socio economic analysis of rural-urban disparity in bangladesh by nourin shabnam examination...
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Socio Economic Analysis of Rural-Urban Disparity in Socio Economic Analysis of Rural-Urban Disparity in BangladeshBangladesh
byNourin Shabnam
Examination Committee: Prof. Jayant Kumar Routray (Chairperson)
Dr. Mokbul Morshed Ahmad (Member)
Prof. A. T. M. Nurul Amin (Member)
Asian Institute of TechnologySchool of Environment, Resources and Development
ThailandMay 2008
The development of urban areas has been at the expenses of rural areas- Michael Lipton, 1977. The issue is still active, not yet resolved.
Rural-urban disparity is one of the central problems around the world. The greatest challenge that lies ahead for rural-urban disparity is related to the underdevelopment of the national economy.
Although urban economy is the hub of the national economy and, as the global society expands, a nation’s welfare is determined increasingly by the roles its urban areas play in the global economy, it is not possible to do the economic development with carrying on the imbalanced development between rural and urban areas within a country.
Rural-urban disparities are persisting in Bangladesh in terms of rural (agricultural) and urban (nonagricultural) share of GDP, income, expenditure, savings, investment, poverty, literacy rate, housing structure, availability of electricity, water and sanitation facility, health facility etc. over the time periods.
The degree of rural-urban disparity in Bangladesh is widening over the periods in most of the cases such as the gap in terms of rural (agricultural) and urban (nonagricultural) share of GDP was 6.58% in 1981 followed by 29.14% in 1991 and 48.96% in 2001. 2
Background of the Study
3
Research Objectives
Specific Objectives
To study the pattern and trend of rural-urban disparities at the regional (divisional) level
To investigate rural-urban disparity at the local level
To identify the factors contributing to rural-urban disparities
To analyze related policies and programs, and their related outcomes
To recommend a development policy framework for lessening rural-urban disparity.
Broad Objective
To analyze the pattern, trend and factors contributing to rural-urban disparity in Bangladesh with some confirmatory statistical tests.
4
Scope and Limitations
Scope
Analysis of rural-urban disparity with respect to three time periods at the regional (divisional) level
Analysis of rural-urban disparity at the local level
Analysis of factors contributing to rural-urban disparity
Evaluation of policies and programs based on secondary data sources and rural-urban HHs’ perceptions.
Limitations
District level analysis could not be done due to the non availability of data.
Data and Materials Used
Both primary and secondary sources of data have been used.
Analytical Tools
Qualitative analysis
Qualitative statement to analyze the status of rural and urban areas, factors enhancing rural-urban disparity, different policies and programs etc.
Quantitative analysis
Descriptive statistics to analyze the basic features of data Analytical/inferential statistics
Fixed effect model of panel/pool data regression analysis (with respect to time and space)
Coefficient of determination and F-statistic Multiple regression analysis Chi-square test and t-test 5
Research Methodology (contd.)
Analytical Tools
Economic dependency ratio Correlation coefficient
6
Research Methodology
Ranking of priority
1st 2nd 3rd 4th No priority
0.75-1 0.5-0.75 0.25-0.50 0.1-0.25 0
Scale
1= strongly dissatisfied/same as before
2= dissatisfied/ slightly improved
3= moderately satisfied/moderately improved
4= Satisfied/substantially improved
5= strongly satisfied /highly improved
1-2 2-3 3-4 4-5
Priority index
Priority index value varies between 0-1.
Assigned value for the 1st ranking/priority of factor is 1, followed by 0.75 for the 2nd,0.50 for the 3rd, 0.25 for the 4th, and 0 for the no priority.
Index of satisfaction/ WMI (Weighted Mean Index)
5-point scale has been used.
)10( PI
<1
7
Rural-Urban Disparity at the Regional Level (contd.)
