • Taiwan’s President Ma Ying-jeou will undertake an eight-day diplomatic tour of Sao Tome and Principe, Burkina Faso and Honduras, which are some of the few African countries that still recognise Taiwan.
  • The opposition Bangladesh Nationalist Party plan to hold a peaceful procession on 29 January in Dhaka.


Clashes between government and opposition turn violent in Ukraine as first deaths are reported

Protests in Ukraine worsened this week as the recently passed anti-protest legislation came into force on 20 January. Two talks between the government and opposition movement broke down. However, after the third round of talks on 24 January, President Viktor Yanukovych, hoping to appease the demonstrators with concessions, promised a government reshuffle, as well as an amnesty for dozens of detained activists and changes in the anti-protest legislation. At the same meeting with religious leaders, the Ukrainian president also announced that a special parliament meeting would be held on 28 January to push through these changes.

The protest movement has now spread to nearly half of Ukraine, particularly in western Ukraine where Yanukovych is generally unpopular and there is strong support for the European Union. There, protestors seized government buildings and a governor loyal to Yanukovych resigned. The protests have built momentum over the last week. At least two people died and hundreds were injured during violent clashes between police and protestors on 22 January. After a 24-hour ceasefire on 23-24 January, the Ukrainian government hoped to appease the protest movement with concessions and an announcement by the general prosecutor that if protest actions were halted, the courts would treat those who had been arrested leniently. Unconfirmed local media reports suggest that Yanukovych may have also agreed to the release of all political prisoners over the weekend. However, these proposed concessions were largely dismissed by the opposition and protesters have since erected more street barricades around the presidential headquarters and occupied the Ministry of Agriculture building. The demonstrators have demanded the dismissal of Prime Minister Mykola Azarov and the resignation of Yanukovych. The movement began as a protest against the Ukrainian government’s U-turn over an association agreement with the EU but has now widened to a protest against the perceived misrule of the Ukrainian leadership.

A statement released by MP and UDAR party leader Vitali Klitschko, a prominent opposition leader, claimed that only international mediation could resolve the standoff between the government and opposition. Other countries have continued to condemn Yanukovych’s actions and pressure is mounting on the Ukrainian government. Both the French and German foreign ministers have heavily criticised Azarov’s government for allowing the security forces to open fire on protestors and summoned their respective Ukrainian ambassadors. However, the European Union members have yet to agree on whether to follow the United States in issuing sanctions against Ukraine. EU Commissioner Štefan Füle travelled to Kiev on 24 January to mediate between the government and opposition, while the EU foreign policy representative, Catherine Ashton, is expected to visit next week.

Other developments

On 20 January, Vilayat Dagestan, an Islamic group from the North Caucasus, posted a video in which they issued threats of terrorist attacks targeting the hosts and visitors to the Sochi Winter Olympics. In the video, addressed to President Vladimir Putin, the terrorists warned that they may attack the Olympics in revenge for the deaths of Muslims around the world. The group originates from Dagestan, which has seen years of fighting between Russian security forces and separatist groups. Meanwhile, the German, Hungarian, Slovenian and Italian Olympic committees have received terrorist threats in emails and letters this week. However, after analysing and assessing a letter targeting Hungarian Olympians, the Hungarian Olympic Committee announced that the letter had been found to be non-threatening. The German, Slovenian and Italian Olympic committees are working with their authorities to assess the risk to their security.

Silvio Berlusconi returned to Italy’s political stage on 19 January after a deal with the leader of Italy’s centre-left Democratic Party, Matteo Renzi. The former prime minister and head of the opposition Forza Italia party held lengthy talks with Renzi before striking an agreement on electoral and constitutional reform. The present Italian electoral system has left the country with weak coalitions in recent years. However, the deal between the Democratic Party and Forza Italia has given Renzi a majority for these reforms, though it has divided the Italian coalition and angered supporters of the Democratic Party.

The Georgian foreign ministry released a statement on 21 January accusing Russia of moving its border with Abkhazia, a breakaway region from Georgia and presently under Russian occupation. The Georgians argue that Russia moved the border by 11 kilometres for the benefit of the Sochi Olympics and therefore believe that the move will last until at least when the Paralympic Games conclude on the 21 March. Moscow officials have yet to confirm any modifications to the border zone.

On the radar

  • The EU-Russia Summit will take place in Brussels on 28 January.
  • Catherine Ashton will hold EU-China Strategic Dialogue with Yang Jiechi, the Chinese State Counsellor, in Brussels on 27 January.
  • Italy, Germany and the Netherlands have scheduled government bond sales this week in a bid to attract foreign investment.

