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Cablegate: Daily Summary of Japanese Press 04/24/08

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UNCLAS SECTION 01 OF 10 TOKYO 001134

SIPDIS

SIPDIS

DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: DAILY SUMMARY OF JAPANESE PRESS 04/24/08


INDEX:

(1) As a measure to counter global warming, six countries now will
establish an environment fund of over 600 billion yen to assist
developing countries (Mainichi)

(2) No companies bid for contracts for rice imported under minimum
import obligation, possibly reflecting rising international prices
(Asahi)

(3) Fukuda reveals plan to establish consumer agency, aiming to
regain lost ground by demonstrating policy identity (Yomiuri)

(4) Scope column: DPJ shifts policy from "gasoline" to "new medical
system for elderly" (Tokyo Shimbun)

(5) What they have to say over readoption of provisional gas tax
rate (Tokyo Shimbun)

(6) 10th anniversary of Democratic Party of Japan (Part 1):
Obsession with Lower House dissolution for general election a
double-edged sword (Nikkei)

(7) Opinion column -- Discussion of film "Yasukuni" by Hisahiko
Okazaki: Bureaucrats' attitude somewhat smacks of bias (Sankei)

ARTICLES:

(1) As a measure to counter global warming, six countries now will
establish an environment fund of over 600 billion yen to assist
developing countries

MAINICHI (Top play) (Abridged)
Eve., April 24, 2008

Japan, the United States, and Britain have proposed a multilateral
environment fund to assist developing countries on the issue of
countering global warming. Now, three more countries - Germany,
Spain, and Australia are joining the effort, and the outlook now is
that the environment fund will reach over 600 billion yen. The
Japanese government is moving in the direction of providing between
100 billion and 150 billion yen to this fund, and together with the
U.S. and Britain, Japan has become a major sponsor. The aim is to
display leadership by building a framework of international measures
to counter global warming in accordance with the Kyoto Protocol.

The aim is to have the fund formally adopted at the Hokkaido Toyako
Summit in July, and then the plan is to quickly coordinate with each
country to provide funding.

This fund, which is to be called the "Clean Technology Fund," was
proposed in February by Japan, the U.S., and Britain at the G-7
meeting of financial ministers and central bank governors in Tokyo.
The sponsors called for each European country to join. The main
pillar of the fund is to assist developing countries with funding
for government-private sector projects that would introduce wind and
solar energy power generation, as well as energy conservation
technologies. The aim also is to urge such developing countries like
India and China which emit high amounts of greenhouse gases to
actively participate in the post-Kyoto Protocol framework.

The U.S. government has announced it would provide $2 billion

TOKYO 00001134 002 OF 010


(approximately 210 billion yen); and the UK has stated it would put
up 800 million pounds (approximately 170 billion yen). Japan will
decide its funding amount by the time of the G-8 finance ministers'
meeting in June, but final coordination is moving in the direction
of providing funding on a scale of 100 billion yen.

(2) No companies bid for contracts for rice imported under minimum
import obligation, possibly reflecting rising international prices

ASAHI (Page 10) (Full)
April 24, 2008

In a tender held on April 22 for contracts for rice imported under
the minimum access deal struck in 1993 during the Uruguay Round (UR)
of global trade negotiations, there was no successful bidder,
according to informed sources. Since FY1995, the government has
conducted about 10 bids every year for imported rice. But this was
the first time that there was no successful bidder. This result
might reflect the recent sharp rise in international rice prices.

The government probably should have offered higher procurement
prices. But if the government had done so, it might have been
criticized as giving momentum to a further rise in international
rice prices. The government has decided to take up the issue of
soaring food prices as a major agenda item for the Lake Toya Summit
in Hokkaido in July, so it has found itself on the horns of a
dilemma.

The volume of rice for the tender on the 22nd was about 62,000 tons.
On about 41,000 tons of the total, no agreement was reached, with
trading houses offering higher prices than the government's
predetermined ones. For the remaining 21,000 tons of rice, there was
no bid held, because no company made a bid or only one company
submitted a tender. A number of trading companies reportedly gave up
making a bid, stemming from the judgment that there would be no
profit due to the recent jump in rice prices.

