Fortress Aotearoa: What changes economically after the NZ pandemic?


This pandemic is a universal shared experience, and with all universal shared experiences, it will have enormous unseen ramifications throughout our culture, politics and economy.

Moving forward we need to appreciate there can be no new ‘normal’. The virus can re-emerge at any time and a heavy handed trace-track-quarantine infrastructure must be in place until a vaccine is available, and I say that acknowledging that there is no certainty of a vaccine nor how we would even manage to roll out what would be the largest mass medication program the planet has ever seen.

The economic impact of the pandemic can’t be underplayed…

Economy may recover somewhat, only for another major crash to follow

There are growing concerns that any economic recovery later this year could prove short-lived because of a possible deadly resurgence of the coronavirus and a late spike in bankruptcies and defaults, a wicked combination that could cause US households and businesses that barely survived the spring lockdown to go under later in the year.

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Coronavirus: We may be entering a ‘decade long economic slump’

We are in for a shock. Once we are released from home detention we shall find a desolate landscape of mass unemployment, closed shops and a collapsing housing market.

The 12-week wage subsidy is nearly over, but businesses are still feeling pain

This is a nightmare scenario. It’s easier to lose jobs than it is to create them and unemployment leads to terrible social ills, including poor health and, at worst, suicide. 

Unemployment higher than during GFC and rising – economist

A leading economist says the number of unemployed Kiwis is now higher than during the Global Financial Crisis – and the worst is yet to come.

Benefit numbers exceed GFC – and worse to come

More people are on the Jobseeker benefit than at the height of the global financial crisis (GFC), and it’s going to get worse, one economist warns.

There are now 35.2 people on the Jobseeker benefit per 1000 compared to 34.6 at the peak of the GFC, or a total of 174,630.

About The Economic Future: Good Questions – Uncertain Answers

Some were already forming the view of difficulties for the world economy before the pandemic became evident. They may have been expecting a repeat of the Global Financial Crisis, that it a financial collapse which would feed into the production side of the world economy. It was too early then to assess what would be the outcome in the longer term.

Suddenly, there was the Covid-19 pandemic. It was a bit like a bazooka firing at an already tottering bicycle. So, it wasn’t going to be a rerun of the GFC – the damage was going to be much greater.

Covid 19 coronavirus: Expert predicts ‘massive bankruptcies in two-year meltdown

We’re just months away from a Great Depression-style disaster, with “massive bankruptcies”, soaring unemployment and crashing house prices set to hit markets hard.

That’s the view of US demographer and financial commentator Harry Dent, who believes the coronavirus crisis is simply the “perfect trigger” that will set off an already “sick” economy.

While the pandemic has sucker-punched global markets, Dent, who correctly predicted the 2008 crash, said the looming “depression” had been building for years.

Majority of households either in financial crisis, or on the brink

The majority of households are in personal financial crisis, or are close to falling into it, an international survey including 3000 New Zealanders showed.

Already one in 10 Kiwi households had missed a mortgage or rent payment as a result of the Covid-19 economic crisis, the research from the taxpayer-funded Commission for Financial Capability indicated.

The impacts of the shuttered economy in March and April fell hardest on young families, Māori, Pacifica and people working on already insecure contracts.

Ten reasons why a ‘Greater Depression’ for the 2020s is inevitable

After the 2007-09 financial crisis, the imbalances and risks pervading the global economy were exacerbated by policy mistakes. So, rather than address the structural problems that the financial collapse and ensuing recession revealed, governments mostly kicked the can down the road, creating major downside risks that made another crisis inevitable. And now that it has arrived, the risks are growing even more acute. Unfortunately, even if the Greater Recession leads to a lacklustre U-shaped recovery this year, an L-shaped “Greater Depression” will follow later in this decade, owing to 10 ominous and risky trends.

Coronavirus: ‘All we’ve seen is the disruption, the real recession starts now’ – economist

Despite daily COVID-19 cases hovering around zero and alert level 2 causing a jump in retail spending, experts say the economic fall-out of COVID-19 is just beginning.

It comes as companies such as Fletcher Building, Air New Zealand, Smith’s City and Trade Me announced cuts to jobs and Bunnings and Michael Hill close stores, and the end of the 12-week wage subsidy from mid-June.

