Ireland’s Failings

For obvious reasons, Ireland has been a prominent feature of the Marginal Revolution blog, one of the best and most widely-read economics websites in the world. Tyler Cowen offers the following summary of Chapter 5 of Fintan O’Toole’s new book.

From Marginal Revolution:

“How Rich Was Ireland Really?

Not as rich as they thought. I’ve been reading Fintan O’Toole’s excellent Enough is Enough: How to Build a New Republic. Mostly it is an expose of Ireland’s crony capitalism and bad political institutions. On economic issues, chapter five offers up the following:

1. During the boom years, property accounted for 72 percent of all assets.

2. For infrastructure, Ireland ranked 26 out of 28 OECD countries.

3. Ireland had a higher share of slow fixed internet connections than in any other comparable country.

4. In terms of R&D or patents, Ireland was well below the OECD average in per capita terms.

5. In the OECD “human and income poverty” rankings, Ireland was 23 out of 25 countries, sandwiched between the United States and Mexico.

6. The country’s health care and educational systems are considered subpar.”

The overreliance on property is now something even the government takes as given but it is worth debating whether our health and education systems are really subpar in the sense mentioned and, in general, whether the whole Celtic Tiger was an illusion or not. There are plenty of things wrong with our education system in Ireland but is it really “subpar” in the sense of being worse than comparable countries? In terms of the health system, I will let commentors weigh in with opinions.

It is worth keeping in mind the substantial gains in life expectancy that occurred even during the late Celtic Tiger period. Life expectancy for people over 65 was the same in 1986 as it was at the foundation of the state and increased dramatically through the 90s and 2000s. We do not have precise evidence on what exactly drove these increases but it would be wrong, in my opinion, to say that we did not make health gains during this time. And this is not to excuse political decisions that saw vital vaccines and treatment of people with cystic fibrosis given lower prominence than the breeding of race horses. But it is worth having an open debate about where the country stands from a developmental perspective as well as a fiscal/monetary perspective. I released a paper recently called “From Angela’s Ashes to the Celtic Tiger: Early Life Conditions and Adult Health in Ireland“. Everytime I have presented it, someone says something like “it should be the other way around” or “you should add “and back again””. I find it hard to think of the broad progress in human development in Ireland in the last 50 years and not have some sense of belief in the potential of the country and some degree of pride of where it has come, even in the face of the current mess. If you look at the health of Irish migrants to the UK over the last 50 years you see huge improvements there also with recent migrants performing as well as or, to a large extent, outperforming natives compared to the 1950s and 1960s migrants who, as an average, are in far worse physical and mental health. It is worth beginning to ask whether what we are facing is a large fiscal and monetary blip with a forseeable exit point or a genuine developmental structural break where the real and profound gains in human welfare seen in Ireland are in danger of being reversed.

44 replies on “Ireland’s Failings”

To prevent heart attacks amongsst folk not familiar with the blog, it might be worth pointing out that the Cowen in question is not Our Glorious Leader, who might not be considered an expert on economics.


Thank you Liam!

I’ll read your paper in more detail but one thing which has really bugged me is the constant referral to our ‘third world health system”. I’ve never been in the third worlds but I’m pretty sure our health system is nothing like it.

Of course if An Taoiseach was running a massively popular US economics blog, that might explain his less impressive performance at the day job.


I used to live in the Third world and those analogies are way off. In most of the third world you only get into hospital if you have enough to pay the bill. Like the US, actually. Irish women don’t have to flog their dowries to get into a maternity hospital.

Re Broad band etc,

Strangly enough if you require to see the state of the roads around Dublin you can go to the Dublin city website and pull up camera pictures of the M50 and other areas in the city. These cameras are updated frequently, every 5 or 10 minutes etc.

I have not found any other camera site for Manchester or any other major city. Perhaps if other commentators are aware of major city real time traffic updates on the www they could let mention it.

I have shown several people outside Ireland the traffic website, and they have expressed amazement. People can be seen crossing bridges in town, cars stopped at red lights, freezing fog descending on the M50 etc.

So while it may be true that we are behind the curve a touch, I don’t think we are too far behind. In fact I remember a recent article by IBM which was dealing with a large client in Paris. The task involved computation of large data arrays. The client asked where was the computer located, in fact the mainframe was located in Ireland. The data was sent by secure connection on the www, processed in Ireland and the results sent back to Paris.