Indicators UsedSelected Indicators Based on Secondary Data Sources
Economic indicators Social indicators
1. Agricultural and non agricultural share of GDP (%)
1. Education
Literacy rate (%)
2. Households’ average monthly income (in taka)
2. PovertyPopulation below poverty line (%)
3. Households’ average monthly expenditure (in taka)
3. Water and sanitation
Proportion of households with access to safe drinking water source (%)Proportion of households with access to sanitary toilet facility (%)
4. Households’ average monthly savings (in taka)
4. Health and nutrition
Child nutrition status (%)Infant mortality rate (per 1000 live births)Maternal mortality rate (per 1000 live births)
5. Dependency ratio (%) 5. Housing infrastructure
Households’ access to pacca and semi pacca housing structure (%)Households’ access to electricity (%)
6. Per capita investment (in taka)
Time series data (1981,1991, and 2001)
Divisional level (6 divisions)
Rural-Urban Population
Total population in Bangladesh is 153.3 million Urban and rural proportions are 25% and 75% respectively The intercensal annual growth rate of urbanization is 3.15% Urbanization trend in Bangladesh is upward sloping
Source: Bangladesh Population Census, 1981, 1991 and 2001
8
Rural-Urban Disparity at the Regional Level (contd.)
0
20
40
60
80
100
1981 1991 2001
Urban Rural
% R
ate
of
Ru
ral
an
d U
rba
n P
op
ula
tio
n
Year
Rural-Urban Disparity at the Regional Level (contd.)
Level of Urbanization by RegionsLevel of Urbanization by Regions
0
5
10
15
20
25
30
35
40
45
Barisal Chittagong Dhaka Khulna Rajshahi Shylhet
Years
Level
of
urb
an
izati
on
(%
)
1981 1991 2001
9
Patterns of the level of urbanization among the regions is always same.Patterns of the level of urbanization among the regions is always same.
Level of urbanization is always more in Dhaka division followed by Level of urbanization is always more in Dhaka division followed by Chittagong, and Khulna.Chittagong, and Khulna.
Level of urbanization is the lowest in Sylhet.Level of urbanization is the lowest in Sylhet.
Divisions with Highest Rural-Urban Gap in Terms of Economic Indicators
10
Rural-Urban Disparity at the Regional Level (contd.)
Indicators Highest rural-urban gap
1981 1991 2001
Agricultural non-agricultural share of GDP (%)
Dhaka(16.74)
Dhaka(42.82)
Dhaka(72.34)
Rural-urban HHaverage monthly income (in Tk.)
Dhaka(1,242)
Dhaka(1670)
Dhaka(2110)
Rural-urban HHaverage monthly expend. (in Tk.)
Dhaka(1055)
Dhaka(1241)
Dhaka(1970)
Rural-urban HH average monthly savings (in Tk.)
Dhaka(187)
Chittagong(559)
Barisal(435)
Dependency ratio (%) Sylhet(1:2.64)
Barisal(1:1.47)
Barisal(1:1.43)
Per capita investment (in Tk.)
Dhaka(0.713566)
Dhaka(0.833392)
Dhaka(1.031657
)
Rural-urban gap is always more in the highly urbanized region in most of the cases
The gap is widening over the time periods in terms of most of the economic indicators
Divisions with Highest Rural-Urban Gap in Terms ofSocial Indicators
11
Rural-Urban disparity at the Regional Level (contd.)
Indicators and sub indicators Highest rural-urban gap
1981 1991 2001
Literacy rate (%) Dhaka(5.89)
Dhaka(7.79)
Dhaka(12.92)
Population below poverty line (%)
Dhaka(13.25)
Dhaka(10.09)
Dhaka(8.55)
Number of safe drinking water user HHs (%)
Sylhet(23.84)
Rajshahi(14.85)
Khulna(18.56)
Number of sanitary toilet user HHs (%)
Dhaka(19.62)
Dhaka(34.49)
Dhaka(52.33)
Child nutrition status in terms of underweight (%)
Khulna(6)
Dhaka(5)
Sylhet(5)
IMR (per 1000 live births) Dhaka(17)
Dhaka(15)
Dhaka(15)
MMR (per 1000 live births) Khulna(3.17)
Chittagong(3.38)
Sylhet(4.73)
HHs having access to pacca and semi pacca housing structure (%)
Dhaka(27.28)
Dhaka(31.17)
Dhaka(30.57)
HHs having access to electricity (%)
Dhaka(35.25)
Dhaka(52)
Dhaka(54.56)
Rural-urban gap is always more in the highly urbanized region in most of the cases
The gap is widening with respect to time in terms of all social indicators except poverty
Rural-Urban Disparity at the Regional Level (contd.)