Economist Shamubeel Eaqub said that initial pent-up spending after lockdown was expected. As the wage subsidy runs out and the country settles into recession, he expects business cost-cutting to continue. 

“This is the beginning: all we’ve seen is the health disruption, the real recession starts now,” Eaqub said. 

Kiwis are the ones who will pay for tough economic times

The Government’s 2020 Budget projects a path of falling income and massively increased expenditures over the next four years.

Deficits totalling $106 billion and total debt of $200 billion or 54 per cent of New Zealand’s annual GDP are forecast. The planned borrowings are an increase of $140 billion on pre-Covid-19 Government debt levels, which were $60 billion, or 20 per cent, of the country’s annual GDP. Another useful comparison is that at the height of the Global Financial Crises/ Christchurch earthquake period, Government debt peaked at $62 billion, or only 24 per cent of GDP.

Total Crown net worth catapults down from $137 billion to $33 billion.

For New Zealand that means the borders must remain shut amputating migrant workers, international students and the tourism industry.

The economic depression this pandemic causes is the second wave of this tsunami after the lost loves. the Government has protected us from the first, it now must focus on the latter and that will demand a Labour Party brave enough to challenge the sleeping dogs of the neoliberal debate that almost destroyed the Party in the 1980s.

The foundations of the 35 year neoliberal experiment in NZ have been exposed an found to  be cracked to their core, with the climate crisis demanding a radical change, this pandemic is the perfect time to challenge the religious orthodoxy of free market dogma.

This is a unique challenge for the NZ Left ever since Identity Politics over took class politics as the dominant theory on our side of the political divide. It means currently that the Left in NZ are intellectually better prepared to organise a WoC Mommy Blogger Trans Ally free the nipple petition on Action Station than they are to debate the hegemonic structure of neoliberalism.

This has left the Left intellectually ill prepared to debate the failures of the free market economy and the solutions we must adopt to get out of this.

Here are some thoughts on where NZ needs to go.

Union Membership: We have seen that Unions were the only protection essential workers had during the pandemic and that their input was crucial for developing real service strategies that the bosses were devoid of. Universal Union membership would immediately quench the exploitation of migrant workers AND extinguish the exploitation of International and Domestic Tertiary Students.

Welfare: The legacy of punitive welfare provision to create underclasses that the right turn on each other must come to an end for equality purposes, quality of life purposes and basic human decency.

Living Wage: We need a living wage to replace a mimim wage as a matter of course.

Think Bigger: With free market supply chains now in retreat because of the virus, we need a huge infrastructure rebuild of a basic pharmaceutical industry, we need solar panels on every roof, we need light manufacturing industry, wood processing industry, and an enormous tech upgrade to our internet infrastructure. Tourism can only happen if we build quarantine infrastructure to hold all tourists in quarantine before they begin to travel.

Rebuild Green: The entire rebuild of our economy demands sustainability be front and foremost in all things. Free public transport, solar panels on all roofs, local industry that replaces as many unsustainable parts as possible.

Unleashing NZ entrepreneurship: NZ has a long history of entrepreneurship and we need it now. There should be tax breaks for research and tax breaks for companies that look to be sustainable and ethical. There should be an ease with entrepreneurs walking away from failing business, cauterise the debt and allow them to re-chanel their energies into new green businesses.

Labour are notoriously timid when it comes to challenging the neoliberal hegemonic structure because they were the Party that unleashed this far right experiment upon us and the scars of that debate are still raw in Labour’s psyche, luckily for us the economic depression will be so deep and damaging that even Cautious Jacinda and Extra Cautious Grant have no choice but to reform and rebuild.

There is a live streamed event occurring in July in Wellington bringing together the smartest voices on the Left to debate where NZ needs to go next.

Increasingly having independent opinion in a mainstream media environment which mostly echo one another has become more important than ever, so if you value having an independent voice going into this pandemic and 2020 election – please donate here.

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  1. Once we break out the map and agree on the dimensions of New Zealand’s area of responsibility it becomes increasingly difficult to allow emotions to cloud judgment. Some people think New Zealand’s interests should just be our Exlcusive Economic Zone which is pretty tight to the coast. Some people like me think New Zealand’s primary and secondary interests should be the South Pacific and Antartica and other people think that we should maintain the global neoliberal building blocks with America and the Middle East. On holding on to yesterdays America with low, low, low interest rates and just grow up and grow some balls and let go of the American illusion/dream.

