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Daily News Analysis 17-08-2015

S.NO.

NEWS ITEM

SYLLUBUS

ESSENCE OF THE ARTICLE

1.         

 

PM makes a statement with mosque visit (Pages 1 and 12)

a)     I.R

a)     The UAE leadership broke protocol to welcome PM Modi, with Crown Prince Sheikh Mohammed Bin Zayed Al Nayhan of Abu Dhabi turning out with five of his brothers to greet him at the airport in a rare gesture.

2.

India, Bangladesh to fight fake currency (Pages 1 and 12)

a)     I.R

a)     Indian and Bangladeshi security agencies have agreed to work in close coordination to control the smuggling of counterfeit currency notes, posing a threat to national security.

3.

India summons Pakistan envoy, protests LoC firing (Page 1,12)

a)     I.R

a)     The govt summoned High Commissioner Abdul Basit to register Indias protest against unprovoked firing by Pakistani troops on the Line of Control since Aug 8.

4.

Made-in-India  vehicles for UN mission in Mali (Page 13)

a)     I.R

a)      In a sign of increasing Indian defence exports in the global market, Tata Motors has supplied 520 vehicles to the UN Multidimensional Integrated Stabilisation Mission in Mali.

5.

War embers that continue to simmer (Page 10)

a)     International

a)    In considering the Chinese invitation to anniversary celebrations of V-J Day, India will have to disentangle the historical and contemporary dimensions. While there is good reason to participate, India needs to ensure that the event does not stoke Asian nationalisms.

6.

Sri Lanka heads to the polls (Page 14)

a)     International

a)     On Aug 16, the stage was set for over 1.5 crore Sri Lankan voters to elect their representatives to the 225-member Parliament. The country on Aug 17 will witness its eighth general election in the last 37 years.

7.

China, Russia set for naval assertion in Sea of Japan (Page 14)

a)     International

a)     China and Russia are stepping up their military collaboration by holding another round of naval exercises (this time in the Sea of Japan), following recent measures adopted by Tokyo that could deepen its military ties with US.

8.

Iran submits nuclear records to IAEA (Page 14)

a)     International

a)     The UNs atomic watchdog has confirmed that Iran has submitted documents linked to its past nuclear activity, a key condition of a probe into suspected efforts to create nuclear arms.

9.

A last chance for Syria (Page 11)

a)     International

a)     The latest proposal from Iran (backed by Russia) offers the war-devastated nation a glimmer of hope.

10.

Go in for organic farming: LS panel (Page 13)

a)     National

a)      A statutory committee of Parliament has told the Union govt that a switch to organic agriculture could end the problems of agrarian distress for farmers and toxic food and groundwater consumption for consumers.

11.

A bank account for Mary (Page 11)

a)     National

b)     Social issue

a)    The PMJDY celebrates success on its website, but thousands of members remain outside the banking system. This wont change unless the scheme alters both design and implementation.

12.

On a recovery path (Page 16)

a)     National

b)     Economy

a)    The Reserve Bank of Indias inflation target of 6 percent in January 2016 looks very much achievable.

13.

China yuan to move both ways, more adjustments unlikely (Page 15)

a)     Economy

a)     Official said that Chinas move to weaken the yuan last week could head off further similar adjustments, and the yuan is likely to move in both directions as the economy stabilises.

 

S.NO.

NEWS ITEM

SYLLUBUS

BACKGROUND

IMPORTANT POINTS

1.         

 

PM makes a statement with mosque visit (Pages 1 and 12)

a)     I.R

a)     India – UAE relations

b)     Security cooperation

c)     Investment ties

a)     In the UAEs trip, the high point of first days engagement was Modis visit to Sheikh Zayed Grand Mosque, the worlds third largest mosque.

b)     During talks with the UAE leadership, Modi is expected to discuss energy security (negotiation of long-term oil supply contracts), security cooperation and investment ties.

c)     Officials admitted that the visit would be great to the domestic constituency. On the whole, the UAE visit will have a huge impact on Indian honour and Muslims, though the PM has visited several Central Asian countries and Bangladesh in recent past.

2.

