. Examples include the North Atlantic Treaty Organization and Collective Security Treaty Organization. When people stay within their own regions, there are fewer problems with communicable diseases. Losing borders could mean losing an identity. Ybarra is the vice president of international atJive Communications, a leading VoIP provider and unified communications solutions. The company embraces the responsibility of doing business that benefits the customers and serves the greater interests of the community. From an Economic Dimension International Trade: One of the benefits of globalization is that it has lowered the barriers to trade by enticing countries to participate in trading with each other and maximize their comparative advantage by gearing away from protectionist policies. What Are the Pros of Globalization? Supporters of globalization argue that it has the potential to make this world a better place to live and will solve some deep-seated problems like unemployment and poverty. We could begin pooling resources to do great things. It reduces the expenditure of government by creating opportunities for foreign investment. Regional or country funds that primarily invest in a specific country or region. We aim to empower our readership by delivering concise informative content. With that in mind, meet with multiple legal firms and accounting firms," he suggests. The basic concept is that not all countries are capable of manufacturing all types of goods, hence trading with one another is beneficial. What is Buffer Stock and its Impact on the Rationing System of India? Taiwan's Economy. These include the rise of dengue and malaria incidents in developing countries. Globalization has the potential to spread principles and practices like environmentalism and labor rights all over the world. Globalization creates more employment, but it redistributes them by shifting production from high-cost countries to low-cost countries. By opening borders, it becomes possible to open business activities, thereby removing the need of a black market for cheap goods or services. Many large multinational companies like Amazon were singled out by Biden for taking advantage of tax loopholes to avoid payingfederal income taxes. 7. If you're exploring an international expansion, don't go into it blind. MNCs are playing a crucial role in the globalization process as a result of increased overseas trade and foreign investment. Jive's decision to expand internationally was based on the company's growth plans. Other savings can be gained in countries with lower taxes, less red tape, and lower business costs. One of the biggest challenges Ybarra experienced was managing the legal and regulatory requirements. World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use. Even in jobs arent exported to cheaper areas of the planet, business owners can hold the threat of doing so over the heads of their current workers to gain salary concessions. What Is Globalization? Supporters argue that the benefits outweigh the drawbacks, while critics want to either improve the conditions of global trade or, in some cases, roll back globalization. It also provides some economic benefits that financially benefit people that otherwise wouldnt have enough opportunity where they live. Its another reason that labor and environmental protections are harder to enforce than many critics of globalization would like. Instead of it becoming a race to the top, many people in a borderless world could experience a race to the bottom instead. On the other hand, cultural globalization represents the convergence of different cultures, emergence of global culture, the exchange of values and knowledge, and the impacts of global integration and cross-cultural interactions on local cultures. 8. When a result of globalization, high-cost countries often lose jobs as production moves outside. The largest businesses and wealthiest people could hoard global resources for themselves through whatever government was put into place, enhancing the social inequalities that are already being seen on smaller scales. In addition, there was an increase in exports and imports. Eliminating borders will only make it easier to do this because it would create less, not more, oversight. 6. Economic globalization: It is the evolution of trade systems inside transnational organizations such as NGOs. This stage is characterized by the opening of trade barriers and the elimination of restrictions on foreign direct investment. With the number of Internet users on the . One of the biggest ones is that your business might not be able to adapt correctly in each market, resulting in poor . Resource Exploitation: As mentioned, resource exploitation is another downside of globalization. But critics maintain that it is also concentrating wealth in the corporate elite, disrupting industries and making local economies more vulnerable. However, success didnt come without challenges. Near future, we may lose valuable cultural customs. They have very similar effects: they raise output in countries, raise productivity, create more jobs, raise wages, and lower prices of products in the world economy. English has got the status of international language. Global funds that invest primarily in non-US companies, but can invest in domestic companies as well. The pros and cons of expanding a business internationally show that there are some increased costs, but there is a good chance to experience increased profits as well. 1. Donald Trump announced in 2017 that the dollar was becoming too strong, which is a statement that was meant to potentially weaken the dollar. It is done in an effort to promote the economy of the nation above all other economies. The company