According to the Ministry of Agriculture, Forestry, and Fisheries
(MAFF), the average international price in 2007 of Thai rice, which
is used as an indicator, was 322 dollars per ton, but this price has
steeply increased since early this year to 441 dollars in February
and 776 dollars in April.

Vietnam and India, both rice exporting nations, began to restrict
exports in the aftermath of typhoons and as part of efforts to
contain inflation. Such export restrictions have also pushed up rice
prices. In the Philippines, the shortage of rice is becoming
serious.

If the government significantly raises the procurement prices, it
will be able to collect rice. However, a senior MAFF official
grumbled: "If we do so, Japan will incur international criticism as
a result of fueling the recent sharp rise in market prices of rice."
Meanwhile, if the government stops purchasing rice from overseas, it
will violate the UR accord. Some MAFF officials suggest that Japan
should propose to the World Trade Organization (WTO) a plan to
freeze purchasing rice, citing the current critical situation as the
reason.

Even so, negotiations in the Doha Round of global trade talks are
now underway in preparation for a ministerial meeting scheduled for
May. One official was overheard saying: "It would be better not to

TOKYO 00001134 003 OF 010


bring in something that would destroy the Doha Round."

(3) Fukuda reveals plan to establish consumer agency, aiming to
regain lost ground by demonstrating policy identity

YOMIURI (Page 2) (Full)
April 24, 2008

In a meeting yesterday of the Council for Promoting Consumer Policy,
Prime Minister Yasuo Fukuda announced a plan to establish in FY2009
a national consumer agency as a "control tower" for consumer policy.
Fukuda made the announcement before the panel reaches an agreement.
He seems to be aiming to regain lost political ground by
demonstrating his policy identity now that public support for his
administration has kept declining. The government plans to adopt a
basic plan to establish the agency in a cabinet meeting in June and
to submit related bills, including one amending the Cabinet Office
Establishment Law, to the extraordinary Diet session this fall.

Fukuda said in the meeting:

"We will launch within next fiscal year a consumer agency given
powerful authority and tasked with overseeing national policies from
the viewpoint of consumers. The establishment of the consumer agency
should not bloat administrative organizations. It should lead to
streamlining outdated organizations and duplicated work by the
existing ministries."

The new agency will be responsible for commodity and financial
dealings, as well as for the safety and labeling of products and
food. It will also serve as a liaison center for consumers. It will
be given the capability of consumer policymaking and the authority
to issue recommendations to companies and government agencies. The
government intends to integrate consumer-related laws, authorities,
organizations, and personnel now split among various government
offices, such as the Ministry of Economy, Trade and Industry (METI),
the Ministry of Health, Labor and Welfare, and the Ministry of
Agriculture, Forestry and Fisheries.

In the meeting yesterday, one participant proposed establishing an
administrative commission-type new panel, like the Fair Trade
Commission, but a decision was made to set up the agency as an
affiliated body of the Cabinet Office so that the prime minister
will be able to demonstrate his leadership.

The government had initially planned to submit related bills to the
ordinary Diet session in 2009 and set up the new agency in the
summer or later. But it has moved the schedule forward.

A focus of attention is whether the authorities now split among
various government offices will be effectively integrated into the
consumer agency. Another focus of attention is to what extent the
said council will be able to specify the consumer agency's functions
in its report due out late May.

When the council listened to views from relevant government
agencies, many of them expressed opposition to the planned transfer
of authority. A METI official said: "Guidance to industries and
unified administrative policy are indispensable." METI has the
jurisdiction of the law requiring manufacturers to report on
accidents caused by products. Some in business circles are cautious
about the possibility that restrictions might be strengthened on

TOKYO 00001134 004 OF 010


them.

Fukuda told reporters at his official residence last night: "If you
are not convinced of this, please come to see me. I will give a
satisfactory explanation."