So for if major corporations are able to carry out this sort of communication then we must be doing something right.

We require to be careful that we don’t rubbish ourselves too much.
The world is not a level playing field, every country has it’s good points and bad points.

The only reason item 4 on the list was even respectable was that the royalties from patents – where r&d was in Irl – were exempt from tax. Just abolished, so all that transfers to the UK where it has just been introduced!!!

Education is hampered by the absurd compulsory diversion of teaching and student time and effort into a language that is not internationally relevant. All the way up to 18 too, and adversely affecting the progress of the very talented who are not similarly talented at 2nd or 3rd language skills.

Main use seems to be local protectionism for the legal and teaching professions etc.

Stop hampering the opportunities for some brilliant scientists and mathematicians in this way.

@ martindlg,

Good one, I will check it out later. Strangely that did not come up in my search a few days ago.

All sorted now.

@Liam Delaney

Thank you for your thought-provoking posting. (BTW it is Tyler Cowen who should have won the Nobel Prize two years ago, not the paleo-Keynesian dinosaur Paul Krugman. But that is another story.)

You write:

I released a paper recently called “From Angela’s Ashes to the Celtic Tiger: Early Life Conditions and Adult Health in Ireland“. Everytime I have presented it, someone says something like “it should be the other way around” or “you should add “and back again””.

Actually, I think this voelkisch reaction is quite understandable. It is better to be wealthy than to be poor. But it is better to remain poor than to become wealthy and then even slightly poorer again. That is the plight of the Irish people. They compare their quality of life not with what it was like during the 50s or 60s — the dark ages of priestcraft etc. — but with what it was like until, say, late 2008. Subjectively they are worse off. Therefore they are worse off. You can present any indicators you like — longetivity, health, level of education, access to the Internet, etc. — but the ornery Irish person’s benchmark will still be the ‘rising tide’ of the late 1990s and early 2010s. Those days are over — even if the current ‘austerity’ is still luxury compared with the pre-tiger era.

One may also question whether life expectancy is as important an indicator as is often assumed. Peter Skrabanek wrote:

There are fates worse than death. Longevity drags if you have buried your children. Poverty, loneliness, incontinence, dependence, and dementia are some of the final rewards. Not everybody hopes for a long life followed by death from boredom. Plato in The Republic recalled the gymnastic teacher Heroditus whose skills enabled him to reach old age in a prolonged death struggle. Hesiod’s golden age died swiftly, as though in sleep: they had no old age. Why be afraid of sudden death from coronary artery heart disease if you cannot regret it the day after?

~ Peter Skrabanek, Preventive medicine and morality. Lancet. 1986

Peter Skrabanek: 1940 – 1994. Fifty four years.

False Premises, False Promises:

To me the Celtic Tiger was an illusion. I attributed it to a phenomenon that has occurred throughout history which is a sudden rise in prosperity of a city state or quite often a city island state. The city state then enjoys a period of more than fifty years of unprecedented prosperity. Arguably Ireland enjoyed a quarter century of unprecedented prosperity. The question is why did we not last the extra quarter century that is the norm. Singapore continues to prosper as does Luxembourg, Lichtenstein, Monaco, Cyprus. Seriously, do we have self destruction built into the culture.

It was disgusting though – I hated every part of it.
There was a pointless aspect to the whole artifice that left a sour taste in my mouth.
I mean the place was appalling – now it alive with ideas for once.
The bread is not turned into the body of Christ , the wine is just wine – the whole shebang was a lie and a farce.
If we could bring down the entire European shadow banking sector my life would be complete.
We have the ring of power in our hands – lets use it rather then throw such power into the cracks of doom.

The biggest progress is probably in terms of our ability, as a country, to question authority. Poor countries with poor education standards for the majority and a small, but well educated privileged class, can only function with the support of a forgiving ideology. in Ireland’s case that was a catholic hierarchy that justified repression. The “freedom” to question, and the tools to allow people articulate their ideas effectively are available today. These, combined with a deep sense of dissatisfaction for opportunities lost should make the downturn more dangerous for the elite, but ultimately shorter lived.