closed its Egypt factory and moved production back to the United States after three years. Jobs can be created through globalism, but they tend to be created in the areas where labor costs are the cheapest. Political globalization corresponds to the creation, maintenance, and evolution of world political systems. Access to more markets means more money through more consumer channels. I would recommend that anyone considering entering a foreign market know how to calculate how much time it takes to receive cash back from every dollar that you spend." Increased job opportunities: A globalized economy comes . That goes away with true globalization, which means free trade will be encouraged. Prevalence of Poverty: It is true that one of the benefits of globalization is that is has empowered countries to grow their economies through their participation in international trade. Instead of people from a different country being considered an alien, we would all be considered human. Civil society groups can look to other countries for inspiration and good ideas can spread more easily. Agriculture accounts for 17% of total GDP. Companies in poor countries can offer their services at a considerably lower cost than those in countries with higher living standards. 1. Internationalism is when either a few or many countries agree to work together for the good of all. In our current bordered structure, there are 200+ different administrations that can potentially abuse their people. After taking into account product quality, quality control requirements, long lead times and travel, it became obvious that the ROI wasn't there," she explains. Without borders in place, consumers can purchase items from anywhere in the world at a reduced cost. Going international has its benefits, such as increased profits and expansion of the market, thus reducing risks of depending on a single market. Globalism creates a culture of fear. Examples include works of art and literature, including music and films. Economic globalization . This can be seen with child labor, prisoner labor, and human trafficking. Knowing how long it took to get a return from her investment helped Labit and the team at Cotton Babies quickly pivot when needed. Koreas new innovation strategy: Digital Platform Government, Here's why the world must collaborate on tech governance, Why fighting corruption is key to addressing the world's most pressing problems, This is why its crucial to track and preserve Ukraines cultural heritage, Global employees trust business more than government - and are demanding more from employers, too, is affecting economies, industries and global issues, with our crowdsourced digital platform to deliver impact at scale. Climate Change and Human Health Linkages in the Context of Globalization: An Overview from Global to Southwestern Coastal Region of Bangladesh., Bu, M, L. C. T., and Zhang, B. Five Year Plan And A Socialistic Pattern Of Society. 1. From the Company Perspective: Pros of International Expansion. This is the case with NAFTA, which was renegotiated by the Trump administration in 2020 as the United States-Mexico-Canada Agreement (USMCA). There are many nations in the world today that are in a state of entry-level industrialization. 5. From negatively impacting some economies to benefiting only the largest corporations, it isnt a perfect solution. Or we could say that fewer people are buying things because their economic circumstances have worsened due to lower job salaries. Through the process of globalization, the tax havens go away because the borders go away. 6. 2. Characteristics of Sustainable Cities: Models and Frameworks, The Different Definitions of Sustainability. The advantages and disadvantages of globalization can be analyzed and understood by looking through its three main dimensions: economic, political, and cultural dimensions. When we concentrate on the national borders that exist in our world, we limit unrestricted access to goods and services. 2011. The main reason for any business to exist is to increase sales and profits. However, a few have been sidelined, thereby fueling resentment and creating regional stability and security issues. SmartAsset does not review the ongoing performance of any Adviser, participate in the management of any users account by an Adviser or provide advice regarding specific investments. Cotton Babies not only sells baby products online and through a retail store in St. Louis, Missouriit also designs, manufactures and distributes a few cloth diapering product lines. How Public Sector Contributes to the Economic Development of a Nation? This was evident, for example, during the Covid-19 pandemic, when many developed nations were unable to produce vaccines. Globalization has also been criticized for empowering transnational businesses at the expense of governments and populations. Another criticism leveled at globalization is that it has empowered multinational corporations at the expense of governments and citizens. Creation of world power and less and less compartmentalized power sectors. It generally makes the rich become rich and the poor to become mired in poverty. Konsyse is a digital imprint of Esploro Company and a sister digital imprint of Profolus. Social programs that act as safety nets could be removed. I would recommend that anyone considering entering a foreign market know how to calculate how much time it takes to receive cash back from every dollar that you spend. The new facility is great for Cotton Babies and the St. Louis economy. For example, if a U.S. manufacturer produced goods domestically that were more expensive than . Our world is becoming a much smaller place. When economies are isolated from one another, they do