India, Bangladesh to fight fake currency (Pages 1 and 12)

a)     I.R

a)     India – Bangladesh relations

b)     Unlawful Activities Prevention Act (UAPA)

 

a)     Indian and Bangladeshi security agencies have agreed to work in close coordination to control the smuggling of counterfeit currency notes, posing a threat to national security. They have signed a MoU to this effect.

b)   The Indian side gave a presentation on the magnitude of the threat posed by high-quality fake currency notes and shared the modus operandi adopted by masterminds. It said Such acts have been included as terror offences under UAPA.

c)     The team said that fake notes were being used by some state agencies to fund terror activities in India. Indian agencies have strong reasons to believe that high-quality fake notes being pushed into country are being printed in Pakistan.

d)     The Bangladesh agencies also gave a presentation on the adverse impact of fake notes on economy. In Bangladesh, such notes are being used to fund human and drug trafficking, besides anti-state activities.

e)   The Bangladeshi delegation accepted a proposal from the Indian side to help establish state-of-the-art facilities for examination of fake currency notes and maintain a digital record of seizures and analysis.

3.

India summons Pakistan envoy, protests LoC firing (Page 1,12)

a)     I.R

a)     India – Pakistan relations

b)     Border disputes

c)     Line of Control (LoC)

d)     International Border (IB)

e)     Director-General Military Operations (DGMO)

a)     The govt summoned High Commissioner Abdul Basit to register Indias protest against unprovoked firing by Pakistani troops on the LoC since Aug 8. Pakistan had summoned Indian Deputy High Commissioner in Islamabad to protest what it claimed to be unprovoked firing from the Indian side.

b)     According to defence officials, Pakistani troops targeted six sectors of the LoC on Aug 16: Poonch, Balakote, Hamirpur, Sujiyan, and Mandi, all falling under Poonch district; and Manjakot sector of Rajouri district.

c)     Basit told reporters that Pakistan too was concerned over close to 70 ceasefire violations from this side of the LOC and IB in July and Aug.

d)     During the upcoming talks between NSA Ajit Doval and his Pakistani counterpart Sartaj Aziz on Aug 23, both sides are expected to discuss the DGMO meeting that was agreed to when PMs Modi and Nawaz Sharif met in Ufa.

e)     Sources said that Pakistan wants to broaden the scope of the talks by also discussing a new mechanism for dealing with LoC firing. MEA said that the issue of firing had already been taken up at the DGMO level over the past few days.

4.

Made-in-India  vehicles for UN mission in Mali (Page 13)

a)     I.R

a)     Indias defence exports

b)     United Nations Multidimensional Integrated Stabilisation Mission (MINUSMA)

c)     Make in India initiative

 

a)      In a sign of increasing Indian defence exports in the global market, Tata Motors has supplied 520 vehicles to the UN MINUSMA in Mali, including ambulances, jeeps, water and fuel tankers, recovery and refrigeration trucks and buses. Tata Motors exports its range of specialised defence vehicles to SAARC, ASEAN and African regions.

b)    Recently, Tata Motors won a contract to supply 1239 units of High-Mobility Vehicles with material handling cranes and 500 units of General Service vehicles to Myanmar Army in addition to signing cooperation agreement with Malaysia.

c)     With India embarking on a major defence modernisation drive and govt opening up the sector for private participation with ambitious Make in India initiative of PM Modi, private companies are increasingly investing in lucrative but highly competitive defence sector.

5.

War embers that continue to simmer (Page 10)

a)     International

a)     Second World War

b)     China – Japan disputes

c)     East China Sea

d)     Japans Liberal Democratic Party (LDP)

e)     Chinese Communist Party

a)     Wars are invariably associated with dates. Yet the global conflict that we call the Second World War is surprisingly difficult to date, especially in Asia. In some ways, the Second World War in Asia has yet to end. The controversies over the war are now overlaid on current geopolitical competition and they are mutually aggravating.

b)     In a time of tension with Japan, it is not surprising that China has decided to mark the 70th anniversary of Victory over Japan (V-J) Day with a massive military parade on Sept 3. It is equally unsurprising that Japan has accused China of politicising the event. More interesting is Beijings decision to invite contingents from other countries (including India) to join the parade.

c)     From Indias standpoint, the invitation presents a delicate choice. Given the participation of an Indian military contingent as well as the President of India in the celebrations in Moscow earlier this year, it would seem churlish to skip the Chinese parade. At the same time, India is mindful of Japanese concerns on this issue.

