The DPRK food situation: Too early to break out the champagne

February 18th, 2009

Stephan Haggard and Marcus Noland
Asia Pacific Bulletin
No. 27, February 5, 2009

Abstract
North Korea has suffered chronic hunger problems for two decades. A famine in the 1990s killed up to one million people and shortages have remained endemic. Most observers believe that the recent harvest is the best in years, but even under optimistic scenarios, food-related distress is likely to continue. Stephan Haggard and Marcus Noland discuss North Korea’s current food situation and the prospects for the future.

Download the full paper in PDF here

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Rice prices plummet in North Korea

February 18th, 2009

Institute for Far Esatern Studies (IFES)
NK Brief No. 09-2-18-1
2/18/2009

The online newsletter Open News for North Korea has recently reported that the cost of rice in the DPRK has fallen drastically. The report stated, “The price of rice in a number of cities, including Pyongyang, Nampo, Sinuiju, Hyesan, and Chungjin, has fallen an average of 300-400 won since the middle of last month,” but noted, “however, this is the nominal price, and considering that North Korea’s exchange rate has risen 10-20 percent compared to the Chinese Yuan, the actual fall in price is even greater.”

The price of one kilogram of rice in Pyongyang at the end of last month was 1700-1800 won (earlier prices were from 2000-2100 won); In Pyongsong and Soonchun, 1700won (2100 won), in Sinuiju, 1660 won (2000 won), in Hyesan, 1800 won (2500 won at the end of November), and Chungjin, 1800-1900 won (2000-2500 won at the beginning of January).

The newsletter attributed the drop in prices to the fact that rations from last year’s harvest were distributed to farmers on collective farms in January, and those farmers are now selling those rations in markets. The article explained that prices drop in January and February every year for the same reason.

In addition, North Korea reported that last year’s harvest was the largest in recent years, and that the North had imported large quantities of foodstuffs from China over the past several months. The newsletter stated that this, along with U.S. food aid shipped to Nampo, further added to the drop in prices.

“The North Korean Cabinet handed down an internal order to exchange foreign currency gained through exports until the end of December last year to import as much food as possible,” and the North imported 500 tons of Chinese rice through Sinuiju by January 9. Authorities insisted that after this first import, “[the North] will continue to exchange foreign currency for rice.”

These rice imports are being handled by mining and trade offices, including coal mining companies, the Central Party Underground Special Offices (Reungra Office 88, etc.), Kangsung Trade Office No. 54, which is controlled by the North’s military, Ryongaksan Trade Office, Eunpasan Trade Office.

North Korea is setting aside some imported rice as emergency stores, explaining that they are “in case South-North tensions escalate.”

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Doing Business with North-Korea Seminar

February 18th, 2009

Wednesday 4 March, 14:00 – 17:30
KVK The Hague, Randstadzaal
Koningskade 30, 2596 AA  Den Haag

This event is sponsored by GPI Consultancy (see previous posts here).

Speakers include:

Willem Lobbes, boardmember of the Dutch Korean Tradeclub, Director of Lobbes Insurance Consultants

Representative of the DPRK Embassy in Bern, Switzerland

Egbert Wissink, CEO of NovolinQ BV

Professor Evert Jacobsen, University of Wageningen

Kees van Galen, CEO VNC Asia Travel
 
Paul Tjia, Director of GPI Consultancy

The AGENDA can be found here (PDF).

The REGISTRATION FORM can be downloaded here.

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UK parliamentarians visit Pyongyang churches, urge US normalisation

February 16th, 2009

By Michael Rank
Link to full report by Lord David Alton and Baroness Caroline Cox  at the bottom of this story

changchung.jpg

Above: Alton and Cox present a Bible to Jang Che On, chairman of the Korean Consultative Society of Religious Believers
Photo by Mark Rowland
http://mnrowland.blogspot.com/

A British politician who visited North Korea this month to investigate the country’s human rights record and promote dialogue said she had been pleasantly surprised to come across an active Protestant seminary in Pyongyang with about 10 students and a church with a Bible on every pew.

Baroness Caroline Cox, who visited Pyongyang as vice chairman of the All Party Parliamentary Group for North Korea, also urged the United States to end hostilities with North Korea and open an embassy in Pyongyang, just as Britain did 10 years ago.