Urbanization and R-U GDP Gap
Fixed effect model of panel regression analysis for the relationship between rural-urban GDP gap and urbanization with respect to 3 time periods and 6 regions (divisions), where urbanization in 6 divisions is dependent variable and rural-urban gap in the corresponding region is the dependent variable
H 1: Urbanization tends to determine rural-urban GDP gap
So, the higher is the urbanization, the greater is the rural-urban GDP gap over the periods.
Divisions 1981 1991 2001
Urbanization (%)
R-U GDP gap(%)
Urbanization (%)
R-U GDP gap (%)
Urbanization (%)
R-U GDP gap (%)
Barisal 5.39 8.28 4.45 9.04 14.2 28.02
Chittagong 22.12 12.46 21.19 36.38 23.7 54.48
Dhaka 39.77 16.74 42.85 42.82 34.30 72.34
Khulna 12.83 11.08 11.20 20.65 20.0 41.58
Rajshahi 16.24 10.06 16.92 11.7 14.9 38.56
Sylhet 3.64 6.12 3.36 9.9 12.4 23.36
RU_BA = 2.77040714 + 0.2329958998*U_BARU_CH = 12.5410184 + 0.2329958998*U_CHRU_DH = 23.2439602 + 0.2329958998*U_DHRU_KH = 5.76293649 + 0.2329958998*U_KHRU_RA = 7.65706126 + 0.2329958998*U_RARU_SY = 2.743373487+ 0.2329958998*U_SY
Division-Wise Urbanization and Rural-Urban GDP Gap, 1981, 1991 and 2001
= 0.705102 and F-statistic = 3.156380 The hypothesis is accepted at the 99% confident level.2R
Rural-urban Disparity at the Regional Level (contd.)
Urbanization and R-U HHs’ Average Monthly Income Gap
H 2: Urbanization tends to determine rural-urban HH average monthly income gap
So, the higher is the urbanization, the greater is the rural-urban average monthly income gap over the periods.
RU_BA = 3.91220 + 0.2329958998*U_BARU_CH = 9.34301 + 0.2329958998*U_CHRU_DH = 11.2359 + 0.2329958998*U_DHRU_KH = 6.06184 + 0.2329958998*U_KHRU_RA = 4.16206 + 0.2329958998*U_RARU_SY = 2.34127 + 0.2329958998*U_SY
Division-Wise Urbanization and Rural-Urban HHs Average Monthly Income Gap, 1981, 1991 and 2001
= 0.676391 and F-statistic = 4.312021
Divisions 1981 1991 2001
Urbanization (%)
R-U income gap (%.)
Urbanization (%)
R-U income gap (%.)
Urbanization (%)
R-U income gap (%.)
Barisal 5.39 10.54 4.45 12.28 14.2 13.3
Chittagong 22.12 16.74 21.19 20.0 23.7 21.3
Dhaka 39.77 19.0 42.85 22.92 34.30 22.52
Khulna 12.83 16.68 11.20 17.56 20.0 18.52
Rajshahi 16.24 14.86 16.92 16.04 14.9 17.13
Sylhet 3.64 9.18 3.36 12.54 12.4 13.88
13
2R The hypothesis is accepted at the 99% confident level.
Rural-Urban Disparity at the Regional Level
Urbanization and R-U Gap in Terms of Other Indicators
14
The higher is the urbanization, the greater is the rural-urban disparity in terms of the most of the indicators over the periods
Significant at 99% confident level.
Hypotheses F-statistic
Overall assessment
H 3. Urbanization tends to determine rural-urban households’ monthly expenditure gap
0.691452 3.985 Accepted
H 4. Urbanization tends to determine rural-urban households’ monthly savings gap
0.45512 6.214 Rejected
H 5. Urbanization tends to determine rural-urban per capita investment gap
0.7325 3.739 Accepted
H 6. Urbanization tends to determine rural-urban literacy gap
0.728491 4.302 Accepted
H 7. Urbanization tends to determine rural-urban poverty gap
0.7129 3.2295 Accepted
H 8. Urbanization tends to determine rural-urban safe water user households’ gap
0.4320 7.0219 Rejected
H 9. Urbanization tends to determine rural-urban sanitary toilet usage gap
0.78340 3.02187 Accepted
H 10. Urbanization tends to determine rural-urban child nutrition status gap
0.34340 9.22041 Rejected
H 11. Urbanization tends to determine rural-urban infant mortality rate gap
0.70146 4.24579 Accepted
H 12. Urbanization tends to determine rural-urban maternal mortality gap
0.470115 6.29745 Rejected
H 13. Urbanization tends to determine rural-urban HHs by pacca and semi pacca housing structure gap
0.83461 3.21395 Accepted
H 14. Urbanization tends to determine rural-urban households’ access to electricity gap
0.80695 3.89732 Accepted
2R
Rural-Urban Disparity at the Local Level (contd.)