    So once we decide how big New Zealand’s area of responsibility is and NZ is a major regional player then the tonnage, payload and range of ships become easy to select, the ports that ships birth in become no brainers, then the roads and energy infrastructure and everything else should fall into place once the demisions on the map are agreed upon.

    But once we’ve done all this planning and put up all this investment then you have to ask well are we going to sub contract foreign military’s at no cost to New Zealand in order to maintain security around New Zealand’s interests?

  2. Cuba offers one of the best examples in the world for long-term resilience and happiness devoid of ostentatious consumption, but augmented with egalitarianism and high culture -yes ballet and opera- and one of the best medical systems in the world. It has shown the way to beat Covid-19 in the Americas.

    ‘…Gail Reed, editor in chief of the journal Medicc Review, believes Cuba’s universal health system has allowed the government to “direct a unified rather than a fragmented strategy”.
    “Asymptomatic cases are identified through contact tracing followed by antibody testing and, when positive, a PCR [polymerase chain reaction test, which can find viral particles on a person] for confirmation,” she said.

    This tracing and isolation regime is made possible by human resources. Cuba has the highest doctor-to-patient ratio in the world (even when the 10,000 or so doctors currently working abroad are subtracted from the total). And while health spending was cut during Raúl Castro’s time as president (2008–2018), the island spends a higher proportion of its GDP on healthcare than any other country in the region…

    All that despite Cuba being the subject of US sanctions and threats for the many decades since the largely American affiliated overlords were thrown out in the late 1950s.

    Cuba even managed to do well when it lost most of its [USSR] oil supply in the late-80s to early-90s. Rapid adoption of permaculture-style food production and medicines developed from plants kept the populace busy and healthy. The free lessons in ballet and music given to every child with an inclination puts most societies to shame, as does the free training in medicine. The differential between what a doctor will earn compared to the average citizen -about twice, I believe- is truly egalitarian.

    Of course Cuba has been vilified for decades by the international money lenders and corporations (and their lackeys in power) for not engaging in the profit-driven schemes they promoted, and for the worst crime of all -being communist in a world dominated by dog-eat-dog and transfer-wealth-from-the-many-who-have-little-to-the-few-who-have-far-too-much. The butt of many jokes, with its decaying villas and vintage cars, Cuba has ‘cracked it’, as a New Zealander I knew reported after spending time in a Cuban hospital and finding the level of care astounding.

    He who laughs last laughs best. And given the choice, where would you want to be given the choice between Cuba and the US?

    Of course, until the Covid-19 epidemic hit NZ the idea of growing food in your own back yard or of walking or cycling instead of travelling by car had fallen very much out of favour.

    After decades of societal insanity we now urgently need to return to societal sanity.

    Sadly, there will be those who will resist every step of the way, and will continue to promote unsustainable arrangements that are predicated on high energy use and rapid degradation of the environment.

    • That’s why there’s thousands of people risking life and limb trying to cross over from Florida to Cuba eh? Ops actually it’s the other way around


    Labour COALITION could lose the election if it opens the borders and allows ‘close gathering of people’ now.

    We are still seeing many among us with no symptoms but may well be ‘super spreaders’ of a ‘dormant strain’ OF THE VIRUS AS THEIR ARE 36 KNOWN STRAINS OF IT NOW, that develops later in the cycle.

    Numbers of the elders in rest homes are very fragile and we do wonder why all elders have not been tested for past corona virus infections using the new global gold standard ‘serology’ blood test for ‘antibodies????

    Canada is testing now one million of their at risk almost their population.

    WHO also has just recommended the wearing of face masks when among people. We are still in harms way, so Jacinda be cautious.

    CEAC Wants Ministry Of Health Adopt 99.8% Accurate Antibody Virus Test.
    Wednesday, 13 May 2020, 4:59 pm
    Press Release: Citizens Environmental Advocacy Centre
    As the FDA OKs Roche’s coronavirus antibody test – CEAC wants Ministry of Health adopt 99.8% this accurate antibody virus test.

    QUOTE; Swiss biotech company Roche Holdings said it has devised a test that is 100% accurate at detecting coronavirus antibodies and 99.8% accurate at ruling them out.