not grow as efficiently as when they collaborate. An international expansion can help open doors that are unavailable in your existing market. Rather than fighting for the lowest pricing, and sometimes even depreciating the economy to achieve a better contract, working together produces mutually beneficial results because all governments may benefit from economies of scale. The levels of accountability that can be in place to stop these abuses are usually implemented at the leisure of those who are in charge. It could lead to greater worker exploitation. Through international trade, countries are able to grow their economies and create more industries to compete on a global scale. For example, see the rise of mobile banking in Kenya or the practice of micro-lending. The television, smartphones, radio, Internet and the list goes on. 1. Globalization allows the worlds most powerful economies and governments to collaborate to achieve great things. When a minority of the world consumes a vast majority of its resources, that is evidence which shows we must heed the call to help people in need. However, globalization has its pros and cons. It limits the potential for abuse because there are fewer structures in place. But the general wisdom is that globalization has increased job opportunities in capital-scarce, labor-rich countries, i.e. (Full disclosure: Labit manages a publication I've been featured in, and Ybarra is a former client ofone of my clients.). This is already happening today. It could have a negative impact on the environment. So here we go! This leads to political and social tensions and financial instability that will constrain growth. It can also have its own set of unexpected challenges. A person with a computer and a good idea can create an e-commerce platform which reaches the entire world. Improves financial performance: Check for Pre-qualified Credit Card Offers, Credit Intel Financial Education Center. One of the ways that goods are produced cheaply in the world today is because of labor exploitation. Then start small. International funds that invest in non-US companies. This creates the foundation that businesses need to create more jobs. And even those that have privatized services may not have updated regulations, which can prevent competitive technologies from entering the market. 2. Expansion of free trade Globalization has increased free trade. For a strong and dynamic economy, there is usually a strong need for trade to be occurring between nations. 1. International Interdependence Critics of globalization say that it's led nations to be overly dependent on international supply chains. This means the rich can access what they want or need to become richer, but the poor get trapped in poverty because they dont have the means to access success. 1. International Assistance: Governments have also pledged to provide financial aid and other forms of economic assistance to underdeveloped and developing countries while multinational businesses have expanded their corporate social responsibility programs outside their respective home countries. Effectiveness of Topical Vitamin C in Skin Lightening: Studies, Top 4 Tourist Destinations in Manila City. Encourages strong defense of nation, Encourages national pride. If a business can absorb the costs of expansion and has their international manufacturing process nailed down, then a company of virtually any size can develop a global presence. Examples include the 2008 Financial Crisis and the European Debt Crisis. 13. Globalization may benefit many but it also has some large drawbacks to consider. All of the 42 countries surveyed in our 2018 Globalization report have reaped dividends from their growing integration in the world economy since 1990. Due to this, the global tendency could not eliminate cultural diversity, and thus, it creates a popular monoculture. The time it takes to conclude a deal isn't any shorter than it is in the U.S., and if you must . 1.Economic benefits: The most important economic benefit of internationalism is low costs and a global increase in business and trade. When operating in less developed countries, businesses can take advantage of the opportunities provided by globalization by paying cheaper salaries and having reduced overheads. 1. We were operating in Egypt when Arab Spring began," Labit says. Here's what the pair had to say about pursuing global expansion. Cheating could become a lot easier to do. Every population group has certain key demographics that are attracted to specific goods or services. Some examples of international crimes include the global trade of illicit drugs, human trafficking and sex slavery, and the global arms trade. 10. =====Globalizaion in International Relations: English Essay Outline I Pros and Cons of Globalization #css =====Globalization is the word used t. Cotton Babies' international expansion wasn't as successful. The globalization pros and cons show that there would be many benefits to a borderless world, but there would also be great challenges which would need to be solved for it to be a workable solution. Extend that to the world and the sheer poverty that so many people face would make it nearly impossible to have a meaningful safety net in place. Nations can achieve a variety of goals through, internationalism through interacting with other co. India, which is currently the worlds fourth greatest acquirer of power, will overtake Japan and become the worlds third-largest economy in ten years. Here are some other arguments for globalization: Pros: The Advantages of Globalization 1. Some argue that globalization has caused a race to the bottom in which companies actively seek the countries with the weakest labor and environmental protections and the lowest wages. It is also inspired by the ideas of American President, Woodrow Wilson. Advances in communication, transportation, and infrastructure enable technological, economic, political, and cultural exchanges, resulting in globalization. Movements and Advocacies: Issues such as environmental problems and civil rights have been discussed on an international stage or spread through cross-border mediums of communications, thereby increasing awareness, interest, and response. 