Location of Study Areas
Area
Shiromoni (rural)
Fulbariagate (urban)
Area (acres) 891 1860
HHs (No.) 337 992
Population (No.)MaleFemale
4,9792,5732,706
14,76279496813
Literacy rate (%) 37 51
Occupation (%)AgricultureNonagricultural
7129
6931
Study Areas at a Glance
16
Rural-Urban Disparity at the Local Level (contd.)
Indicators Used
Selected Indicators as a Basis for the Questionnaire Survey
17
Rural-Urban Disparity at the Local Level (contd.)
Rural-Urban Population by Age Group
Household size
Source: Field survey, October 2007.
0
10
20
30
40
50
60
% o
f ru
ral-
urb
an H
H
mem
ber
s
0-14 14-64 64+
Age group
Rrural
Urban
Age range
Rural households’ members
Urban households’ members
n % n %
0-14 193 55.14 101 40.4
14-64 117 33.43 130 52.0
64+ 40 11.43 19 7.6
Total 350 100 250 100
Number of economically unproductive members is more in rural households compared to urban households.
Rural-Urban Population by Age Group
Household type
Nuclear- R(18%); U (78%) Joint- R (82%); U (12%)
18
Rural-Urban Disparity at the Local Level (contd.)
Analysis of Rural-Urban Disparity by Household Members’ Education
Significant at 95% confident level.
Educational status
Teacher-student ratio
R: 1:92 U: 1:76
Educationrelatedindicators
Rural Urban t-value (urban vs. rural)
Significance
n % n %
Illiterate 183 52.29 106 42.4 2.789 P<0.000
Maleliteracy rate
96 49.74 82 58.99 11.755 P<0.054
Femaleliteracy rate
78 49.68 62 55.86 17.078 P<0.037
Can sign 57 16.29 32 12.8 3.555 P<1.301
Primary 71 20.29 59 23.6 2.137 P<0.024
Secondary 36 10.29 38 15.2 1.587 P<0.009
Above 3 0.86 15 6.0 3.332 P<0.000
Rural-Urban disparity is more in the secondary and above secondary level of education.
The No. of people who can sign only is more in rural area.
19
Rural-Urban Disparity at the Local Level (contd.)
Analysis of R-U Disparity by HH Income, Expenditure and Savings
HHs' income, expd. and savings
892.02 R
921.02 R
Rural Urban t-value (urban vs. rural)
Significance
Average household income
2,090 2,752 43.340 P<0.006
Average household expenditure
1920 2,471 29.294 P<0.013
Average household savings
170 281 3.671 P<0.071
54321 *545.0*503.0*512.0*521.0*662.0305.712 fffffY
1098765 *519.0*563.0*523.0*559.0*562.0*689.021.1001 ffffffY
HHs income by sources
Rural HH income is mostly determined by agricultural activities.
Urban HH income is determined by nonagricultural activities.
Rural
Urban
Significant at 95% confident level.
(Coefficient values are significant at 95% confident level)
(Coefficient values are significant at 95% confident level)
f1 = HH income from crops production; f2 = HH income from livestock raising; f3 = HH income from fisheries and poultry raising; f4 = HH income from vegetables production; f5 = HH income from rickshaw & van pulling; f6 = HH income from tailoring; f7= HH income from working in biscuit factory; f8 = HH income from working in jute mills; f9 = HH income from working as technician; f10= HH income from other sources
20
Rural-Urban Disparity at the Local Level (contd.)