I have been in the “Third World” a bit and anyone who compares our health service with the latter (Irish Times columnists included) should be taken out and shot. In much of the developing world there is fairly basic primary care and little or no secondary or tertiary care. So if you are seriously ill you suffer. Then you die. It is condescending and cynical to describe our services as comparable, whatever their deficiencies: your cat or dog probably gets much better health care than much of humanity.

@seafoid, kevin denny:

I think it is a bit simplistic to characterize the “third world” the way you do. In most of the developing world, there are two classes of care – much like in Ireland with its private vs. public. Of course the gulf between the two is a lot greater and the standards of public care are in general much worse, particularly outside major cities.

If the standards of private care were that bad, why would you have British and American medical tourists going to India for major elective surgery?

The Euro Health Consumer Index is an independent measure of the quality of European healthcare systems. In 2006 Ireland ranked 28th out of 29 countries. In 2009 that ranking had moved up to 13th of 33 countries.

“Ireland has been climbing steadily in the EHCI”, states Dr. Arne Björnberg, the Euro Health Consumer Index Director. “However, the Irish healthcare system seems to have a domestic ‘marketing’ problem – the responses to the patient organization survey, which is part of the EHCI research, give a much less positive picture than the official data”

In other words Joe Duffy et al have persuaded Irish people that their healthcare system is poor and under-resourced despite the fact that half of net tax income is spent on health.

Funny thing. Five years or so ago I read an article (cannot rem source – might have been theOilDrum) that forcast Ireland would slump from second wealthiest in E-zone to poorest! Thought the guy was a bit OTT – ‘pears he wasn’t.

Did some background reading and got more and more concerned. The analysis and conclusion were valid – in so far as they went.

Take our current fiscal/monetary predicament as a clear warning as a reasonably accurate description of our future economic situation – involuntarily pulled forward by about a decade or so.

If we can adjust to our ‘new’ situation – and introduce the necessary political reforms, then we will mitigate. However, if we fail to take the opportunity – whilst we still can afford to import almost all our energy needs, then we face several more episodes of the same mandatory economic compressions.

Bye-the-bye. If any of you have the unreaslistic assumption in your head that we will ‘grow’ out of this current predicament – I suggest you pay close attention to; 1. the actual production levels of crude and, 2. its price. Both are (currently) in the Red Zone!


ps: Access to clean water, improved sanitation, healthier nutrition, improved housing, access to primary healthcare – you WILL have a healthier population.

Ever heard of “An Englishman’s Food” – Sir Jack Drummond? Look up what this guy did for GB during WWII. The wheel has already been invented and shown to work!


@Liam Delaney,

The question you pose is at the end of your post is verging on the rhetorical – though the current fiscal and monetary problems are a bit more than a blip. The ‘comfortable majority’ has never had it so good, even if many will take a short to medium term hit in disposable income. But this leaves a large and growing segment of the population excluded for a variety of reasons. Quite apart from any moral, social justice or social cohesion reasons, it is in the self-interest of the ‘comfortable majority’ to consent to the allocation of resources and investment to break a potentially spiralling cycle of poverty, unemployment, vulnerability to crime and hopelessness.

It is one of the cruel ironies of politics everywhere that those who make the political case – and secure a measure of popular support – to make this allocation of resources and investment are most disposed to suppress the wealth-generating activities that would fund this.

I don’t know where he gets his figures from but Mr Ruairi Quinn is quoted in yesterday’s IT saying that up to 30% of teaching time in primary schools is spent on religion and Irish. No wonder we’re not so hot on maths, science etc

Well, O’Toole is both right and wrong. Right in that he is pointing out areas of development where Ireland was and is seriously lacking compared to its peers. (Frankly, comparisons with the third world are idiotic).

O’Toole is wrong in the sense that he ignores the areas where Ireland scores well, as mentioned in the post and some comments, there have been very substantial improvements in many areas.

A commenter above said that because we surged forward and then slipped back we feel even worse off. But it is nonsense to say that we would be better off with 80s level of development instead of where we are now after having experience the highs of the last decade. True, everyone feels hard done by with our sharply declining standard of living.

We have to accept that a) our standard of living, broadly defined, way overshot the productive capacity of our economy (and that of most of our neighbours) and that b) though we now suffer a sharp drop back, we are very far from being back to 1985. People under 30 probably have no reference point and so our current travails to them seem catastrophic, but they too will have to adjust to a standard of living that is more consumate with our real economic potential.