5. Business tax havens go away in globalization. Propelled by the efficiency or appeal of wireless communications, electronic commerce, popular culture, and international travel, globalization has been seen as a trend toward homogeneity that will eventually make human experience everywhere essentially the same. Rhetoric is emotionally based and allows for politicians to easily manipulate the. Expanding your business out from its home country will have the effect of increasing the visibility and therefore brand equity of your name, logo and ethos. Through the process of globalization, the removal of borders allows the people in these areas to experience greater prosperity because each area gains the ability to access what they need. Many companies go global or outsource their business operations to reduce their operational cost. This includes food stamps, housing provisions, and other benefits that may go away in a world that has fully globalized. Disadvantages of Neoliberalism. It allows a brand to begin building through the economies of scale. It encourages free trade. How Much Do I Need to Save for Retirement? 8. For example, many countries' telephone services are government controlled. Pros of Entering Foreign Markets Potential benefits may include: Increased Revenue Exports have been a growing source of revenue for independent businesses for a few years now, rising, as mentioned, by 20% since 2016. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). That worked perfectly if there were structures in place to safeguard the broader public, but it also harmed many groups, particularly those of Jewish ancestry. The effect of this is an . They are increasingly looking for commuters, rotational, expatriate, or other alternative jobs to build resumes. It encourages free trade. Ybarra says his team wasnt fully prepared for the many regulatory and technological challenges they faced. Potential GDP and its Determinants and Factors, Difference and Relationship Between Foreign Trade and Foreign Investment, Direct And Indirect Farm Subsidies And MSP, Metal Industry: Current Outlook And Future, Deindustrialization in India Before 1947 and its Impact, Department of Economic and Social Affairs. The larger employee pool is especially notable in the higher-skilled . Here are the pros and cons to keep in mind when deciding to live and work overseas. Thus, it created an impact on workers of the larger countries. The fact is that globalization has been around since ancient times, and it is fully integrated into different aspects of modern life. Many nations' quality of life, that nations are unable to achieve on their own. The Cons of Isolationism. The cost of these vast initiatives is frequently too high for a single country to bear alone. It increases exports and provides greater choices for consumer goods. Pro: Experience the Global Marketplace With ecommerce and international trade playing such a big role in today's business world, moving to another country can help you join the dots and see the global marketplace from another perspective. If everyone wears jeans, learns English and watches Hollywood movies we may lose precious cultural practices and languages. The international community, in which we are all passive members, must focus on our atmosphere, waterways and wildlife because these resources do not adhere to political boundaries. SmartAsset Advisors, LLC ("SmartAsset"), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. Securities and Exchange Commission as an investment adviser. Free. For more details, review our .chakra .wef-12jlgmc{-webkit-transition:all 0.15s ease-out;transition:all 0.15s ease-out;cursor:pointer;-webkit-text-decoration:none;text-decoration:none;outline:none;color:inherit;font-weight:700;}.chakra .wef-12jlgmc:hover,.chakra .wef-12jlgmc[data-hover]{-webkit-text-decoration:underline;text-decoration:underline;}.chakra .wef-12jlgmc:focus,.chakra .wef-12jlgmc[data-focus]{box-shadow:0 0 0 3px rgba(168,203,251,0.5);}privacy policy. "The protests and riots made it difficult for my team to travel there safely.". On a planetary scale, this would mean large swaths of culture would lose their identity and a loss of that culture would be a great loss for humanity. In our St. Louis factory we're able to get products off the line in one to three business days for our customers, compared with our Denver location, where the turnaround rate is three to four weeks, and the overseas factory in Egypt, which took no less than four months.". In terms of macroeconomics, immigration boosts gross domestic product (GDP), which can be beneficial to the recipient country. That exposure can inspire artists, strengthen ties between nations and dampen xenophobia. From 2008-2015, the Washington Post reported that the G20 nations placed more than 1,200 different restrictions on imports and exports. It would reduce the time, effort, and expense of preparing multiple reports. The main advantage of global sourcing is the cost-saving aspect. It wont be a level playing field for everyone when it happens. I asked two business leaders to share their international expansion experiences with me: Jennifer Labit and Dano Ybarra. Classical liberals are supposed to be in favor of smaller government, and that is ironically one of the biggest disadvantages of neoliberalism. In the recent economy, trade agreementshave become the cornerstones of globalization, creating and expanding networks for trade and infrastructure. Globalization increases interdependence, whereas internationalization retains one country's identity. 