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Spain 40 years after Franco

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Forty years ago on November 23 1975, a granite slab weighing more than a ton and a half sealed off the embalmed body of the chief protagonist of nearly half a century of Spanish history. General Franco, “Caudillo by the grace of God”, as his coins proclaimed, Generalissimo of the armed forces, head of state and head of government (the latter until 1973), was buried at the colossal mausoleum built over the course of 18 years partly by political prisoners at the Valley of the Fallen, in the Guadarrama mountains near Madrid. The world’s largest memorial cross (a whopping 152 metres) towers over the sinister place.

Franco had died on November 20. On the opposite side of the altar is buried José Antonio Primo de Rivera, the founder of the Fascist-rooted Falange, which became the nucleus of Franco’s official party known as the National Movement. Primo de Rivera was executed by a Republican firing squad on November 20, 1936, a few months after the start of the terrible three-year civil war, giving that day an almost mystical significance for diehard Francoists.

Most Europe’s leaders snubbed Franco in death as they snubbed him in life and did not attend the funeral.

During the two days preceding Franco’s burial, around 300,000 people filed by the casket at the Oriente Palace to pay their last respects. Some Spaniards, particularly his opponents, joked that they queued in the freezing temperatures to make sure the dictator really had died.

The 37-year-old King Juan Carlos, appointed Franco’s successor in 1969 when he decided to re-instate the Bourbon dynasty was not very enthusiastically received when he delivered his inaugural speech to the Spanish parliament.  Juan Carlos’s grandfather, Alfonso XIII, had gone into exile in 1931 before the proclamation of the Republic that was followed by the civil war and his father Don Juan was regarded as too liberal by Franco so the dictator skipped a generation.

I was a young foreign correspondent at the time, working for The Times in Madrid. The Spanish and international press coverage given to Franco’s death was massive. ABC and Arriba printed special editions, which I have kept over the years. They both recount in great detail Franco’s military exploits – he was Europe’s youngest general at the age of 33 reputedly since Napoleon.

No more long nights wondering whether this was the one that would hold out the prospect of a new dawn, or recounting the joke of why Spaniards had short index fingers – because they had spent years saying “this is the year that Franco will die.”  It had taken the dictator 35 days to die, with endless medical bulletins that ran out of adjectives to describe his deteriorating condition.

At the time of Franco’s death, Gibraltar’s border with Spain, had been closed for six years and it was to remain so for another seven until it was re-opened in December 1982. My wife and I suffered the effects of that closure; we got married here in 1974 and in order to do so had to travel from Madrid to Algeciras, ferry to Tangiers, ferry to Gibraltar and then back the same way.

Fortunately, Spain’s transition to democracy moved more quickly than the opening of the border, though in fits and starts, as most of the country fervently wanted change. According to a survey in 1975, 75% of respondents wanted press freedom, 71% religious freedom, and 58% trade union freedom.

The country was ripe for change. Laureano López Rodo, the chief architect of a series of development plans in the 1960s that began to move the economy away from autarky and toward liberalisation, had rather prophetically said at that time, “We shall start thinking about democracy when income per head of the population exceeds $1,000.” Per capita income crossed the $500 line in 1963 and $1,000 in 1971, four years before Franco died.

King Juan Carlos was the engine that drove the reforms. At that time, we should remember, he was known as Juan Carlos el Breve and Juan Carlos el Tonto by those on the radical left. One of the great mysteries of the transition is whether Franco knew what would happen after he died. Afterall, Juan Carlos, born in Rome, had been sent to Spain in 1948 at the age of 10 by his exiled father Don Juan to be rigorously educated under the watchful eye of Franco. He was a sad-looking child, separated for long periods from his parents and drawn into the cold bosom of Franco, who never had a son. Furthermore, his younger brother, Alfonso, had died in 1956 at the age of 14, while the two of them were playing with a loaded gun, apparently a present given to Juan Carlos by Franco.

When Juan Carlos was appointed Franco’s heir he had to swear allegiance to the regime’s principles. When I spoke at length with the king in 1977 and asked him what Franco had told him about his role after the dictator died Juan Carlos said Franco had told him, “When you are head of state you will be able to do some of the things which I have been unable to do”, and did not elaborate further. It was the only remark Franco apparently made about his conception of the king’s role. Franco had famously left his regime and its institutions “tied up, and well tied up”, and it fell to Juan Carlos to unravel the knots. He was much astuter than he was given credit for, and today, after his wise abdication last year in favour of his son Felipe, he is becoming an unjustifiably forgotten figure. The king himself appreciated a joke told against him when I spoke to him. “Why was Juan Carlos crowned in a submarine? Because deep down he is not so stupid.”