It is true that our health service underperforms relative to our expectations and our investment in it. Yet it was coming from a sustained period of low investment. It needs huge reform for sure in terms of allocations, stragegy, managment etc, but lets not forget this either: the health service today is dramatically better than it was 15 years ago. I cannot stress that enough. In terms of the volume of treatments it provides – hugely higher; in terms of the quality of care in many areas, such as cancer, or specialist care such as coronary, dramatically better; much higher capability all round. Anyone who has had serious treatment in one of our large specialist hospitals with their spectacular arrays of equipment knows how different this looked say 15 or 20 years ago. This is not an argument against continued efforts to improve, but an acknowledgement that we have had serious progress.

Or take our roads infrastructure. They are spectatularly better than 15 years ago.

Or in the world of business. It is not as if our development during the Celtic tiger is set now to nought. Our IT and supply chain management will retain the step change made over the last. And our bank of know-how in terms of running a modern business in a rapidly changing, complex, global market place – all that remains. (Indeed those businesses which survive the deep recession are bound to emerge as more resilient).

I went to (secondary) school in the 80s (Christain Brothers school, Donegal). Our science lab had less equipment than the average kitchen does nowadays, so we simply didnt’ do the experiments on the course. Our schools today deserve more investment for sure, but it is disingenuous to argue we are not still way ahead of where we were pre-Celtic tiger.

@Sporthog: we have amazing trunk internet speeds; we’re where the transatlantic cable comes ashore, after all. Our universities do data-processing for the LHC, which is only possible because of the extraordinary connectivity HEANet gives them.
But access to broadband for ordinary citizens is truly terrible. Our government-mandated solution for broadband access for the country is 3G mobile connection, which isn’t broadband! A 3G connection can be shared between up to about 5 people, to give bad-but-usable web-browsing access to all of them – if your connection to the phone mast is optimal. If you have 6 people who need web access in your startup in the wild back-country miles and miles from anywhere important that is, say, Meath, you can’t buy a second dongle, because that more than halves the usefulness of either.
It’s a technology with no upgrade path if you need to grow.

An OECD assessment of Ireland’s education system is here:
Broadly, we’re below average for Maths, above average for science and around OECD average for most other things. Sadly it shows declines in Irish results over the past 10 years.

Ronan Lyons has a good summary of post crash gains from the Celtic Tiger years here:

@Celtic Phoneix
Sure they don’t listen – in the long run it will not matter.

If they inflate debt it will be destroyed through loss of value of debt money , if they deflate debt it will be destroyed through default.
They (the banks) cannot create wealth , they sustain themselves by increasing consumption and building a dung heap of debt on top of this.

Consumption will have to decrease – it has reached its max as their fractional reserve greed has insured that the system is wildly out of equilibrium.
Their efforts to reduce consumption of the many to sustain a increased consumption of the few is fascinating.
It means that they do not understand the problem as even now they wish to spend all wealth on the here and now.
Then again they may wish to live the good life just a little bit longer – and to hell with the future.

@ Danny Haskins,

In general one needs to be careful about what any politician says, after all they can hide behind their Dail privilage. Politicians are free to spread black progaganda and ignorant hatred, or they can chose to make informed educated, sincere and honest truthful statements. Us mere mortals have no defence, we can be brought to court for libel and defamation of character.

There is agressive secularisation at work by certain organisations / groups / individuals in Ireland. This is evident in various sniping at religious organisations, trying undermining of God in public life.

It is only a matter of time when religious believers in Ireland will have to wear some external symbol on their clothes so that they can be visible at a distance. A bit like the horrible treatment of the members of the Jewish faith in pre war Nazi Germany, I believe they were forced to wear the Star of King David on their attire.

Unfortunately there are forces at work who believe that religious believers (of any faith) represent a threat to human freedom in Irish society.

Nothing like a bit of paranoia and twisted ,right wing logic to derail and otherwise good conversation. Ireland has improved massively in the last twenty years and maybe that improvement created some secularization but nazism? Maybe the recent child abuse reports and trials of abusing priests is all part of the conspiracy?

More likely it is a symbol of that improvement in both physical and intellectual well being. Ireland is confident enough to face the evils within without losing sight of what it is that makes us special.