d)     Over the past year, India has sought to work closely with Japan on matters relating to security - not just bilaterally but also with other countries such as the US and Australia. The tightening strategic ties between India and Japan are obviously spurred by common concerns about Chinas muscle-flexing in Asia.

e)     The historical case for Indian participation in Chinese parade is rather strong. During the Second World War, China and India were military allies against Japan. The foundations of this forgotten alliance were laid in early 1930s, when Indian nationalists strongly supported China during the Japanese aggression in Manchuria and also denounced the League of Nations for averting its eyes. Political support for China grew stronger from 1937 onwards.

f)     The problem is continuing conflict over memory and history of the war. The Chinese and the South Koreans feel that Japan has never really come to terms with its past aggression nor genuinely paid for its brutal war-time record. Japanese leaders have apologised on several occasions, but these are seen as evasive and insincere. Given the make-up of post-war Japanese governments, this is understandable.

g)     However, it is interesting to note that disputes over Japans war-time conduct were not prominent in the early post-war period. When Japans ties with South Korea were normalised in 1965, Seoul accepted a reparations agreement, though on American pushing. When ties with China began to be normalised from 1972, Beijing dropped question of reparations altogether. Why then has Japans war-time conduct become such a charged issue in more recent decades?

h)     On the one hand, the LDP has sought more strongly to blur Japans record of aggression and brutality during the war. Paradoxically, this is because the Japanese people have deeply internalised notions of pacifism and opposition to the nationalism and patriotism that are seen as drivers of past aggression. This inwardly driven agenda naturally impacts on how other countries perceive Tokyos apologies and denials.

i)    On other hand, with demise of Marxism as a state ideology in China, consciousness of the war has gathered greater public salience. The version of nationalism purveyed by the Chinese Communist Party is a cocktail of several ingredients, including the memory of the Japanese jackboot. Further, as China and Japan are locked in dispute over islands in the East China Sea, the history and memory of those years have acquired additional layers of complexity.

j)     In his carefully prepared statement on 70th anniversary, Japans PM Abe sought to address multiple audiences. He used words such as aggression, colonial domination and deep remorse, but couched them as observations on previous apologies that he was reaffirming. He also spoke of the devastation visited by Japan on other Asian countries, but only after talking of Japans own war-time suffering.

k)     Yet, his affirmation of the need for remembrance would have carried more conviction, if he had addressed Japanese agency in kick-starting the war rather than presenting it as a victim of world historical forces. Both Beijing and Seoul were quick to criticise speech as inadequate. The history wars look set to continue.

l)     So, in considering the Chinese invitation, India will have to extract the historical and contemporary dimensions of this anniversary. While there is good reason to participate, we also need to ensure that the event does not provide further fuel to Asian nationalisms.  Unless history ceases to be used either to rouse popular passions or club erstwhile adversaries into contrition, the Second World War in Asia will never really end.

6.

Sri Lanka heads to the polls (Page 14)

a)     International

a)     Sri Lankas internal issues

b)     United National Party (UNP)

c)     United Peoples Freedom Alliance (UPFA)

d)     Sri Lanka Freedom Party (SLFP)

a)     On Aug 16, the stage was set for over 1.5 crore Sri Lankan voters to elect their representatives to 225-member Parliament. The country on Aug 17 will witness its 8th general election in the last 37 years.

b)     In tune with Sri Lankas electoral tradition, no single political formation is expected to win a majority this time too. After the adoption of the 1978 Constitution providing for proportional representation, a party could muster a majority on its own only on 2 occasions. While the UNP secured 125 seats in the 1989 polls, its main rival (UPFA) led by the SLFP, won 144 seats five years ago.

c)     In this election, Ranil Wickremesinghe (UNP leader and PM) and Mahinda Rajapaksa (UPFAs poll team leader and former president) are contesting from the electoral districts of Colombo (Western Province) and Kurunegala (North Western Province).

7.