    Roche expects to be producing millions of the tests this month and 100 million a month later this year, the company said Sunday. The U.S. Food and Drug Administration has cleared the diagnostic tool for use. The antibody test, Elecsys Anti-SARS-CoV-2, produces a false positive in only one in 500 tests, according to Roche. The test runs on an instrument that can create a single result in 18 minutes and up to 300 in an hour.

    FDA approves emergency use of new coronavirus antibody test

    The FDA on Monday said companies making COVID-19 antibody tests must apply for authorization by the agency within 10 days of releasing their products. It also specified what’s needed for tests to receive regulatory clearance.

    Roche said serology tests can determine whether a person has gained immunity against a pathogen such as the coronavirus. Of the more than 200 antibody tests that have flooded the market, the FDA has granted emergency use authorization to only 12 tests. Most tests now in use were not reviewed by the agency.

    “We unfortunately see unscrupulous actors marketing fraudulent test kits and using the pandemic as an opportunity to take advantage of Americans’ anxiety,” the FDA said in a statement.

    The tests are viewed as a crucial part of reopening the economy, but some have been troubled by accuracy concerns in the rush to get to market. The White House last week acknowledged the issue, advising that multiple antibody tests should be used to access the spread of the virus, which has infected more than a million Americans and killed nearly 69,000. UN-QUOTE.

    Making our ‘fight against COVID 19’ a gold world standard as the Ministry of Health has assured us are doing, we must use the most accurate test now available around the world to assure us to make us secure and safe for our future.

  4. Long been a supporter of Cuba myself, imagine how much more they could have done with the brutal USA embargo “knee” off of its neck…

    Having lived in the Far North for decades, it is obvious that many of those that do live well up here live in a self sustaining and sustainable way already. It is not easy though–you can get penalised by the power companies for running solar panels!

    • …”It is not easy though–you can get penalised by the power companies for running solar panels! ”…

      Indeed,- and who owns those power company’s by and large ?- bloody foreigners, that’s who! Who bought that infrastructure for a song and then proceeded to create a monopoly and crank the prices up on us. After prior generations built them all up with blood , sweat and tears to provide US, the New Zealanders, – with cheap, affordable power generations.

      And just WHO are these neo liberal govts protecting? Our interests or some fat rich overseas slob who doesn’t even live here, never ever set a foot here and who has no intention of ever doing so?

      Now we have kids and adults, and the elderly , – dying in cold moldy homes, family’s having to choose between heating the damn house or a visit to the doctors. Or putting a modicum of food on the table.

      If any heads were to roll it should be first the politicians who enabled that and then boot the foreign capitalist bastards out and re-nationalize em!

      And if people can do the solar panel thing it should be encouraged- not put up obstacles because the council wants its bloody revenue and back handers from the private power providers.

      • It really was an exposed fundamental flaw in the structure of our society that it was possible for a government to come into power and then without ever giving the slightest hint of what they were going to do, to confiscate all the vital assets that the nation had built for itself over the previous 150 years. I don’t think it has ever really sunk in to the countries’ conscience just how inadequate the parameters of how our democracy works that made it possible.
        If they had explained what they intended to do they would never have been elected in a thousand years and well they knew it so it had to be kept secret from all but a tiny group of actors. You can say they were stupid or you can say they were treacherous , or you can say they were evil, or be terribly kind and say they were misguided, but it should not have been possible within the structure of a democracy for something so catastrophically destructive and dispossessing to be done to the people of New Zealand without a whisper of the intent.
        You could say that nothing has changed , but MMP came in in a mood to try and make that sort of stunt more difficult to pull off in the future, but it was done by then and it has only made it more difficult for the theft to be reversed if a government ever came in that wanted to.
        Wouldn’t it be loverly if the world is going into an economic meltdown the companies that have bought them all collapse along with the whole financial system and the government is forced to buy them back for a small part of their value with new money the government will have to issue itself, and put the country back together again the way it was and should always have remained.
        D J S

  5. Great piece Martyn. So glad to see there is going to be a public left discussion on where this is all headed.

    C19 has further exposed the absurdity of legislated built in guarantees for private capital to penetrate public infrastructure, and processes, thanks initially to the Douglas/Lange labour Govt. The State Sector Act, Reserve Bank Act, and SOEs amount to a pirates charter for corporates to raid the wealth the people of New Zealand create.