@ Bklyn_rntr,

Thank you for your judgement. But lets not try and confuse the issue. I was not referring to child abuse, nor did I bring up anything to defend it, but since you have brought it up, perhaps I will clarify.

Those people who have worked to protect children from abuse should be commended. It is hard to comprehend the horror that has been inflicted upon these innocent people. But happened it has and it cannot be denied. Thankfully we have had numerous investigations, the application of Justice and more rigorous procedures to protect children for the present and the future. I sincerely hope this dark chapter of Irelands history will never be repeated. I am sure you would be of the same opinion.

But there are forces at work trying to get rid of any religious influences in our education system. Perhaps you are not aware of that from your position outside Ireland. It’s not secularisation which we have to be concerned about, but agressive secularisation.

@ Sporthog

Ireland is one of the most religiously tolerant countries you could find…mainly because the majority of people no longer have any interest in religion. In my book, indifference equals tolerance.

@ Jarlath,

While devout religious attendence may have dropped off (as you have mentioned), there are still a lot of people who remain spiritual.

But we require to be vigilant, for example if you chose to be religious or non religious, should you lose your job? Of course not.



The resources now, both in terms of physical and human capital, are in a different legaue from those in the ’80s. They should provide the basis for a sutained recovery, but we need to remove the burdens and barriers that will impede this recovery.


Religion has been a part of human behaviour since the dawn of civilisation; and so it is almost certain to remain. The RC Church in Ireland, similar to its sister church in Poland, or Shia Islam in Iran secured its post-independence position of power and authority by virtue of its previous role as a source of solace and a unifying focus of opposition to an external – or an externally-supported – tyranny. The evil deeds that have been committed under this regime – and often implicitly condoned by it – are bound to provoke a reaction and run the risk of outweighing in the public perception the huge amount of good that has been done.

And there have to be concerns about an organisation which seems reluctant to concede any aspect of the primacy of its internally-generated laws over the laws enacted under the authority of the people, about its continuing control of land, buildings and resources financed by the state and the faithful and about the elevation of faith over reason to the detriment of the teaching of science and the development of critical thinking.

@ Sporthog

I accept that a lot of people are still spiritual, but i believe Ireland as a country is finally moving towards a place where religion is a personal thing for people, rather than something imposed by others and the further down this track we go, the better. The authority and influence the church had in Ireland is gonand it wont be returning. Our schools are the prime example of this conversion, and the more time spent teaching english math and science, rather than religion, the better.

Religion and spiritual faith is an adults choice to make, children should be left free of it till they mature, but if there are parents out there who want to impose this on their kids from an early age, then they should do it themselves. A teachers job should be to teach, not convert/indoctrinate. What possible reason could there be to impose religious practices on children in schools….there should be as much time spent teaching knowledge of religions as there is spent on norse mythology or the roman empire.

Ireland continues to have an over abundance of illnesses associated with poverty. Diabetes, obesity, gastro intestinal, circulatory, alcoholism all associated with bad diet, lack of exercise and poor living conditions. Our high standard of living measured by the size of our TVs and the ownership of smart phones and upscale cars is but a misleading veneer masking serious endemic problems. Large income disparities and welfare for the rich will at some point be addressed.

Thanks Ossian – good post by Ronan and useful link to OECD. Agree with your assessment.

@Paul Hunt: unfortunately my question is not a rhetorical one. I don’t expect the gains to be reversed in the sense that we will go back to pre-Celtic Tiger life expectancy. But it is certainly worth debating whether the genuine improvements made in human welfare will start to stall in an environment where money and morale starts to run low. I have been blogging a lot about unemployment and the potential effect this might have on depression and mortality. Also, the potential for regional disparities that could see areas collapsing into spirals of very low employment and concomitant social and health problems are worth discussing. As pointed out above, we already have identifiable subsets of the population with dramatically lower health than others.

It would be worth another thread at some stage about people’s expectations in Ireland and how they influence our sense of welfare. There was a lot of talk in the last few days about going back to 2006 or 2004 or whatever. To understand people’s responses to a downturn it is important to understand who they are comparing themselves to and where they have come from in terms of their trajectory. We are only really getting a handle on these things now in economics. The other issue is people’s time perspective – if you are very firmly rooted in the here and now (and this can be due to personality or circumstances) then immediate cuts will feel a lot worse.