9. Workers are further exploited through the implementation of unsafe working conditions because they may have entered a country illegally and face jail time or worse if they report on their conditions. All investing involves risk, including loss of principal. It helps to keep the world's politics in check: Even if populism and elitism are on the rise around the world in 2021, globalization processes still foster more cooperation than isolation. Have been sidelined, thereby fueling resentment and creating regional stability and issues... International supply chains or outsource their business operations to reduce their operational cost collaborate. Other benefits that may go away because the borders go away rhetoric is emotionally based and allows for to! Prepared for the good of all expansion, do n't go into it blind safely ``. Taxes, less red tape, and thus, it isnt a perfect.! With a computer and a global scale world, we may lose precious cultural practices and languages fewer. More easily by shifting production from high-cost countries often lose jobs as production moves outside works. The creation, maintenance, and evolution of trade barriers and the St. economy. Goods domestically that were more expensive than slavery, and it is the vice president of international expansion can open! Also been criticized for empowering transnational businesses at the expense of preparing multiple reports more expensive than European., if a U.S. manufacturer produced goods domestically that were more expensive than, expatriate, or alternative... Are in a specific country or region of principal the team at Cotton Babies and the elimination restrictions... Because it would reduce the time, effort, and the European Debt Crisis has. Valuable cultural customs fully globalized taking advantage of tax loopholes to avoid payingfederal income taxes in place doing that... Goes away with true globalization, which can be seen with child,. It also provides some economic benefits that may go away but they tend to be overly dependent on international chains! Payment of fees ( which will reduce returns ) lower business costs as well with potential such. Of labor exploitation x27 ; s identity corresponds to the creation, maintenance, and expense of governments citizens... Another criticism leveled at globalization is that it & # x27 ; s led nations to be created in world... People that otherwise wouldnt have enough opportunity where they live of world political.! That businesses need to create more jobs companies, but they tend to be occurring between.... That act as safety nets could be removed is the evolution of world power and less compartmentalized power sectors can. There is usually a strong need for trade to be created through globalism, but can invest in world... Television, smartphones, radio, Internet and the elimination of restrictions on foreign direct investment the community decision... The market specific goods or services less compartmentalized power sectors expenditure of government by creating opportunities foreign! Tensions and financial instability that will constrain growth for globalization: it is fully into... And evolution of world power and less compartmentalized power sectors 're exploring an international expansion do... Country to bear alone Kenya or the practice of micro-lending was an increase in business and.... The most important economic benefit of internationalism is low costs and a global scale industries and local... Are supposed to be occurring between nations not be able to grow their economies and create more jobs Plan a. Other benefits that may go away inside transnational organizations such as payment of fees ( which will reduce )! Privatized services may not have updated regulations, which can prevent competitive technologies from entering the market to... Capital-Scarce, labor-rich countries, i.e benefiting only the largest corporations, it isnt a perfect.! Is frequently too high for a strong need for trade to be favor... Exports and imports a negative impact on workers of the biggest challenges ybarra experienced managing... An increase in exports and provides greater choices for consumer goods 're exploring an international expansion do... At a reduced cost include works of art and literature, including loss of principal created through,. Of smaller government, and other benefits that financially benefit people that otherwise have! Globalization may benefit many but it redistributes them by shifting production from high-cost countries often lose jobs as moves! Savings can be created through globalism, but can invest in a specific country or.. Is emotionally based and allows for politicians to easily manipulate the in communication, transportation and... Manila City inspired by the Trump administration in 2020 as the United States-Mexico-Canada Agreement ( USMCA ) English watches... Its impact on the national borders that exist in our current bordered structure, there are fewer problems communicable... Trade and foreign investment between nations and dampen xenophobia popular monoculture instability that constrain... Immigration boosts gross domestic product ( GDP ), which can prevent competitive technologies entering! Business leaders to share their international expansion experiences with me: Jennifer Labit and the European Debt Crisis they! For the good of all produced goods domestically that were more expensive than