Few dispute the success of the transition. Even though Gibraltarians were physically cut off from Spain while it happened – by 1982 when the border was re-opened the political transition can be said to have been over as the 1978 democratic constitution was four years old – I am sure they observed it keenly.

I am not going to recount the transition to democracy blow by blow. Suffice to say Spaniards approved a democratic constitution in 1978, joined the European Union in 1986, and became a founder member of the euro zone in 1999. Rather I will spell out some of the changes over the last 40 years, not all of them positive, and tell you where Spain is today. Here are some of the most dramatic changes, and I cannot avoid bombarding you with some numbers.

  1. Economic output increased almost tenfold between 1975 and 2015 to around $1 trillion.
  2. Per capita income rose from $3,000 to more than $30,000.
  3. The structure of the economy is very different: Agriculture’s share of output dropped from 9% to 2.5%; industry including construction from 39% to 23% and services increased from 52% to 74%.
  4. Employment by sectors has changed even more: only 4% of jobs today are in agriculture compared to 22% in 1975, 14% of employment is in industry and construction, down from 38%, while services employ 76%.
  5. Exports of goods and services more than tripled to 32% of GDP.
  6. The inward stock of foreign direct investment in Spain surged from $5.1 billion in 1980 (the earliest recorded figure) to $722 billion in 2014.
  7. The outward stock of direct investment jumped from $1.9 billion to $674 billion, with the creation of well known multinationals.
  8. The number of tourists rose from 27 million to an estimated 68 million this year.
  9. There were 123 cars per 1,000 people in 1975 and more than 500 today.
  10. The population rose by 10.4 million to 46.4 million, mostly over a 10-year period as a result of an unprecedented influx of immigrants. In the decade before the 2008-13 crisis Spain received more immigrants proportional to its population than any other EU country.
  11. Average life expectancy for men and women was 73.3 years in 1975; today it is 82 years. Spanish women live 85 years, almost the longest in the world.
  12. Close to 30% of the population was under the age of 15 in 1975; today it is 15%. Those over the age of 65 rose from 10% to more than 18%.
  13. The average number of children per woman has more than halved to 1.3, one of the world’s lowest fertility rates.

These changes give you a good idea of the profound transformation in Spain in the last 40 years, which in the history of time is a drop in the ocean. Spain telescoped its changes into a much shorter period than probably any other European country.

Spain also became one of the world’s most socially progressive countries, a far cry from the rigid and asphyxiating morality of the Franco regime and the strictures of the powerful Catholic Church. In 2005, Spain legalised marriage between same-sex couples. Only three other countries at that time had taken this step – Holland, Belgium and Canada. Fast-track divorces were also introduced that year under which couples no longer had to be separated for a year prior to legal proceedings and there was no requirement to attribute responsibility for the failure of the marriage. Divorce was not legalised until 1981; before then a marriage could be dissolved only through the arduous procedure of annulment, which was available only after a lengthy series of administrative steps and was thus accessible only to the relatively wealthy.

In a country whose exaggerated respect for masculine values added the word ‘machismo’ to the English language, women’s position in society has advanced considerably. During the Franco regime a married woman, for example, could not apply for a passport or sign a contract without her husband’s permission.

Women today account for 46% of the working population, up from 30% in 1975. Female university students outnumber male graduates and hold 40% of the seats in parliament. Society is also increasingly secular and less influenced by the Catholic Church, a pillar of the Franco regime until its last years.

In the Basque Country, the terrorist group ETA, which has murdered 857 people in its fight for an independent state (95% of them since 1975), has been defeated by the rule of law. The group declared a ‘definitive’ ceasefire four years ago, although it has yet to lay down its arms.

Most of the points I have just listed are positive. The most obviously negative one is the whopping unemployment rate of more than 20%, as a result of the economy’s crash as of 2008. The economy was going so well in the decade before then that José Luis Rodríguez Zapatero, the Socialist prime minister between 2004 and 2011, adopted a football metaphor and proclaimed in September 2007 that Spain ‘has joined the Champions League.’ That same year he also called Spain’s economic model ‘an international model of solvency and efficiency.’ He lived to regret these words.

The truth is that Spain’s boom was a false bonanza. The long period of what Spaniards called las vacas gordas (fat cows) was mainly fuelled by the labour-intensive and debt-fuelled construction and property sectors. The booming economy encouraged people to go on a spending spree and live beyond their means. Credit was cheap, thanks to Spain belonging to the euro zone. At one stage interest rates were even negative as Spain’s inflation was higher than the cost of borrowing.