  6. Another superb, succinct if scary and savage piece, MB.

    Makes me ask if Putin, the silent sponsor of the election of idiotic Trump, and Qi, the dictator – both now presidents-for-life (of their own making), are overseeing the impending used-by date of capitalism as we know it, and are having a great old chuckle at our expense. It’s looking like a bloodless coup of the West in the making.

    And all a significant (but not majority, thank goodness) portion of NZers can offer is a would-be minister of small business! Very Small thinking indeed.

    At least the government offer more hope and a bit bigger thinking, but will it be enough? I, for one, am anxiously watching that space!

    • Verity Verdant: “….Putin, the silent sponsor of the election of idiotic Trump, and Qi, the dictator – both now presidents-for-life (of their own making)”

      You know that’s nonsense about Putin, right? If not, you ought to. Remember that the ghastly Clinton won the popular vote at the 2016 election: it was the EC that got Trump over the line. How on earth could one man in another country have produced a contradictory result like that? Just because the msm claims this stuff, that doesn’t make it so. Here you are, reading a lefty blog: I’d have expected you to be as sceptical of the msm as are most or all other lefties.

      The president of China is Xi Jinping. Not Qi. It’s important to get names right.

      President Xi may well have awarded himself another term: China isn’t a democracy, after all. But the same most certainly isn’t true of Putin, who has been elected to his position. Because enough voters like him and want him to continue as president. Russia is a democracy, remember.

      Perhaps you’re unaware of the fact that German chancellors also frequently serve very long terms, because, like Putin, they’re re-elected. And because there’s no term limit in the constitution. Bismarck was the longest-serving, almost 23 years. Helmut Kohl served 16 years: Konrad Adenauer’s term was 14 years, and Angela Merkel will have served 16 years, I think, by the time she steps down in 2021. I do not hear anyone suggesting that any of these Germans had or have appointed themselves as chancellor-for-life.

      The practice of having long-serving heads of government is an aspect of the culture in that part of the world, it seems.

      “….are overseeing the impending used-by date of capitalism as we know it, and are having a great old chuckle at our expense.”

      You are aware that both China and Russia are capitalist, right? Russia adopted capitalism at the fall of the USSR, though Putin has rescued some state assets from the clutches of the oligarchs and the US neolibs. And that’s a good thing, surely? As I understand the situation, many commenters here would love our government to take back control of many of our state assets from the hands of off-shore capitalists and oligarchs.

      The great shift in China over the last 30 years or so has been the move towards a market-driven economy. Communism and capitalism go hand-in-hand there.

      This is why your suggestion that they’re having a chuckle at our expense is curious. The collapse of capitalism – if that’s on the horizon – would affect those polities every bit as much as it would ours.

      Though to be sure, they’re doubtless laughing behind their hands at the inexperienced and talentless muppets we westerners persist in electing to office. Couldn’t blame them for that now, could we?

  7. Apologies for not reading the blah-blah above. I can only imagine the vector of the narrative thus I don’t care to read it.
    “Fortress Aotearoa: What changes economically after the NZ pandemic?”
    Well, considering there are only 5 million of us and our farmers make tons of stuff to eat and wear I’d say we’re going to be ok. It depends on how slavishly our well paid politicians insist we kiss foreign bankster arses, I guess.
    I think it’s a question of whether we think that by continuing to do the same things while expecting different results is the go or do we try a different approach to how we earn our money and what we do with it when it starts rolling in. I know ! Tourism..! Ba hahaahaha aa ahahaha ahahahhahahahaha ahahah aha a a !!!
    Do we make sure that more than the usual 4% to 5% of what’s earned in foreign exchange from agrarian enterprises gets back to those in those agrarian endeavours so that they can farm more organically and holistically? Or do we insist that most of that money earned goes either in some urban scunthorpes pocketsesssss or to watch that money brush past our people only to end up in foreign banksters pocketssssesssss where ,once digested, goes through inflated urban property markets digestive tract then off to the Cook Islands or Panama or where ever the coke and hookers are at?
    It’s increasingly clear to me that the elephant in the room is so enormous and we’re so close to it that all we can see is a vast grey wall with whiskers.
    The problem AO/NZ has is that because we et al are agrarian we either eat foods or we eat foods and grow foods too. Because of that, we need more smaller holdings growing a wider range of foods, fruits and Pot because while there’s 5 million of us, there are only about 53 thousand people solely earning their income from the land. The rest could easily be accommodated on an UBI. Especially once we wrest our services, ammenities and assets back off the scum privateers because in my dream for AO/NZ there’s no need for millionaires or billionaires.