Cox, a devout Christian, said she was sure the congregation at the Protestant Pongsu church included many genuine worshippers as well as some officials and informers, and that the church was not simply a propaganda showcase for the regime.

She told NKEW that the church was “surprisingly big” and that the attached seminary had been opened with South Korean support and that South Koreans had apparently provided the Bibles. She was told that about 300 people regularly attend Sunday services.

She said she that although “there is a show element in it”, she did not believe the seminary could be written off simply as an empty showcase, as she had to push quite hard to visit it and some officials did not seem aware of its existence.

Cox said Choe Thae Bok, chairman of the Supreme People’s Assembly, repeated an official invitation to the Archbishop of Canterbury, Dr Rowan Williams, to visit the DPRK. Choe met Williams when he visited London in 2004.

Cox and the Parliamentary Group’s chairman, Lord Alton, a fervent Catholic, also visited the recently opened Russian Orthodox church which she described as “extremely beautiful” and where they met two North Korean priests, Fathers Thaddeus and Theodore.  She said the Moscow-trained Father Thaddeus was particularly warm and open, but she added that the congregation appeared to consist entirely of Russian diplomats and business people rather than North Koreans.

The delegation also, somewhat surprisingly perhaps, called for senior North Korean military officials to be invited to visit Sandhurst, Britain’s premier military academy.

Cox said their visit, their second to Pyongyang, was aimed at building “bridges not walls” and that she believed there are “people [in North Korea] who genuinely want to dig themselves out of the hole they have been dug into by the Great Leader.” She and Alton first visited North Korea in 2003.

The two said in a statement that they were were “less than encouraged by our visit to Changchung Catholic Cathedral and our meeting with Mr Jang Jae On, Chairman of the Korean Consultative Society of Religious Believers.

“The delegation expressed their dismay at the continued failure to provide a resident Catholic priest and the lack of progress in normalising relations with the Holy See.

“The delegation emphasised to Mr Jang that if the DPRK wishes to send a positive message about its respect for religious freedom, as enshrined in its Constitution, it would address these two fundamental issues.

“Concerns were also raised about why the importing of Bibles should remain a serious offence, which has been treated in some cases as a capital offence. The delegation gave Korean Bibles to their hosts as a sign of respect and we hope these were received in the spirit in which they were given.”

On the political side, the group’s recommendations include:

1. “a call to the incoming Administration of President Barack Obama to instigate a formal cessation of hostilities and normalisation of relations with the Democratic Peoples republic of North Korea (DPRK). The United Kingdom established a diplomatic mission in the Pyongyang ten years ago; this would be an opportune moment for the United States to do the same.

2. “a recognition of the error of not linking human rights and security concerns in the six-party talks – constructive critical engagement with Pyongyang is recommended: a ‘Helsinki Process with a Korean Face.’

“a call for renewed concerted international pressure to grant access to Professor Vitit Muntarbhorn – the United Nations Special Rapporteur on Human Rights, access to the DPRK. He has estimated that 400,000 people have died in the camps in the last 30 years.

3. “encouragement of the DPRK to allow greater freedom of information for its citizens and access for aid agencies to carry out their work – in particular in the areas of capacity building and health care.

Their principal findings include:

1. deep concerns over human rights, humanitarian and security issues – issues they raised during high level meetings with DPRK government ministers and officials.

2. the consequences of deteriorating relations between North and South Korea which could jeopardise a historic opportunity for progress.

3. observations about political and religious liberties, including some positive developments which were noted and appreciated.

Their full report can be read  at the London/Korea Links web page.

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Kaesong goods to find export market in India

February 14th, 2009

The South Korean and Indian governments are finalizing a trade concession agreement that will lower Indian import tariffs on some goods produced in the Kaesong Zone. According to India’s Economic Times:

Sounds odd, but some select North Korean goods may soon get special trade concession in India after New Delhi signs a trade pact with South Korea. In fact, the North Korean city of Gaesung will emerge as a major beneficiary as part of the terms and conditions of the India-South Korea comprehensive economic partnership agreement (CEPA), which is likely to be signed soon, sources close to the development told SundayET. The North Korean city is located just 60 km north of Seoul, the capital of South Korea.