Middle East

Coordinated attacks in Cairo, Egypt, kill at least six people

Four separate explosions in Cairo, Egypt, targeted the police headquarters, a metro station, a police station and a cinema throughout 24 January. Reports indicate that at least six people were killed and an unconfirmed number of people injured. The previous day, five policemen were killed after masked gunmen targeted a security checkpoint at Beni Suef, south of Cairo.

Militants have targeted Egyptian security forces across Egypt since a military coup deposed President Mohamed Morsi in July 2013 but attacks have been steadily increasing since September 2013. Previous significant incidents include the failed assassination attempt on the interior minister in September 2013 and the car bombing at a security headquarters in Mansoura in December 2013. Morsi’s Muslim Brotherhood has been outlawed since the coup and Egyptians voted in favour of a new constitution in January 2014, replacing one that was drafted up by Morsi’s Islamist government in 2012. It is likely that the coordinated bombings in Cairo were carried out by militants who reject the recent constitution and do not recognise the appointed interim government. The scale of the coordinated attacks in Cairo represents a significant increase in the capability of militants within the country. Ansar Beit al-Maqdis (the Champions of Jerusalem), a group based primarily in the Sinai, have claimed responsibility for the attacks.

One of the explosions targeted a cinema and another a metro station, and it is possible that militants are now willing to target civilians and may also seek out soft targets elsewhere in the country. However, further attacks of this nature will likely continue to primarily target government and security assets over the coming weeks. Moreover, clashes between pro-Morsi demonstrators and security forces can be expected in the capital following the anniversary of the 2011 revolution, which removed Egypt’s long-time President Hosni Mubarak from power.

Other developments

At least 16 people were killed in two car bombs at the Bab al-Hawa border crossing between Syria and Turkey on 20 January. The crossing is controlled by the Islamic Front, a Syrian opposition alliance that has been fighting with the Islamic State of Iraq and the Levant (ISIL) in the north of Syria. It is unclear who carried out the attack but opposition fighters have blamed the recent increase in the use of car bombs in the north of the country on the al-Qaeda affiliated group ISIL. The explosion occurred on the Syrian side of the border and forced the closure of the Turkish border. Further violence in the north of Syria is likely in the short term as a coalition of Islamist groups fight to oust the largely foreign presence of ISIL from the area.

Clashes between Shi’a Houthi rebels and Sunni tribesmen in northern Yemen left at least 12 people dead on 19 January. Overnight fighting between rival sects broke out as Houthi rebels attempted to capture a mountain in Omran province. It is reported that eight Houthi rebels and four Salafi tribesmen were killed. Violence between Houthi rebels and Salafi Islamists has plagued Omran and Saada provinces and the north of Yemen. This latest incident of violence undermines a ceasefire between the two groups. Houthi minorities accuse the Yemeni government of discrimination and reconciliation efforts by the interim government have so far failed to end the violence.

A bus carrying Shi’a pilgrims was targeted in Balochistan province, southwest Pakistan, on 21 January. At least 29 people were killed as they travelled back from neighbouring Iran, home to many Shi’a pilgrimage sites. Sunni militant group, Lashkar-e-Jhangvi, have since claimed responsibility for the bus bomb. The group has ties to the Pakistani Taliban and has previously targeted Shi’a groups in Balochistan province. Sit-in demonstrations in the provincial capital, Quetta, by the Shi’a community have prompted a government response to the situation in Balochistan. The Pakistani government has launched a military operation against Lashkar-e-Jhangvi and has also suspended the movement of pilgrims until the security situation improves.

On the radar

  • The Organisation for the Prohibition of Chemical Weapons (OPCW) is to announce the commercial destruction facilities that will be responsible for destroying chemical weapons shipped out of Syria.
  • Syrian peace talks will conclude in Geneva this week, with humanitarian issues expected to be high on the agenda.
  • The adjourned trial of Egypt’s former President Mohammed Morsi is to resume on 1 February.
  • Demonstrations are possible across Yemen on 11 February to mark the anniversary of the 2011 civil uprising.
  • Kuwait City will celebrate the 1961 founding of the state on 25 February.