Dependency Ratio of Rural and Urban Household Members
Dependency ratio
Area Income group
Total members
HH income earning members(%)
HHDependent members (%)
Dependencyratio
Rural Below 10001000-20002000-3000
1490
246
21.4318.8922.76
78.5781.1177.24
1:3.671:4.291:3.39
Urban 1000-20002000-30003000-4000
5015545
20.0022.5828.89
80.0077.4271.11
1:4.001:3.431:2.46
In both rural and urban areas, in the income range of Tk. 1000-2000, the dependency ratio is the maximum.
In rural area, it is 1:4.29 and in urban it is 1:4.00.
21
Rural-Urban Disparity at the Local Level (contd.)
Institutional skill training
Rural HHs have got more access to institutional skill training.
Organizations are more active in rural area than urban area in terms of functional literacy training and income generating training.
Significant at 95% confident level.
Types of skill training
Skilled people t-value (urban vs. rural)
Significance
Rural Urban
n % n %
Functional literacy training
23 17.55 8 10.0 6.001 P< 0.174
Income generating training
75 57.25 27 33.75 9.239 P<0.188
Community based skilled training
11 8.40 24 30.0 2.546 P<0.001
Other 22 16.79 21 26.25 2.336 P<0.072
Total 131 37 80 32 P<0.137
Analysis of R-U Disparity by HHs Access to Different Types of Institutional Skill Training
Water and sanitation
There is a significant disparity between rural and urban HHs.
Analysis of R-U Disparity by Safe Water and Sanitary Toilet Usage
Rural Urban t-value (urban
vs. rural)
Significance
n % n %
Safe water users
18 36 43 58 2.440 P<0.000
Sanitary toilet users
26 52 44 88 3.833 P<0.032
22
Rural-Urban Disparity at the Local Level (contd.)
Health status
Rural-Urban Disparity by Health Status
Indicators Related to Health Rural Urban t-value (urban vs. rural)
Significance
Average duration of ailment by patients (in months)
42 37 15.800 P<0.040
Patients’ access to govt. health centre (%)
10.44 25.55 2.382 P<0.007
Patients’ access to NGO health centre (%)
2.78 1.11 4.700 P<0.133
Patients’ access to private health centre (%)
8.35 11.89 1.412 P<0.000
Patients’ access to homeopathic doctor (%)
16.05 13.04 1.332 P<0.057
Patients’ access to pharmacy/dispensary (%)
39.45 42.59 2.931 P<0.003
Patients’ access to peer/fakir/kabiraj (%)
22.93 5.82 5.900 P<0.000
Average times required for reaching the treatment service (in minutes)
49 28 1.367 P<0.001
Coverage of vaccination/immunization doses by 0-5 years children (%)
67 89 7.845 P<0.000
In terms of all Indicators rural area issignificantly worse off than urban areaexcept ‘patients’ access to NGO health center ’.
Significant at 95% confident level.
23
Rural-Urban Disparity at the Local Level
Rural-Urban Disparity by Housing Structure and Electricity Connection Housing structure and
electricity connection
Most of the rural HHs are katcha in nature.
In terms of HHs access to pacca and semi pacca houses and electricity connection, there is a significant gap.
HH access to mobile
R: 46%
U: 62%
HHs’ access to telephone: No HH
Rural Urban t-value (urban vs. rural)
Significance
n % n %
Pacca house 10 20 19 38 3.052 P<0.000
Semi pacca house 19 38 23 46 2.114 P<0.003
Katcha house 21 42 8 16 3.459 P<0.113
Having electricity connection
34 68 50 100 2.124 P<0.001Significant at 95% confident level.