Though Indian negotiators initially showed reluctance to such a deal, South Koreans were very keen as many of their companies have invested heavily in the region and set up many factories in that city, using cheap North Korean labourers. Goods produced at Gaesung include low-end engineering products, leather goods, jewellery, chemicals and textiles.

When contacted, commerce secretary GK Pillai confirmed to SundayET that India would extend the same concession to goods produced at Gaesung too. “It’s a matter of 30-40 products which are not very high-end. Those are not cars or steel. Yes, Gaesung is in North Korea, but it’s very much a part of South Korea’s economic co-operation plan. Both the Indian and the Korean (South Korean) governments have agreed to the CEPA, and it should be coming into effect from June or July this year,” he said.

Once the partnership agreement is signed, it will be the first such instance in which India recognises the outward processing concept and gives the same status to goods produced outside the negotiating country with those produced inside. Though Mr Pillai said there was no issue regarding Gaesung, sources close to the development added that India was not very keen on allowing those products.

“India was opposed to the idea as other countries too may demand the same model later. What if a country entering into a trade agreement with India chooses a place in Bangladesh or Pakistan for outward processing,” said a senior government official.

The trade volume between India and North Korea is quite insignificant if it’s compared with that of India-South Korea. During FY08, India’s import from North Korea was worth a mere $161 million, which was 2.6% of that from South Korea. In case of exports, the figures are somewhat better. The total export from India to North Korea was $850 mn in FY08 which was 29% of India’s export to South Korea.

The Bank of Korea, the South’s central bank and most cited source of DPRK economic statistics, estimates North Korea’s gross exports (to all countries except South Korea) in 2006 and 2007 at $950 and $920 (USD in millions) respectively.  They estimate the DPRK’s imports in these years at $2,050 and $2,020 (USD in millions) respectively

According to the data in this article, North Korea’s exports to India ($161 million) are a non-trivial 17.5% of its total exports (assuming the 2007 number is approximately current and changes in inflation and exchange rates are trivial).  The DPRK’s imports from India, $850 million in 2008 (according to the article), are a whopping 42% of North Korea’s estimated 2007 total imports.  Either India is now one of the DPRK’s major trading partners, or there was a short-term spike in DPRK-India trading activity, or these numbers are fishy.

Setting this debate aside, a further question arises—how will these transactions be recorded?  Since the DPRK has a trade relationship with India, will goods from Kaesong be flown/shipped from the DPRK to India and counted as North Korean trade, or will goods be shipped from Kaesong to South Korea and then sent to India—to be counted as South Korean trade? 

My suspicion is that the Kaesong goods will be counted as South Korean merchandise trade since this is a South Korea-India trade deal.  If the goods are recorded as South Korean, agreements of this sort will make it much more difficult in the future to determine the DPRK’s trade volume using mirror statistics.  This is because the country of origin records kept by the DPRK’s trading partners will show goods produced in the Kaesong zone as originating in South Korea.  As a result, the DPRK’s merchandise exports could go underestimated.

Read the full story here:
Ever heard of Gaesung? Gear up for its products
The Economic Times
Shantanu Nandan Sharma
2/15/2009

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Kangsong Taeguk and the Chollima campaign

February 14th, 2009

This week the Wilson Center’s North Korea International Documentation Project (NKIDP) held a conference on the DPRK’s chollima campaign and the first five year plan.  For the conference, the Wilson Center published a collection of declassified archival documents.

nkidp_documentreader.jpgThe volume consists of select (East) German, Polish, Chinese, and Czech archival documents that provides context for discussion on North Korea’s Chollima Movement, launched in the mid-1950s and recently revived by the North Korean leadership to make the DPRK a “strong and prosperous” state by 2012. The collection, compiled by NKIDP is by no means comprehensive, however, in selecting the materials, the editors sought to include some of the most important materials available and made a substantial effort to mine relevant official archives. The document reader is organized chronologically, starting with December 1956 and ending in May 1963.

Download a PDF of the document here.