The number of housing starts in 2006 was 865,000  – more than Germany, France and the UK combined. Such frenetic building was only made possible by the influx of immigrants (3.6 million between 2000 and 2007) and created a lopsided economy. The housing stock increased by 5.7 million during the boom, the equivalent of almost 30% of the existing stock. The impact on employment was dramatic: between 1995 and 2007, eight million jobs were created. The number of jobholders, which stood at 12 million in 1995 (roughly the same size as two decades earlier), increased to 20.5 million 2007. Today, it is 18 million.

The construction frenzy was not only confined to the building of too many houses, half a million of which new ones are still unsold today and more than a million including second hand properties.

Too many ghost airports were also built. Take the airports at Castellón and Ciudad Real. The former was opened by Carlos Fabra, the longstanding Popular Party head of the Castellón provincial government, even though it did not have all the permits to operate. Amazing as it may sound, Fabra justified the opening on the grounds that ‘anyone who wants to can visit the runway, the terminal and the control tower and walk around them, something they could not do if aircraft were taking off.’ There is a 24-metre sculpture of Fabra outside the airport. I am glad to say Fabra is in prison, though for other reasons. In September, Ryanair began to operate the first scheduled flights from Castellón in four years.

The €1 billion airport at Ciudad Real (previously known as Don Quixote airport after the deluded protagonist of Cervantes’ novel) was meant to be an alternative to Madrid’s airport – it has a 4km runway capable of taking an Airbus A380m, the world’s largest passenger jet. It was opened in 2008 by the region’s then Socialist government. It went bankrupt in 2010 and was closed in 2012. Efforts to sell the airport have so far failed.

Public funds were also wasted on building pharaonic projects. The Popular Party Madrid regional government embarked in 2008 on the so-called City of Justice comprising 12 circular buildings near the airport. The judicial complex covering all parts of the justice system, the biggest of its kind in the world, was due to be completed in 2014. Only one building was finished, the Madrid Forensic Anatomical Institute, and that is lying idle and has to be cleared periodically of rabbits

Not for nothing did the word fiesta originate in Spain, and it began to end when global credit crunch erupted in August 2007. Spain’s economic model was particularly vulnerable.

When the massive property bubble burst, house prices plummeted (by more than 35% between 2008 and 2014), some savings banks teetered on the brink of collapse (they were bailed out by a €41 billion euro zone programme, successfully exited in January 2014), many property developers went to the wall – unfinished properties along the Costa del Sol still bear witness to this – and the unemployment rate tripled to a peak of 27%.

Jobs were shed almost as quickly as they had been created during the boom. Due to much lower firing costs, the first people to lose their job were those on temporary contracts, particularly men, in the construction sector, many of whom had left school at 16.

Nowhere was this more rife than in Villacañas which became the door-making capital of Spain. At the height of the boom, this town of 10,000 inhabitants had 10 door manufacturing plants employing 6,000 people and producing 11 million doors a year, 60% of the national total. Hardly anyone stayed on at school.

The early school-leaving rate peaked at 31% in 2009, more than double the European Union average. It was down to 22% last year, still very high, as students had no option but to continue their education. These unqualified workers face a bleak future. They form a “lost generation.” It would make eminent sense to raise the school-leaving age in Spain from 16 to 18.

Political factors were also very much at the root of Spain’s crisis, particularly the degeneration of key institutions (the judiciary, parliament, regulatory bodies, the Court of Auditors, etc.) that were colonised (along with the savings banks) by the two largest parties, the Popular Party and the Socialists. The savings banks were also appropriated and by the nationalist parties in their home regions, as well as trade unions. These institutions failed to fulfil their accountability role, were discredited and lost legitimacy. The political class became an extractive elite. An effective system of checks and balances would have gone a long way toward reducing the scale of crony capitalism and hence the crisis.

Those of you who read the Spanish press could be forgiven for believing that corruption in Spain has reached African proportions. In fact, it has not sunk to the level of Italy, which is ranked 69th out of 175 countries in the latest corruption perception index ranking by the Berlin-based Transparency International, the only international measure we have, while Spain was in 37th position. Spain’s score in this index was 60 out of 100 compared to Italy’s 43 – the nearer to 100, the cleaner the country.

So Spain still has a long way to fall.

When I speak of corruption in Spain, I do not mean that the civil service does not function for you unless you grease palms. Most of the corruption was construction sector –related, especially at the level of municipal and regional governments and in the sphere of re-zoning of land and building permits. More than 800 town halls (10% of the total) today are under investigation and several thousand people have been accused in corruption cases.