China, Russia set for naval assertion in Sea of Japan (Page 14)

a)     International

a)     China – Russia relations

b)     Military cooperation

c)     US Pivot to Asia

d)     Sea of Japan

e)     Mediterranean Sea

f)     Peter the Great Gulf

 

a)     China and Russia are stepping up their military collaboration by holding another round of naval exercises (this time in the Sea of Japan), following recent measures adopted by Tokyo that could deepen its military ties with Washington.

b)     The drills are an extension of Joint Sea-2015 (I), another naval exercise that the two countries had held in May in the Mediterranean Sea, on the doorstep of Europe, and in the backdrop of crisis in Ukraine.

c)     Apart from Sea of Japan, these drills will also take place in the Peter the Great Gulf and waters off the Clerk Cape.

d)     The Joint Sea-2015 (II) is being timed with the growing militarisation of Pacific under President Obamas Pivot to Asia doctrine, which empowers the US Pacific Command to draw nearly two-thirds of all American forces under its wing.

e)     In tandem, Japan is taking legal measures that could detach Tokyo from its postwar pacifism, and, instead, allow it join forces with the US in operations that do not necessarily pose a direct threat.

8.

Iran submits nuclear records to IAEA (Page 14)

a)     International

a)     Irans nuclear programme

b)     Iran – P5+1 nulcear deal

c)     International Atomic Energy Agency (IAEA) 

a)     The UNs atomic watchdog has confirmed that Iran has submitted documents linked to its past nuclear activity, a key condition of a probe into suspected efforts to create nuclear arms.

b)     IAEA signed a road map with Iran in July to investigate its nuclear programme, as part of an overall accord with major world powers.

c)     The historic deal is aimed at curbing Irans nuclear activity in exchange for relief on painful economic sanctions.

9.

A last chance for Syria (Page 11)

a)     International

a)     Syrian war

b)     Islamic State (IS)

c)     Syria and Iraq crisis

d)     Kurdish forces

e)     Syrian Kurdish militias (YPG)

f)     Turko-Kurdish PKK

a)   In early August, the Foreign Ministers of Iran and Syria and Russias Deputy Foreign Minister met in Tehran to discuss the Syrian war. The Iranians (now strengthened by the nuclear deal) presented a plan for a solution to the fratricidal Syrian war.

b)     Irans plan has four steps: 1. Forge an immediate cease-fire; 2. Create a national unity government; 3. Rewrite Syrias Constitution with a more expansive inclusion of minorities; 4. Hold national elections under international supervision. These points are not new. The call for a ceasefire has been on the agenda since 2011, and the other steps have been discussed in the UN and in various regional gatherings over the past four years.

c)     What is novel is that the proposal comes from Iran, with Russian and Syrian backing. The idea of a national unity govt implies that President Bashar al-Assad would not have to withdraw from politics. But it does suggest that Damascus has softened in its view that President Assad must be allowed to serve out his new term in office.

d)     Western capitals should look at this proposal as an olive branch. This proposal does not roll out a complete path toward peace, but it does open the door to negotiations. Other Western approaches toward Syria have failed. The most recent attempt to create a moderate rebel force to take on both the IS and the Assad govt collapsed. The al-Qaeda affiliated Jabhat al-Nusra easily defeated Western-trained Division 30, seizing its arms and killing many of its fighters.

e)     Disorder has now erupted in Syrias north, where Turkish jets bomb the positions of the Syrian Kurdish militias (YPG), which are supported by the guerrilla wing of the Turko-Kurdish PKK. In exchange for this Turkish fight against the Kurdish gains, US drone aircraft now use Turkish airfields to bomb IS positions.

f)     The West has made a significant bet. Aerial bombing of IS has not yielded major gains on the ground. As an investigation from Airwars (a collaborative, not-for-profit transparency project, aimed both at tracking and archiving the international air war against IS, in both Iraq and Syria) shows the allied bombing has resulted in considerable civilian casualties, offering IS propaganda against the idea of the West as deliverance.

g)     Meanwhile, the Turkish bombing of the YPG-PKK has pushed the Kurds to seek a new arrangement with Assad govt. Senior YPG officials are warm to the Iranian proposal for a national unity govt. It would give them leverage against the Turkish assault. Turkey has been unable to secure its strategic ambitions. The West has been cool to its call for a no-fly zone in northern Syria.

h)     The IS remains in control of its swathe of territory across northern Iraq and Syria. Neither the Western air strikes nor Iraqi military advances have been able to break through and clear IS from its major urban centres. Western strategy to contain and defeat the growth of IS and al-Qaeda in Syria has utterly failed. Matters are so poor that USs military and intelligence community has now taken to debate which is more of a threat - IS or al-Qaeda.