(4) Scope column: DPJ shifts policy from "gasoline" to "new medical
system for elderly"

TOKYO SHIMBUN (Page 2) (Full)
April 24, 2008

The main opposition Democratic Party of Japan (DPJ) has shifted its
strategy of criticizing the government and ruling parties. Three LDP
executives -- President Ichiro Ozawa, Deputy President Naoto Kan,
and Secretary General Yukio Hatoyama -- visited the city of Hikari
in Yamaguchi Prefecture, to give campaign speeches for their party's
candidate running in the Lower House by-election for the Yamaguchi
No. 2 constituency (election day: April 27). In their speeches, all
the three called for abolishing the new medical system for elderly
and criticizing the government of Prime Minister Fukuda. How will
the largest opposition party's policy shift be successful?

"I am concerned that different medical services may be provided
according to age, and I think the medical system that now exists for
the elderly should be abolished," said Kan in a campaign speech for
the DPJ's candidate at a large parking lot in Hikari. When pointing
out problems on the medical system, for which he spent time that was
comparable to that for the issue of highway tax revenues, elderly
people there clapped loudly.

Hatoyama also spared more than half of his time on the medical
system, noting: "Prime Minister Yasuo Fukuda is utterly blind to the
sentiments of (old people). I want (the system) to be scrapped as
quickly as possible." Lastly, Ozawa gave a speech in which he said:
"The election this time around is a prelude for a general election
which I predict will be held this year. I am keen on creating a
government giving consideration to the public."

The House of Representatives will likely take an override vote on a
bill amending the Special Taxation Measures Law. With such in mind,
the DPJ initially had assumed a strategy of taking up the gasoline
tax prices issue in campaign speeches for its candidate.

However, set off by the April 15 start of the withholding of medical
insurance premiums from the pension benefits of those 75 and over,
the largest opposition party has shifted its strategy.

The reason is that polls conducted before the start of the official
campaign for the by-election on voters to explore the voter
preference found that the candidate backed by the ruling Liberal
Democratic Party (LDP) was moving up behind the DPJ candidate, but
the media have reported since the start of the official campaign
that the DPJ candidate has an edge.

The DPJ leadership has judged that the LDP has lost support from the
elderly voters and that it is advisable for it to attack the
government and ruling coalition by pointing out the problems of the
new medical system so that it will make sure its candidate wins in
the Lower House by-election. Some DPJ lawmakers are looking forward
to a change in government, with a mid-level lawmaker saying: "If the
DPJ wins the by-election, the government will have no choice but to

TOKYO 00001134 005 OF 010


review the medical system for the elderly in some way."

(5) What they have to say over readoption of provisional gas tax
rate

TOKYO SHIMBUN (Page 2) (Full)
April 23, 2008

The government and the ruling parties have decided to reinstate the
provisional gas tax rate, using a two-thirds majority second vote on
the bill amending the Special Tax Measures bill in the Lower House.
The Democratic Party of Japan (DPJ or Minshuto) is looking into
thoroughly pursuing Prime Minister Fukuda's responsibility for
causing confusion, by submitting a censure motion against him once
the bill is adopted.

Democratic Party of Japan (DPJ or Minshuto) Secretary General
Hatoyama: Cool-headed debate would become impossible

-- The ruling parties have decided to take a revote on the bill
amending the Special Tax Measures Law in the Lower House.

"They had better think hard whether gasoline prices should be raised
in a high-handed manner at a time when various prices are soaring."

-- The ruling parties say that they will reinstate the provisional
tax rate in order to prevent local governments from suffering a
revenue drop any longer.

"The government has carried out for years a disgusting policy of
slashing revenues of local governments through the three-part
reforms (tax grant cuts from the central government to local
entities, slashing of central government subsidies and a shift in
tax revenue sources from the central government to local
governments). (Cuts in gasoline prices) should be good news to the
public, because it is a tax cut. It is ludicrous for the ruling camp
to continue saying that local finances will go astray."

-- Do you think a revote will affect talks between the ruling and
opposition talks over special-purpose road construction revenues?

"If the ruling parties adopt such a hard-line means as to take a
revote, cool-headed discussion would become impossible."

-- Will the opposition camp submit a censure motion against Prime
Minister Fukuda?