    • Pity our farmers don’t make cellphones and laptops. Or cars. Or pacemakers. Or any of the other lovely things we all enjoy but don’t want to produce locally. Because, oh boy, we’d have to dig up minerals!!! Heaven forbid. Then we could shut ourselves off completely from the world and become hicks. Reading some of the comments here, we maybe well on the way…I hear a banjo….

  8. … ‘ The foundations of the 35 year neoliberal experiment in NZ have been exposed and found to be cracked to their core, with the climate crisis demanding a radical change, this pandemic is the perfect time to challenge the religious orthodoxy of free market dogma’….


    ^^^ Neo liberalism.

    It reminds of the above Old Testament judgement somewhat… we all knew it was wrong but did nothing about it. Nowhere near enough. We just had a ton of infighting and did nothing. Ego’s, political ambition, avarice , all of it there as the reasons why we didn’t. And we didn’t demand our politicians renounce it around the globe, instead we saw the Sanders’s and Corbyn’s mocked and belittled.

    And now we have to pay the piper.

    Oh yes, now we have to pay the piper.

    Pay the Piper (Barry McGuire: Lighten Up [1975])

    And the reason we shudda been doin something about it? Another one by the same artist.

    Banksy and Barry McGuire

  9. Yep she announced at 3pm that level one goes into effect at midnight Sam.Borders still closed except for returning workers and others but 14 quarantine goes into force as usual. Fingers crossed eh?

  10. Yep she announced at 3pm that level one goes into effect at midnight Sam.Borders still closed except for returning workers and others but 14 quarantine goes into force as usual. Fingers crossed eh?

  11. there is really important work that economists have been doing for years now as a response to neoliberal economics.
    now i am reading it and finding hope in it.
    but we need to get our heads around it and get it out there in the public gaze urgently during this election year.
    as a counter to the usual neoliberal “we must reduce the government deficit” arguments.
    here is some light reading on it:
    my question is, how do we get some sort of public forum where economic options beyond neoliberal (we already know about those!) can be discussed, assessed, analysed reported on in a way that during this election year the public can see that there ARE options to business as usual? sorry for the long sentence…..

  12. Wonder if Robertson will recommend moving to level 1 for only some people at midnight tonight, the most deserved among us, like he did with the two tier benefit system we now have. Or if seasonal flu shows up yet again in NZ (aka Covid second wave), will Jacinda lock down and isolate just the risk group of the elderly and infirm, unlike sentencing the entire population to house arrest as she did.

    • Jody: “…..if seasonal flu shows up yet again in NZ (aka Covid second wave), will Jacinda lock down and isolate just the risk group of the elderly and infirm….”

      This is what the government ought to have done when that bloody virus showed up here earlier this year, rather than what it actually did. It was obvious even then that older people and those with comorbidities were being differentially affected.

      I’d add that, being a boomer with the usual ailments of increasing age, I’m in the at-risk group. We don’t live in either a retirement village or a rest home. And it was those types of facilities – a lot of older people living in close proximity – also differentially affected by viral contagion, as one would expect. Given our living situation, we were never at particular risk. This applied to all older people in a similar situation to ours.

      In a usual winter, the flu virus runs rampant through such facilities. Many years ago, when my late mother was on the waitlist for a very good facility in Auckland, its geriatric social worker told me that, because it had been an unusually warm winter, there hadn’t been much illness: “At this time of year, we usually have a good clean-out, but we haven’t had a rattly chest in months.”

      So. The government glossed its general lockdown as bring designed to protect all of us at-risk people. Well, bugger me! I remarked to a family member: the government caring about us? That’d be a first. It could quarantine aged-care facilities against the winter flu virus every year, but it does not.

      In truth, the government was mortally afraid that we’d overwhelm the health system, which has been munted from many years of systematic underfunding. That’s all it cared about.

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