i)     Meanwhile, Syrian govts forces suffer a severe crisis of manpower. Reliance upon Lebanese and Iraqi militias as well as Iranian specialists is not enough. Assad admitted that his forces are exhausted. But so are the troops of the rebels. The IS cannot any longer easily recruit from reservoir of international jihadis. Access to Syria is harder than it was. The war is at a standstill though it does not seem like that for fighters who are at edge of their territories.

j)     On August 3, Irans Foreign Minister Javad Zarif called for a regional discussion to solve regional problems. Wars in Syria and Yemen (alongside the spread of extremist groups such as IS) poses a significant problem to the region. He went to Damascus to discuss the overture directly with President Bashar al-Assad.

k)     The formation of the Syria Contact Group (Egypt, Iran, Saudi Arabia and Turkey) in 2012 was one such moment. This is another. The West and its Gulf Arab allies should take demarche from Iran seriously. It might be last chance for Syria.

10.

Go in for organic farming: LS panel (Page 13)

a)     National

a)     Organic farming

b)     Organic Finance and Development Corporation

c)     Soil health

d)     Minimum Support Price (MSP)

a)      A statutory committee of Parliament has told the Union govt that a switch to organic agriculture could end problems of agrarian distress for farmers and toxic food and groundwater consumption for consumers.

b)     It has also recommended establishing an Organic Finance and Development Corporation for farming. It has set a 6 month time frame for govt to act on its recommendations.

c)     The committees findings point out to a severe decline in soil health that will take three to five years to restore in areas where chemical farming is replaced with organic farming.

d)     It pointed out to the fact that soil health in Punjab had severely deteriorated over the decades. The unscientific use of NPK (Nitrogen, Phosphorous and Potassium) based nutrients reached up to an alarming level of 39:9:1 in Punjab against the ideal ratio of 4:2:1. National average ratio was 7:3:1, leading to a situation in which the current agricultural yield against the use of one kg of NPK-based nutrients was down from 50 kg to barely 10 kg.

e)     The committee had also suggested fixing higher MSP for organic crops and making the Ministry of Agriculture the nodal ministry for all related activities from irrigation, certification of organic produce to standards and patents, which currently come under different Ministries.

11.

A bank account for Mary (Page 11)

a)     National

b)     Social issue

a)     Pradhan Mantri Jan Dhan Yojana (PMJDY)  

b)     Financial inclusion

c)     RuPay card

d)     Aadhaar

a)     It has been exactly a year after PMJDY was announced. Several States have claimed 100 percent coverage of households and by now most banks have taken down the PMJDY banners. While the PMJDY celebrates the govts success on their official website, there are thousands of members who remain excluded.

b)     World Banks latest Global Findex study says the number of people accessing a formal bank account in India increased from 35 percent in 2013 to 53 percent in 2014. However, we need to consider three things. First, the increase in ownership of accounts is still only 18 percent. Second, dormancy of accounts is also amongst the highest in India at 43 percent, indicating that not everyone who has an account uses it. Third, this still leaves close to half the countrys population out of formal financial institutions.

c)     PMJDY is attempting to financially include the poorest in India. However, the problem of financial inclusion is not just one of access, but also of uptake. Given the numbers of those excluded, it is virtually impossible for any one programme to create full financial inclusion.

d)     PMJDY rests on the assumption that pressurising banks to open a savings account under the programme would solve the problem of access, while dormancy is addressed by bundling other financial services such as overdraft facilities and insurance.

e)     This is a naive assumption. The authors research across 368 households in four districts in Tamil Nadu over last 6 months, shows that there are several barriers to banking, chief being the lack of awareness of the programme and its features, among bank employees, business correspondents as well as households surveyed.

f)   Second, there is a reluctance amongst bank officials to open an account for the very poor for reasons that range from apathy to ignorance to arrogance. Third, the account only allows for access to the overdraft facility at the discretion of the banker and both overdraft and insurance can only be accessed subject to transactions on the RuPay card that accompanies the account. In reality, several households have not received these cards.

g)     Fourth, since Aadhaar is not mandatory and does not have universal coverage, there is no single identity document that can help banks track duplicate accounts. So while banks are reporting a large number of accounts opened, this statistic does not mean that households which really need these accounts are getting them.