"Public support ratings for the Fukuda cabinet are declining. Many
people are supporting our submitting a censure motion. We cannot
possibly respond to deliberations easily if the bill is readopted in
the Lower House. We must determine how the public responds in a
cool-headed manner."

-- Is there a possibility of not submitting a censure motion?

"If we don't, we will be criticized as being weak-kneed. Another
feasible approach is to cause support rates to drop to the 10
PERCENT level through Diet deliberations and force the cabinet to
resign en masse. It depends on which approach is more
advantageous."

-- Will the outcome of the by-election in the Yamaguchi No. 2

TOKYO 00001134 006 OF 010


Constituency for a Lower House seat affect?

"If we win, we would come up with even a stronger determination. If
we are defeated, we would feel that we were unable to obtain
sufficient sympathy."

-- Will you continue the pursuit of the road revenue issue after the
reapproval of the bill as well?

"The true essence of the gas tax issue is the confrontation between
the state and local governments. It is an independence movement for
local entities to become able to decide the usage of tax funds on
their own. The battle has just started."

LDP Secretary General Bunmei Ibuki: Local governments' revenues must
be protected

-- April 29, when the ruling camp can take a revote on the bill, is
approaching.

"We sent the amendment bill to the Upper House in late February, and
yet, deliberations in the Upper House did not start until April. It
is clear that the DPJ is deliberately delaying deliberations. It is
shameful if the Upper House fails to take final action within 60
days after receipt of the bill passed by the Lower House. "

-- Even so, there is little time left.

"A feasible scenario would be the LDP and the DPJ at their party
head talks deciding what should be done in fiscal 2009 and beyond,
based on the precondition that the Upper House either revises or
adopts the bill. However, if the DPJ rejects this proposal with the
intention to cause a political crisis, the ruling camp would take a
revote on the bill, since it is not possible to allow local
governments to remain short of revenues. "

-- If the bill is readopted, the provisional rate would be extended
for 10 more years. What will become of inconsistency with the
government's and the ruling parties' decision that the handling of
the provisional tax rate should be considered when the tax code is
drastically reformed this year?

"Presumably, when the bill is readopted, measures to be taken in
fiscal 2009 and beyond would be shown in some form or other. One
idea is, for instance, the prime minister holding a press conference
or the Lower House adopting a resolution. It would be all right to
revise the Special Tax Measures bill in fiscal 2009."

-- What approach will the ruling parties make to a censure motion
against the prime minister?

"We cannot stop the opposition parties from submitting a resolution
proposal. However, the point is how the public will view such an
action. Neither the Constitution nor law prescribes the validity of
a censure motion. It is the DPJ that has prolonged Diet
deliberation, and yet why on earth should the prime minister be
subject to a censure motion, if the Lower House readopts the bill?"

-- It will also become possible to readopt the bill amending the
road construction expenses funds special measures law aimed to
extending special-purpose road construction revenues on May 12. Some
ruling party members are cautious about taking a revote on that

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bill, citing that the bill is inconsistent with the prime minister's
proposal for shifting road funds to the general account starting in
fiscal 2009.

"Concern about an unstable situation dragging on will occur unless
measures to be taken in fiscal 2009 and beyond are made clear. As
such, we want to clarify a policy to be adopted after fiscal 2009
and beyond at a press conference by the prime minister to be held
when the bill is readopted or in a Diet resolution."

(6) 10th anniversary of Democratic Party of Japan (Part 1):
Obsession with Lower House dissolution for general election a
double-edged sword

NIKKEI (Page 2) (Abridged slightly)
April 23, 2008

April 27 marks the 10th anniversary of the Democratic Party of
Japan. President Ichiro Ozawa is intent on forcing Prime Minister
Yasuo Fukuda into an early Lower House dissolution for a snap
general election by taking advantage of the opposition-controlled
Upper House in order to achieve his long-cherished desire of regime
change. But some DPJ members are unhappy with his steamroller
approach. How is Ozawa going to maintain party unity while some
members wanting to become his successor are rolling up their
sleeves?