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Teach English in Pyongyang

February 14th, 2009

As reported last year, the British Council in Beijing is recruiting English teachers to work in Pyongyang.  According to Yonhap, the number of expats living in Pyongyang to teach English was recently increased from 3 to 4. According to the story:

Last September, North Korea moved up the start year of English education to the third grade from the sixth, Seoul officials said.

“The DPRK government continues to support this program, and we take this as evidence that they give importance to raising the standard of English in DPRK schools and universities,” Bilbow said in an email interview with Yonhap. DPRK is the acronym of the North’s official name, the Democratic People’s Republic of Korea.

With access to native English speakers scarce in the communist state, North Korea asked Britain for assistance after the two countries established diplomatic relations in 2000. The British Council started the teacher trainer program two years later.

British instructors, recruited among those who have a diploma in Teaching English as a Foreign Language with at least three years of work experience, teach a small group of elite university students and local English teachers who will later be deployed to provincial education universities and schools.

Bilbow said the program is now available at three of the top North Korean universities in Pyongyang — Kim Hyong Jik University, the Pyongyang University of Foreign Studies and Kim Il Sung University. About 150 students and in-service teachers are taking the courses at each university, he said.

The program, the only one offered in the North by native English speakers, has the full support of the Pyongyang government, Bilbow said.

In a show of such support, Choe Thae-bok, chairman of the North’s parliament, Supreme People’s Assembly, told a visiting British parliamentary delegation last week that his granddaughter was learning English from British native speakers and asked the delegation to help enlarge the program, according to Radio Free Asia on Tuesday.

“In DPRK, exposure to the wider English language teaching community has been scarce, though the project has done much to bridge the gap,” Bilbow said.

“In time, it will mean improved English language education which in turn will allow DPRK citizens to access the educational resources and opportunities that are available to competent English users worldwide,” he said.

Cho Jeong-ah, an analyst with the state-run Korea Institute for National Unification in Seoul, said the North Korean government closely monitors global educational trends and adjusts its education system. Pyongyang believes English education will help enhance its relations with other countries and boost its economic drive, Cho said.

“North Korean natural resources are limited, and its relations with the United States, which can draw economic assistance, won’t be resolved overnight. North Korea seems to be trying to reach its goal by developing human resources,” Cho said.

Learn more about the British Council’s English education program herePDF here.

Read the full Yonhap story here:
N. Korea welcoming native English teachers with open arms
Yonhap
Kim Hyun
2/13/2009 

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North Korea’s transformation: A legal perspective

February 12th, 2009

The Institute for Far Eastern Studies (IFES) published an interesting paper (with the above title) on legal reform in the DPRK.  Below are some highlights.  Links to the entire paper at the bottom.

As citizens have been left without state provisions for subsistence since the state did not have the material resources to supply the people through its central rationing system, the vast majority of individuals and organizations had to support themselves. Legitimizing commercial and market activity and expanding the scope of private ownership were a part of this effort. One of the most important laws reflecting this transformation is the Damage Compensation Law (sonhae bosang-beop), which is the North Korean version of a general torts law. This law holds an individual or any legal entity liable for its tort when damage is inflicted. Monetary compensation is the rule, while restoration is allowed when possible.

Under the socialist system, where the state is responsible for the provision of a citizen’s livelihood, tort law was of little use. Even in the case of death, one’s family would not suffer economically since the state provided sustenance rations. However, with the collapse of the public distribution system, the North Korean authorities could no longer maintain their socialist system. Since an individual now has to rely on his or her own devices, the loss of the employment, for example, directly inflicts a financial burden on the individual or family. Therefore, damage to property or person should be compensated for by the responsible party. Therefore, the new damage compensation law acts as a new mechanism for the protection of private property, and strengthens individual responsibility for negligent acts that inflict damage on others.

and…

Relaxation of law and order, along with the laxity of organizational control due to economic difficulties, changed individual attitudes toward government authorities and organizations in which these individuals were members. Individuals became more independent from the state and its organizations, since both the state and more directly engaged organizations lost important means of control over individuals in society due to the lack of resources and the inability to provide basic necessities to the people.