I know there is an issue here that if you have lent someone 1,000 euro and they come back to you and say that they wont pay you back but dont worry money doesnt make you happy, that this would not be acceptable to most people. There is a danger that governments will start tinkering with well-being indices as a way of distracting from their failures in the financial domain. But having said that it is infantile to equate human welfare solely with consumption and leads to a very distorted picture. This equation is what makes it possible for some commentars to use grossly exaggerated language to describe economic downturns, language better reserved for the effects of famine and war.

there are no ‘forces’. its just attrition, or natural attenuation, depending on your viewpoint.

I suppose Harold Wilson’s aphorism may be relevant; in an economy unemployment may be at certain percentage, but for an individual it is 100%.

If the present value of the stream of future costs to society (just in terms of output forgone and additional public service costs incurred) were taken into account society might be prepared to invest more to reduce and avoid it. I’m generally not in favour of governments spending money on make-work famine follies, but privatising the semi-states (in addition to increasing efficiencies and reducing deadweight costs) would generate funds to finance some useful infrastructure activities such as house insulation, roll out of high-speed broadband, water meters etc and re-skill some of the longer term unemployed. But the best answer is to encourage the return of some Keynesian ‘animal spirits’ in the traded sectors.

@ Paul Hunt, Jarlath,

We each have our views, and there is not enough space on this blog to discuss the issue fully and even if we had enough space we don’t have the time. However it is good to get a understanding of other commentators opinions, such as your own.

The sciences and other educational subjects do not make a full person. It’s the entire package, respect for your neighbour, not coventing somebody elses wife or property, do not kill or steal as well as the sciences and other educational subjets etc. Are these not good beliefs to pass on to the next generation?

If humanity has a spiritual side then should religious teaching not have a place in our educational system? There is evidence of spirtuality going back to the dawn of man. Spirtuality is a known, it is there.

A human being has a number of sides, physical, emotional and spiritual. Schools offer sport and intelluctual challanges, but the future of the spiritual side is in doubt.

What I am afraid of is a swing from one extreme to the other, where we had religious education (which might have been oppressive in some opinions) to where we will oppress people who are religious. Hence the term agressive secularisation.

@ Garo

India has some of the finest 5 star hotels in the world but what really counts is the fact that 660 million people don’t have access to a toilet.
And the health system is the same. Some real first class treatment and something else for the ones who don’t have a toilet at home.

@Liam Delaney

Recent mortality improvements in Ireland are mirrored in other countries (although there are huge differences by income level in the Irish case.)

I can’t see it falling back to 1986 levels.

@ Sporthog

“The sciences and other educational subjects do not make a full person. It’s the entire package, respect for your neighbour, not coventing somebody elses wife or property, do not kill or steal as well as the sciences and other educational subjets etc. Are these not good beliefs to pass on to the next generation?”

The virtues you outline above are completely independent of organised religion and spirituality. I am not spiritual and I have no love for organised religion, but i am as likely to hold to the above values as you are. Do you not see the latent arrogance in what you have said there?
Religion likes to hijack these virtues like they alone invented them or are capable of them. IMHO organised religion is just a direct result of mans need to believe in something unknowable combined with the desire of a few to hold sway over many. You say spirituality is a known, it goes back to the dawn of man, and i agree with you to a certain extent, but it is merely that facet of people that needs to believe in something unproveable because the alternative is often unpalatable….organised religion was ever just the exploitation of this fear.
I would scrap teaching religion in schools and teach tolerance instead. Your fear of aggressive secularization would be unfounded then.

@ Jarlath,

Well sorry to hear your not spiritual, but that’s your own decision and I respect that.

Well I think what you are saying is that non religious people have virtues. Or perhaps are capable of having virtues. Then yes I would most certainly agree with you. There are many non believers who are kind, considerate gentle people. Apologies if I ruffled your feathers. So you are proposing the teaching of these virtues, kindness, empathy etc in a non religious manner, ie. a class on tolerance.

But is religion not the promotion of these virtues, along with other things like love of God?

Do you really believe religion is about the power of the few over the many, the exploitation of fear? I’m a bit taken aback that you think that way. I understood religion to be about spreading good news, that there is life after death, that your path through life can be guided by God, that your life does have a purpose.

I think we are just going to have to differ on some issues, but I think I have a much better understanding of what you mean, thanks.

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