Traumatic experience 10 years ago

Ozawa held a press conference in the city of Fukushima on April 22
in which he declared: "Our policy and standpoint will remain
steadfast regardless of the outcome of the (April 27) Yamaguchi No.
2 constituency by-election. We will continue opposing the revival of
the provisional tax rates."

The ruling parties plan to hold a Lower House override vote on a
bill amending the Special Taxation Measures Law to reinstate the
provisionally high gasoline tax. The DPJ wants to submit a censure
motion against the prime minister in order to force him into either
Lower House dissolution or cabinet resignation en masse.

A line of dialogue between Fukuda and Ozawa that survived their
failed negotiations last year to form a grand coalition ended with
the clash over the selection of the new Bank of Japan governor.

Ozawa puts Lower House dissolution ahead of policy. There is a
reason for it. In the so-called "financial Diet" of 1998 when the
Upper House was also controlled by the opposition bloc, then DPJ
President Naoto Kan made the ruling camp accept his party's demand
not to dissolve the Diet. Ozawa, who was president of the now
defunct Liberal Party at the time, formed a coalition with the
Liberal Democratic Party, concluding that the DPJ had passed up a
golden opportunity. Looking back at those days, Kan said: "We won in
terms of policy but were defeated in terms of the political
situation."

The key to a change of government lies in the strength of the DPJ
and its allies who hold 120 seats altogether in the Upper House. At
the same time, there is a weakness for a shift of only ten DPJ
members could make it possible for bills to pass the upper chamber.

On April 2, Ozawa dined at a Tokyo restaurant with six independent

TOKYO 00001134 008 OF 010


lawmakers forming a parliamentary group with the DPJ. "I fully
understand your standpoints, but this is the time for a showdown. As
members of the same parliamentary group, I would like to see you
align with us," Ozawa said to them while offering them a beer.

Two of them had abstained from two Upper House votes on the BOJ's
top posts. Many of them are critical of the DPJ's policy to abolish
the provisional tax rates. Ozawa is also humble toward the
first-term DPJ lawmakers with a censure motion in mind.

Meanwhile, LDP Secretary General Bunmei Ibuki met at a Tokyo
restaurant on the night of April 9 with such mid-level DPJ members
as Mitsuru Sakurai, Keiichiro Asao, and Tatsuo Hirano. Although a
person who attended the meeting explained that they had just talked
about policy, a senior DPJ lawmaker said bitterly, "They represent
all groups in our party."

Unity regarding "white crows"

The Upper House's rejection of a censure motion against the prime
minister due to revolt by many DPJ-affiliated members would deal a
serious blow to the largest opposition party. In a special DPJ
general meeting on April 18, Secretary General Yukio Hatoyama called
for party unity even by citing the LDP's golden-age signature
phrase, "When the party leadership decides that crows are white,
party members are not allowed to say otherwise."

In the latest Nikkei poll, the rate of support for the DPJ dropped 1
point from the previous survey to 29 PERCENT , while that for the
cabinet fell below the 30 PERCENT level. Ozawa's quest for Lower
House dissolution for a snap general election could turn into
criticism in an instant.

(7) Opinion column -- Discussion of film "Yasukuni" by Hisahiko
Okazaki: Bureaucrats' attitude somewhat smacks of bias

SANKEI (Page 12) (Full)
April 24, 2008

Hisahiko Okazaki, former ambassador to Thailand

I have not have an opportunity yet to watch the film "Yasukuni." But
I have the impression from what I heard about the movie from those
who already saw it that a Japanese sword, Yasukuni Shrine, and
Emperor Showa were used to provide a wartime Japan backdrop for the
Nanking Incident and a contest to kill 100 people using a sword (but
the credibility of the footages of the Nanking Incident and that
contest is questionable).

I won't deal with the artistic quality of "Yasukuni." But if I were
a Chinese who, as expected of foreigners, has little knowledge about
Japan, it would be no wonder that as one artistic approach, I, too,
would use such a wartime Japan backdrop to create an image of the
Japanese in wartime.

And if I were motivated by a political desire to propagandize the
Nanking Incident and the contest to kill 100 people using a sword, I
might be proud of the results of the film.