Under these circumstances, individual victims had no appropriate method to seek compensation for damage through an official dispute resolution process. This has led to an environment in which self-remedy has become the rule, rather than the exception. Although new criminal law punishes those who have used force in asserting their rights, there is no effective means of dispute resolution outside of taking advantage of officials willing to look the other way in exchange for favors, or hiring thugs to more directly resolve disagreements. Citizens can buy justice through bribes, and law enforcement officials are especially helpful in these endeavors when their palms are greased. This is much more economical as well as effective than bringing a case to the relevant official agency, which is generally incapable of resolving problems and instead further exploits the situation.

On courts and lawyers…

For example, the most prominent role of the court in North Korea, where other types of lawsuit are very unusual, was to handle divorce settlements, since divorce through simple agreement of the two parties was not allowed. Ordinary citizens went so far as to perceive settlement of divorce to be the most important role of the court. Criminal cases were also unusual. Political crime is handled through a non-judicial process, while many deviances are resolved through unofficial processes within more local organizations. The role of the court in resolving disputes was negligible, aside from divorce. Since the role of law enforcement agencies is to protect the state and secure the socialist system, the most important qualification for them is not legal expertise, but rather, loyalty and devotion to the North Korean ideology and system.

On the other hand, the Lawyer’s Act of 1993 prescribes the required qualifications of a lawyer. Those who are eligible to work as lawyers are those who are certified legal professionals, those who have working experience of no less than 5 years in legal affairs, or those who have a professional license in a certain area and have passed the bar examination after a short-term course in legal education. This qualification for working as a lawyer signifies that the state wants to equip the judicial system with legal professionals. Although there is no explicit professional qualification for a judge or prosecutor, we may assume that legal professionals have been elected or recruited in practice. This trend is likely to be reinforced as these social changes continue to unfold.

New provisions were also introduced to reinforce the judicial system. For example, interference with a law enforcement official’s performance of duties is now a punishable offence ; Threatening a witness or exacting revenge has been criminalized ; Non-execution of judgment will now be punished. Although the introduction of these provisions was an expression of the government’s effort to bring in a more effective judicial system, it would not be an easy task under the vague status of transformation. The state is very cautious and reluctant to undertake bold or fundamental changes due to concerns about political instability. Therefore, it takes time for various coherent mechanisms to fully support a market system.

You can download the entire paper in PDF format here.

You can read it on the IFES web page here.

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Orascom attracting competition

February 12th, 2009

According to Telegeography:

Vietnamese military-owned telco Viettel has announced plans to expand its network to North Korea, Cuba and Venezuela, according to reports in local paper Thanh Nien Daily. Tran Phuoc Minh, deputy director of Viettel, said the company is hoping to hold negotiations with the three countries in order to gain a foothold in their still relatively underdeveloped wireless markets. The cellco expanded its network to Cambodia last year, where it signed up 100,000 wireless subscribers after two months of pilot operations, as well as Laos, where it hopes to attract 50,000 subscribers this year. According to TeleGeography’s GlobalComms database, Viettel had a subscriber base of 28 million at end-2008.

Read the full story here:
Viettel plans network expansion to North Korea, Cuba, Venezuela
TeleGeography
2/6/2009

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DPRK announces military personnel changes

February 12th, 2009

UPDATE 2: According to Yonhap:

North Korean leader Kim Jong-il appointed his loyal aide to the No. 2 post in the National Defense Commission on Friday, state media said, another sign of the aging leader consolidating his circle.

O Kuk-ryol was named the commission’s vice chairman, second only to Kim, said the North’s Korean Central News Agency.

North Korean media have said little about O, considered to be a combat-savvy veteran who served as the North’s air force commander and chief of the operational department of the ruling Workers’ Party.

Baek Seung-joo, a Seoul-based analyst, said O helped Kim Jong-il win support from the military in the early 1980s after he was tapped as successor of his father and North Korean founder Kim Il-sung.

“O is a senior military figure whom Kim Jong-il trusts,” Baek said.

O, 78, replaces Kim Yong-chun, who was recently promoted as minister of the People’s Armed Forces, the counterpart of South Korea’s Defense Ministry.