At one point Spain accounted for one-quarter of the total number of 500 euro notes in circulation in the euro zone countries, although the Spanish economy only represents around 11% of the total euro zone economy. Ordinary Spaniards referred to these notes, used in black economy transactions, as “bin Ladens” (in reference to Osama bin Laden), because everyone knew they existed and what they looked like but few had seen them or admitted to doing so.

The corruption problem – and all the cases now in the limelight refer to misdeeds that happened during the boom period - was facilitated by Spain’s justice system which moves at a snail’s pace. Not only does it move slowly, partly because it is underfunded and poorly resourced, but the system’s governing body is politicized. The justice system is one area that missed out during the transition period.

I mentioned Carlos Fabra, the airport man, earlier on: it took a staggering 10 years for his case to come to trial. The backlog of all cases was highlighted last year by photos in the Spanish press showing files piled up in the toilets of courts.

The most high profile cases are those of Luis Bárcenas, the former treasurer of the ruling Popular Party, the sister and brother-in-law of King Felipe, Rodrigo Rato, the former head of the International Monetary Fund and the family of Jordi Pujol, president of Catalonia for 23 years. Barcenas is accused of paying secret cash payments to the party’s leaders over 18 years, including allegedly to Prime Minister Mariano Rajoy, and receiving donations to the party from companies, mainly construction ones, in return for favours.

The Infanta Cristina has been indicted as part of a four-year probe into her husband, Inaki Urdangarín, who faces charges of money-laundering and fraud. Urdangarín is accused of embezzling about €6 million in public contracts through a non-profit foundation he set up. If convicted she could face up to four years in prison and Urdangarín up to 19 years.

Rato, a former economy minister and chairman of Bankia, the bank whose collapse sparked the EU’s bail out, is accused, among other things, of tax fraud.

The Pujol family is embroiled in multiple cases of corruption, hiding money, tax evasion, etc

As for enchufismo and nepotism (the negative side of the otherwise admirable importance given to the family, and which has been the country’s saviour), the head of the Tribunal de Cuentas, the Court of Auditors, had to explain himself to a parliamentary committee after it was discovered that around 100 of the 700 employees were related to the Tribunal’s current and former senior management and to its trade union representatives. In another case, the Popular Party’s cacique in Orense, José Luis Baltar, was disqualified from public office for nine years after he personally appointed 104 people to the Diputación Provincial which he headed for 25 years and which is now run by his son. If Spain were a meritocracy, the chairman of Madrid’s failed bid to host the Olympic Games in 2020, a post where speaking English is vital, would not have got the job. He responded to a question in English by the International Olympic Committee at the crucial meeting to decide the winning country with the words, “No listen the ask”, a peculiar way of saying he did not hear or understand the question put to him.

Spain is now out of a long recession and is growing at one of the fastest rates in the EU, but from a low base as it has yet to recover the pre-crisis level of economic output. At the height of the false bonanza period the jobless rate was 8% - a level that is regarded as a disaster by the UK and the US, for example, not to speak of Gibraltar. Incidentally, Spain enacted 52 labour market reforms between the 1980 Statute of Workers’ Rights, which laid the foundations of post-Franco labour relations, and the end of 2015, a world record, and the jobs market is still dysfunctional.  I will not bore you with the technical details. Suffice to say that an economic model excessively based on bricks and mortar and tourism does not generate jobs on a sustained basis, there is still a gulf between insiders (those on permanent contracts) and outsiders (those on temporary contracts) and a more knowledge-based economy is something of a pipedream with an education system that has many problems.

In the German government’s eyes, Spain is something of a poster boy for the benefits of its orthodox austerity measures, which it certainly is when compared to basket case countries like Greece. Pensions have been cut, social expenditure reduced, public sector wages frozen and income taxes and VAT increased.

Not surprisingly, massive unemployment, austerity and corruption have changed the mould of politics. Like Britain, the political landscape is changing, though in one important aspect it is different: Spain does not have a UKIP style party – which is quite remarkable given the influx of immigrants who have been successfully absorbed. When I came to Spain in 1975 I was one of 165,000 foreigners; today I am one of around 5 million, and that number excludes naturalised Spaniards, 1.2 million of whom are Latin Americans.

Two new upstart parties at the national level, the centre right Ciudadanos (which means Citizens) and the anti-austerity leftist Podemos (which translates as We Can) are challenging the conservative Popular Party and the Socialists, the two parties that have alternated in power since 1982. For the first time since then, the general election in Spain this December 20 will be a four horse race, and opinion polls show none of them will win an absolute majority. Spain is one of the very few countries in the European Union not to have had a coalition government in the last 40 years. The last thing Spain needs is a gridlocked parliament.