h)     In Tamil Nadu, State welfare programmes and the high number of bank branches have resulted in a higher number of financially included households compared to States like Bihar or Assam. If Tamil Nadu (with all its positive indicators) still has a financially excluded population, it is safe to say that in other States of India without similar social and welfare schemes or extensive banking networks the level of exclusion can be far higher.

i)     With several State Level Banking Committees across India claiming that all households in their State have access to at least one bank account, these excluded households are going to be treated as invisible. Every single govt in India since the 1960s has been trying to get the poor to bank. Every single such programme has also failed to facilitate full financial inclusion for exactly the same reasons that are troubling the PMJDY.

j)     A research study on financial inclusion in South India, tell us that the biggest barriers the poor face are banks and bank officials themselves. Across India, banks do not provide information about their products, and forms are hardly in the local language. Poor customers at bank branches are treated disrespectfully.

k)     The govt is equally to blame for poor implementation of the PMJDY. In the urge to show rapid success, the number of accounts opened in a day becomes the badge of merit. This allows banks to reinterpret it so that they can show maximum success.

l)     The architects of PMJDY first need to acknowledge its current faults, both in design and implementation. Second, policy makers need to determine what causes bankers to behave in the manner they do and incentivise them to act differently. Third, policy makers need to engage in building awareness and financial capability for low income households. Unless this happens, several members will continue to remain excluded.

12.

On a recovery path (Page 16)

a)     National

b)     Economy

a)     Economic growth

b)     Index of Industrial Production (IIP)

c)     Consumer Price Index (CPI)

d)     Inflation

e)     Food inflation

f)     RBI

a)     Two recent surveys conducted by industry-level associations indicate a turnaround on the economy. Supporting the govts case are two closely-watched monthly data releases - IIP figures and CPI. IIP figures for July support the positive sentiment. The IIP rose 3.8 percent, which seems to indicate a steady recovery.

b)     Consumer inflation fell sharply from 5.4 percent in June to 3.78 percent in July. The fall in food inflation has been even more striking during the period - from 5.48 percent to 2.15 percent.

c)     Contrary to predictions of sub-normal monsoons, rainfall has been by and large satisfactory in most parts of the country. A decent harvest during second-half of the year can further dampen inflation expectations. RBIs inflation target of 6 percent in Jan 2016 looks very much achievable. In a kind environment, an interest rate cut is eminently possible. The biggest factor aiding positive sentiment is the low petroleum prices.

d)     The fall in imports due to a sharp reduction in petroleum and other commodity prices is no doubt a prime factor. Yet, a fall in imports by itself need not be a healthy sign. A fall in the imports often notes a weakness in the ongoing recovery. It is narrow to claim credit for a narrower trade balance on the basis of falling imports.

e)     Indias recent export performance has not been impressive, to say the least. A global slowdown has caused a fall in exports (it has also caused a fall in global oil prices). For three quarters in a row, exports have dropped.

f)     Chinas surprise devaluation of the yuan against the dollar is another major cause for worry. Chinas exports become more competitive, and there is a loud for a sharp depreciation in the external value of the rupee as well. This might happen or not but there will definitely be an informed debate on Indias exchange rate policies in relation to those of its competitors.

g)     On the uproar for lower interest rates, the RBI has pointed out that even after a 75 basis points cut in the repo rate, commercial lending rates have not fallen in tandem. There are always two sides to an economic issue. But at the moment the positives have an upper hand.

13.

China yuan to move both ways, more adjustments unlikely (Page 15)

a)     Economy

a)     Chinas currency devaluation

b)     Peoples Bank of China (PBoC)

c)     Currency war

a)     Chinas move to weaken the yuan last week could head off further similar adjustments, and the yuan is likely to move in both directions as the economy stabilises.

b)     Official said that the PBoC shocked global markets by devaluing the yuan by nearly 2 percent on Aug 11. It called it a free-market reform but some saw it as the start of a long-term yuan depreciation to encourage exports. Yuans drop last week and its increased flexibility could help sharply reduce the possibility of similar adjustments in future.

c)     Down market fears that a currency war could be caused by Chinas devaluation, which dragged some other Asian currencies to multi-year lows. He said that China has no intention or need to participate in a currency war.

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