The question is whether it was appropriate to give support to the
film from the Japanese taxpayers' money. Items that can be subject
to subsidies from the Japan Arts Council (JAC) are: (1) the

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production process of Japanese movies ranging from planning to
completion; and (2) movies free from any commercial, religious, and
political propaganda.

Let me first examine whether "Yasukuni" is a Japanese film. The
production company is a Japanese firm, but all its executives are
Chinese. After the JAC informally decided to subsidize "Yasukuni," a
Beijing-based film company joined the production company as a
co-producer.

When it comes to political propaganda, dealing with the Yasukuni
issue in itself is seen as having some kind of political motive from
an objective standpoint. Also, an act in itself of describing the
Nanking Incident and the contest to kill 100 persons using a sword
as facts instead of describing them by fabricating or dramatizing
them, is viewed as a political problem at present.

Agency for Cultural Affairs' grave responsibility

All those circumstances considered, it is obvious in everybody's
eyes that a considerable sophistry is needed to justify the
government's offer of a subsidy to the film "Yasukuni". What the
records of questions and answers exchanged in the Diet revealed was
the fact that the government narrowly dodged criticism by making
awkward replies.

Narrowly dodging criticism is not at all praiseworthy, however. I
also have had the experience of serving as a government official,
but I don't understand why the bureaucracy took the risk of making
such awkward answers. Subsidies are paid from the taxpayers' money.
Given this, it is only natural for bureaucrats to be prudent enough
to avoid placing themselves in a compromising situation and also
avoid doing anything that may incur suspicions.

Bureaucrats would do so only when they want to let a strained
interpretation passable while well aware of a possible backlash from
the public's common sense.

When officials from the Agency for Cultural Affairs (ACA) were at a
loss how to answer questions in the Diet, they simply said instead
of answering questions that the decision was made by the Documentary
Film Committee. But the committee members are all movie critics, and
they can deal with the artistic quality of the film and (they would
appreciate the artistic intention of the producer as I do so), but
they do not appear to be experts capable of judging whether it was
appropriate for the government to subsidize the film from a
political viewpoint.

Among the committee members, there is an activist of the Article 9
(of the Constitution) Association and an activist opposing
Yasukuni's enshrinement of (Class-A war criminals), but there seems
to be no member whose stances are the opposite to those activists in
terms of political ideology.

In such a committee, it is self-explanatory that a conscience-driven
opinion, if voiced even by a small number of members, can set a
trend in the committee.

The ACA has a supervisory responsibility for the committee members,
but it needs to check the committee members. The ACA should examine
recommendations made by the committee, but it apparently swallowed
them without doing so or winked them in a conscience-driven way.

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This attitude of the ACA must be called into question.

Gaps also found in generations

I am also concerned that there seems to be the question of
generational gaps (as to the subsidy problem). When an erroneous
report on modifications to history textbooks were made in 1982,
Education Ministry officials were those in my generation. But
Education Ministry officials who proactively championed the "chief
cabinet secretary statement" some years later were the
next-generation bureaucracy who received education under the Japan
Teachers' Union.

Looking at the subsidy problem involving "Yasukuni," I reached the
conclusion that any bureaucrats would not take the risk of doing so
unless they were conscience-driven.

I think it was only natural that as persons responsible for state
affairs, lawmakers called for a preview in order to examine whether
it was appropriate for the government to subsidize "Yasukuni."

Because of this move by lawmakers, some movie theaters might have
decided to cancel plans to screen "Yasukuni," but this is a
secondary matter. I think it is regrettable to see that movie houses
appeared swayed by lawmakers' moves. My desire is that as many
Japanese as possible watch the film.

After people watch "Yasukuni," they will come out with a variety of
opinions as to the contents of the film because of differences in
their political inclinations. I hope to see them judge whether the
film is worth enough for the government to subsidize from the
taxpayers' money. The outcome will presumably be self-evident.

I expect that will help remedy some bureaucrats' negligence and
their tendency to do something in a conscience-driven way.

SCHIEFFER

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