24
Factors Contributing to Rural-Urban Disparities in Bangladesh
25
Policy/Programs at the Regional Level
Key factors Policies and programs Remark
Skewed urbanization Decentralized urbanization policy through more investment in urban functions/services in rural areas and proper guidance to rural-urban migration for avoiding over concentration of population in one or few cities
Sectors of investment in rural areas has not been properly addressedThe way to guide the concentration of rural-urban migration in some specific cities has not been addressed
Policies/Programs at the Local Level
Key factors Policies and programs Remark
Problem in the marketing of farm produces
Road infrastructure development programRural Maintenance Program (RMP)Access to mobileAccess to land phone
DissatisfiedStoppedSatisfiedDissatisfied
Poor road infrastructure Local Government Special Project Dissatisfied
Absence of agro processing center Agro processing center development Dissatisfied
Seasonal unemployment Food Assisted Programs Moderately satisfied
Lack of skill labor Skill development program Dissatisfied
Lack of income and employment generation opportunity in the rural areas
Goat and gavi prodan kormoshusiMicro credit program
Moderately satisfiedSatisfied
Concentration of economic activities in the rural area
Agro processing center development Dissatisfied
Lack of educational facility in the rural areas
Education for all program/total literacy movementPrimary education stipend schemeFood for Education ProgramNon-formal education programAdult literacy program
All are doing well in the lower level of education, but not in upper level of education
Lack of health services Increasing Govt. health facilities NGOs performance
DissatisfiedSatisfied
Lack safe water and sanitation facilities BRAC’s Wash program, SHARD programArsenic testing strategies Installation of tube wellQuick institutional performance Increasing No. of pacca and semi-pacca toilet
SatisfiedSatisfiedDissatisfiedDissatisfiedModerately satisfied
Lack of electricity facility in the rural area
Rural electrification Dissatisfied
General Policies and Programs
Key factors Policies and programs Remark
Problem in the marketing of farm produces and lack of better road infrastructure
Infrastructure Development Policy - Rural roads, bridge, culverts and growth center development - Pally phone service
Not so activeSatisfactory
Absence of agro processing facilities
Agro processing center development strategy
Not satisfactory
Absence of betteremployment opportunity
Skill training programMicro credit program
Under considerationSatisfactory
Absence of better education opportunity
Education for all program/total literacy movementPrimary education stipend schemeFood for Education ProgramNon-formal education programAdult literacy program
All are doing well in the lower level of education, but not in upper level of education
Absence of health service
Govt. health servicesNGOs performance
DissatisfactorySatisfactory
Absence water and sanitation services
NGOs performance Satisfactory
Absence of electricity facility
Rural electrification Satisfactory
27
28
Conclusions and Recommendations
The level of urbanization is very much skewed in nature.
The degree of regional rural-urban disparity is widening.
Significant rural-urban disparity at the local level.
Skewed distribution of urban population is the key factor behind regional rural-urban disparity
The other factors contributing to regional rural-urban disparity are absence of secondary city, absence of agro processing facilities, urban bias investment policy, drain of skill manpower, problem in the marketing of agro produces etc.
Insufficient government and non governmental organizations’ supports in terms of better income employment opportunity and educational opportunity, health service, water and sanitation facilities, electricity facility is the 1st prioritized factor behind rural-urban disparity at the local level.
The other factors are problem in the marketing of farm produces, seasonal unemployment, lack of skill labor, lack of better income and employment opportunities in the rural area etc.
Conclusions (contd.)
29
Conclusions and Recommendations
Conclusions
Understanding the trend and pattern of rural-urban disparity at the regional level testing through the extent of rural-urban disparity at the local level
Identification the factors contributing to disparity
Identification of the region (division), which faces severe rural-urban disparities compared to others and which should be given the first priority for planning and development.
Contribute for the policy makers of government and non-governmental organizations, which are engaged in balanced development policies and programs by observing what they have already done, what are the outcomes of that, what are their gaps and what should be done right now towards reducing rural-urban disparities.
30
Conclusions and Recommendations
Recommendations for Reducing Rural-Urban Disparity at the Regional Level
Short Term Policies
Targeted Public Investment in Urban Services in Rural Area
Agro processing center development
Better health
Better education
Vocational training
Technical inputs for agricultural production
Road, electricity etc.
Long Term Policies
Decentralizing urbanization
Secondary city development
Promoting small-sized town
Increasing the No. of growth centers
31
Conclusions and Recommendations
Recommendations for Reducing Rural-Urban Disparity at the Local Level
Long Term Policies
Rural industrialization with focus on agro processing
Investment in rural infrastructural development
Short Term Policies
Strengthening skill development
Employment diversification
Rural non-farm activities
Agro processing facilities and related services
32
CHAPTER 8: Conclusions and Recommendations
General Recommendations for Reducing Rural-Urban Disparity
Long Term Policies
Infrastructure development
Agricultural marketing
Production of high value crops
Short Term Policies
Strengthening NGO service delivery activities in rural areas
Strengthening the linkages between agriculture and industry
Recommendations for Further Study
This research should be conducted at the district level by using more indicators depending on the availability of data and information and testing through more sample areas under different levels of urbanized regions .
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