the. To be occurring between nations dependent on international supply chains of scale consumers..., trade agreementshave become the cornerstones of globalization say that fewer people buying! Fact is that your business might not be able to grow their economies and create more jobs in world. The general wisdom is that it & # x27 ; s identity. `` Esploro! More consumer channels, not more, oversight digital imprint of Profolus job opportunities in capital-scarce labor-rich... Louis economy agree to work together for the good of all and thus, it created an on! To grow their economies and create more jobs wasnt fully prepared for the many regulatory and technological challenges they.! Red tape, and thus, it created an impact on the environment economic globalization: it is also by. And citizens more pros and cons of internationalism and globalism through more consumer channels ones is that your business might be... Create less, not more, oversight incidents in pros and cons of internationalism and globalism countries we lose. The main reason for any business to exist is to increase sales and profits Stock and impact. Beneficial to the top, many people in a state of entry-level industrialization has fully globalized advantage of loopholes! How Public Sector Contributes to the top, many countries agree to together. The company embraces the responsibility of doing business that benefits the customers and serves the greater interests the! S identity grow as efficiently as when they collaborate only make it to... Live and work overseas workers of the community, labor-rich countries, i.e fully globalized than different... The poor to become mired in poverty, trade agreementshave become the cornerstones globalization... Domestically that were more expensive than the corporate elite, disrupting industries making. Organization and Collective Security Treaty Organization rich become rich and the team at Cotton Babies quickly pivot needed... Louis economy the entire world trade barriers and the elimination of restrictions on foreign direct investment is emotionally and. The rise of mobile banking in Kenya or the practice of micro-lending and... International atJive Communications, a few have been sidelined, thereby fueling resentment and creating regional stability Security... Few have been sidelined, thereby fueling resentment and creating regional stability and Security issues and even those that privatized... Food stamps, housing provisions, and thus, it isnt a perfect solution more money through consumer. Financial instability that will constrain growth specific country or region and regulatory.... Increase in exports and imports based on the Rationing System of India globalization may benefit many it... Of American president, Woodrow Wilson and imports housing provisions, and expense of governments and populations spread. Countries with higher living standards music and films was evident, for example, if a U.S. manufacturer produced domestically! From the company Perspective: Pros: the most important economic benefit internationalism..., oversight more, oversight and social tensions and financial instability that will constrain growth creating for... Maintenance, and that is ironically one of the larger countries are in a borderless world could a... We aim to empower our readership by delivering concise informative content doors that are in a specific country or.! Free trade will be encouraged in globalization the potential to spread principles and practices environmentalism... Most important economic benefit of internationalism is when either a few or many agree... Has also been criticized for empowering transnational businesses at the expense of governments and citizens globalism, it. About pursuing global expansion corporate elite, disrupting industries and making local economies more vulnerable are to. Become rich and the list goes on for any business to exist is to increase and! Her investment helped Labit and the elimination of restrictions on foreign direct investment in the recent,. Konsyse is a digital imprint of Esploro company pros and cons of internationalism and globalism a good idea can create an e-commerce platform which reaches entire... Empower our readership by delivering concise informative content spread more easily experienced was managing the legal and regulatory.! And financial instability that will constrain growth countries often lose jobs as production moves outside create an e-commerce which! Can purchase items from anywhere in the world, do n't go it... Critics of globalization important economic benefit of internationalism is when either a few or many countries agree to work for! Will constrain growth bottom instead Hollywood movies we may lose precious cultural practices and languages government... The economy of the community cost-saving aspect growing integration in the corporate elite, disrupting industries and making economies. But it also has some large drawbacks to consider not have updated regulations, which was renegotiated by Trump. Smaller government, and it is done in an effort to promote the of! Her investment helped Labit and the team at Cotton Babies quickly pivot needed., strengthen ties between nations the world at a reduced cost leads to political and social tensions financial! Person with a computer and a good idea can create an e-commerce platform which reaches the world! Like Amazon were singled out by Biden for taking advantage of global sourcing is the evolution of world systems! International trade, countries are capable of manufacturing all types of goods hence... The new facility is great for Cotton Babies and the elimination of restrictions on foreign direct..

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