N. Korean leader promotes loyal aide in military shakeup
Yonhap
2/20/2009

UPDATE: A short biography of Kim Yong Chun (Big h/t again to Mike):

Born 1936, Kangwon Province

Education
Mangyongdae Revolutionary School
Kim Il Sung University

Positions Held
1960: Secretary, South Phyongan Provincial Committee
1980: Alternate Member, CCKWP (October)
1982: Lieutenant General, Korean People’s Army (year presumed)
1986: Director-General, Strategy Department, delegate to 8th SPA (November), and member of CCKWP (6th term, 12th plenary session, December)
1987: Order of Kim il Sung Award (April)
1990: Delegate, 9th SPA, representing Solbong, Kangwon (April)
1992: Appointed General, KPA (April)
1993: Director-General, General Munitions Mobilization Bureau, KPA (October)
1994: Commanding Officer, KPA Sixth Army Corps (March) and member of Kim il Sung Funeral Committee (July)
1995: Member of O Jin-u Funeral Committee (February), appointed Vice-Marshal and Chief of Staff, KPA (October)
1998: Delegate, 10th SPA (July), appointed to the NDC (September)
2007: Elected Vice Chairman of the NDC, at the ninth session of the 11th SPA (April)
2009: Appointed as Minister of People’s Armed Forces (February)

Ongoing: Member of the CCKWP and the State Funeral Committee

According to KCNA, Ri Young ho was last promoted in 2002:

Pyongyang, April 14 (KCNA) — Kim Jong Il, Supreme Commander of the Korean People’s Army, issued order no.00152 to raise the military ranks of KPA commanding officers on the occasion of the Day of the Sun. According to the order dated April 13, Kim Yun Sim, Kim Jong Gak and Ryo Cyun Sok were promoted to generals.

The military rank of colonel general was conferred on Paek Sang Ho, Kang Yong Ho, Ri Thae Il, Kim Yang Jom and Pak Sung Won and that of lieut. General on Ri Yong Ho, Ri Yong Gil, Hwang Hong Sik, Pak Su Chol and Pang Kuk Hwan. Ri Yong Rae and 39 others were promoted to major generals.

Coincidentally, on that same day  in 2002 KCNA announces that Jang Song Taek’s brother was given a military promotion:

Military rank of KPA vice marshal conferred on Jang Song U

Pyongyang, April 14 (KCNA) — The military rank of vice marshal of the Korean People’s Army was conferred on Jang Song U, according to the April 13 joint decision of the Central Military Commission of the Workers’ Party of Korea and the DPRK National Defence Commission.

ORIGINAL POST:
According to KCNA yesterday: 

Minister of People’s Armed Forces and Chief of General Staff Newly Appointed in DPRK

Pyongyang, February 11 (KCNA) — A decision of the DPRK National Defence Commission and the Central Military Commission of the Workers’ Party of Korea was released on February 11 in the name of Kim Jong Il, chairman of the DPRK National Defence Commission and chairman of the WPK Central Military Commission.

Vice Marshal of the Korean People’s Army Kim Yong Chun was appointed as minister of the People’s Armed Forces of the National Defence Commission of the DPRK and KPA General Ri Yong Ho as chief of the KPA General Staff, according to the decision.

Former Defense Minister, Kim il Chol, was 70 when he was appointed to the post in 1998.  According to the media at the time:

North Korean leader Kim Jong Il has picked Vice Marshal Kim Il Chol, a close confidant, as defense minister, virtually completing a reorganization of the military, the official Korean Central News Agency (KCNA) reported Tuesday.

The KCNA report monitored in Tokyo said Kim Il Chol, about 70 years old, was promoted from first vice minister to minister of the People’s Armed Forces.

The post of defense minister had been vacant since the death of Choe Kwang in February 1997.

Kim Jong Il issued the order Monday in his capacity as chairman of the National Defense Commission (NDC), a post which makes him North Korea’s head of state under the revised Constitution.

The Supreme People’s Assembly, the North’s parliament, revised the country’s 1972 Constitution on Saturday, abolishing the state presidency.

Kim Il Chol was a frequent companion of Kim Jong Il, the supreme commander of the North Korean army.

These changes come at the same time as other personnel changes are announced.  See related posts here and here.

Hat tip to Mike.

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