Polar regions

International Maritime Organisation finalises draft Polar Code for Arctic shipping

On 24 January, the International Maritime Organisation (IMO) finalised the draft of a ‘Polar Code’ of safety and environmental rules to regulate shipping traffic in the Arctic. Thus far, no such special regulation exists for the Arctic, in contrast to the Antarctic. Given the rapid increase in the number of ships exploiting the Northern Sea Route from Scandinavian waters to Asia that has been seen over the past few years, environmental groups such as the WWF in Norway have been campaigning for the adoption of new regulations. Head of WWF Norway Nina Jensen engaged in a fierce battle of opinions with shipping magnate Felix Tschudi at an Arctic conference in the Norwegian town of Tromso in the days immediately running up to the finalisation of the draft. Their opposing stances neatly illustrate the various concerns of businesses and environmental organisations over the exact form that regulation should take.

Jensen, together with other environmentalists, expressed two main concerns that potential regulation should seek to address. The first focuses on the use of heavy fuel oil, which is in common use in global shipping but could have disastrous effects on Arctic habitats in the case of spillage or leakage. The second and related concern seeks to ensure that all vessels traversing Arctic shipping routes be specially equipped for extreme northern conditions; the desired regulation would require that all ships entering Arctic waters have thickened hulls, crews fully trained in Arctic conditions, and be subject to various speed limits. Many in the business community, such as Tschudi, object to these regulations, arguing that the measures would make Arctic shipping unprofitable in comparison to the existing route through the Suez Canal.

For the moment it appears that the shipping industry has won the debate. The final draft published on 24 January did not include a ban on the use of heavy fuel oil and, arguing that retreating sea ice had made the shipping season sufficiently safe, had no regulation as to hull thickness or speed limits. Environmentalists blamed the lobbying activities of the shipping and cruise industries, which they accuse of exerting pressure on the IMO to pursue their cause with no concern for environmental consequences. The environmental organisations involved will likely now refocus their attention onto the Maritime Safety Committee and the Marine Environment Protection Committee, the two international bodies whose approval will have to be obtained before the Polar Code becomes international law.

Other developments

Norwegian Prime Minister Erna Solberg declares ‘oil will be part of the future’ in response to environmentalists from the Nature and Youth Organisation who handed her a box containing two thousand signatures against Arctic oil drilling on 20 January. According to the environmentalists, the signatures are evidence of popular opposition to Arctic drilling. Meanwhile, in an indication that the prime minister’s words are more than simply rhetoric, the Norwegian Petroleum Directorate announced on 21 January that a record number of oil companies have applied for production licenses on the Norwegian continental shelf, and 65 have been awarded. The majority (38) are in the North Sea but of the others a high number are in the Arctic.

The Director of the Russian Institute of Political and Military Analysis, Alexander Sharavin, has asserted that Russia’s current military presence in the Arctic suffices for the protection of national interests in the region. This is in contrast to recent declarations from Russian President Vladimir Putin that Moscow should step up its involvement in the region. Professor Sharavin said that divisions of the Northern Fleet together with Russian paratroopers already provide the necessary military capabilities. Sharavin also used his speech, at the roundtable discussion group ‘Interests of National Defence in the Arctic’, to press for a speedy finalisation of Russia’s territorial claims on the Arctic shelf, which it has until the end of 2014 to present to the UN Convention on the Law of the Sea.

Sovcomflot, Russia’s largest shipping company, officially launched the Veliky Novgorod on 21 January. The ship will become the largest carrier in Gazprom’s fleet to transport Liquified Natural Gas (LNG) from fields in the Arctic to foreign markets. The huge tanker will be followed by a sister ship, the Pskov, which is due for delivery in September 2014. The ships indicate that Gazprom, after years of sluggish or poorly targeted investment, may be getting serious about drilling more gas in the Arctic and diversifying its customer base, which for the last decade has been almost exclusively located in European markets.

On the radar

  • Canada’s Arctic Policy Commission is to present its report to the Canadian parliament on 30 January with recommendations on what the state should do to prepare for and foster Arctic development.
  • Flights to Scandinavian countries and Russia may face disruption, as industrial action has been called by ATCEUC, the European representatives of 28 unions and over 14,000 controllers.
  • Academics and engineers will meet in London from 4-5 February at the ‘2nd IMarEst Arctic Shipping and Technology Conference’. The discussion will focus on how to prepare vessels for Arctic conditions while ensuring shipping remains profitable.
  • Scientists and glaciologists will meet in Ottawa from 3-5 February to discuss the modelling and mapping of Arctic Glaciers.

Analysts: Laura Hartmann, Tancrède Feuillade, Gary Chan, Claudia Wagner, Daniel Taylor, Patrick Sewell and Chris Abbott.

Bradburys Global Risk PartnersPublished with intelligence support from Bradburys Global Risk Partners, www.bradburys.co.uk.

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