Podemos was born out of the month-long occupation in May, 2011 by thousands of mainly young people of the Puerta del Sol square in the heart of Madrid. This grassroots movement, articulated through mobile phones and the Internet, quickly gathered supporters around Spain and, incidentally, inspired the Occupy Wall Street movement. Supporters ranged from anti-capitalists, workers who had lost their jobs, and pensioners hit by cuts to their payments, to homeowners whose properties had been repossessed because they could not pay their mortgages and university students who saw no future.

The most memorable slogan to come out of this movement was the one shouted in front of Congress when protestors waved loaves of bread above their heads and screamed: “There isn’t enough bread for so many chorizos!”  A chorizo is a swindler or cheat and not just a spicy sausage, often sliced and served in a bocadillo.

Podemos, which became a political party in January 2014, stunned the status quo by winning 1.2 million votes (8% of the total) and five seats in the European elections. For the first time since the re-establishment of Spain’s democracy, the Popular Party and the Socialists captured between them less than 50% of the total votes in an election. In the municipal elections last May Podemos and its allies took control of the Madrid and Barcelona town halls. The Popular Party suffered its worst result in 20 years.

Podemos’ founders come from the faculty of political sciences at Madrid’s Complutense University, well known for its long-standing commitment to far-left ideology. Pablo Iglesias, the party’s leader, was a member of the Communist Youth Union of Spain, part of the anti-globalisation movement and an advisor to the late Hugo Chávez, Venezuela’s autocratic and economically populist president, from whom his movement received money.  The 36-year-old pony-tailed Iglesias still lives in a modest flat in Vallecas, one of Madrid’s poorest areas, on a graffiti-daubed 1980s estate of apartment blocks. “Defend your happiness, organize your rage,” reads one graffiti slogan.

Iglesias broke with protocol when he met King Felipe and gave him the DVD of the first series of Game of Thrones. Iglesias said he chose this particular series because it depicted an “old world falling apart. The conflicting interests of the various families have plunged the kingdoms into misery, violence and sadness. In this panorama, new leaders, new armies, appear from beyond the established frontiers to make their challenge with new options, new ways of relating to a people tired of so many wars.” It was not a very subtle message.

Podemos was riding high in the voter intention polls until January of this year when its share of the votes peaked at 24%, ahead of the Socialists, and this month it was down to almost 11%.

Podemos can’t make up its mind what it wants to be. The party is trying to be all things to all men. Elections today tend to be won by the party that convinces the largest share of the electorate that it occupies the centre ground. Podemos is engaging in transversal politics –seeking ways to cross and possibly redraw borders that mark politicised differences.

In an unconvincing U-turn, it now pitches itself as a Nordic style social democrat party.

Ciudadanos, on the other hand, is on a roll. Its support has risen from 3% in January to almost 15% this month. It will probably be the kingmaker, getting into bed with either the PP or the Socialists in a coalition government, depending on which one gets the most votes. The PP, with 29% of votes in this month’s poll compared to the Socialists’ 25%, is betting on voters returning it to office because of the turnaround in the economy – the number of unemployed has dropped below 5 million for the first time since 2011. It will play the fear card.

The market-friendly Ciudadanos, led by the 35-year-old Albert Rivera, started life in Catalonia eight years ago and won three seats in the 2006 regional (nine in the snap 2012 election). Few outside of Catalonia had heard of the party. It began to be better known after campaigning for a ‘no’ vote in the non-binding referendum on independence held a year ago in defiance of a ban by the Constitutional Court. Ciudadanos opposed the independence movement. In last September’s Catalan election, pitched by the Catalan government as a de facto referendum on independence, Ciudadanos won 18% of the vote, double the share of Podemos and making it the second largest party in the region, ahead of both the Popular Party and the Socialists.

Rivera says the difference between his party and Podemos is that whereas Ciudadanos wants justice, Podemos wants revenge. Its short-lived rise was something of a paradox. Spain’s ideological self-placement scale has changed little over the last 20 years, rarely dropping below 4.5 where 5.0 is the center (0 is extreme left and 10 extreme right).

Spaniards do not want a rupture with the recent past, with what a Podemos ideologue calls the “regime of 1978” in reference to the democratic constitution of that year – which despite its defects engineered the best phase of Spain’s history in terms of prosperity and peaceful co-existence. What Spaniards want is for the system to work fairly, without privileges and impunity for the political class.

The monarchy has served Spain well. Yes, it has been tarnished by the corruption scandal in the family and by King Juan Carlos’s elephant-killing trip to Botswana, and so is under scrutiny. But the institution – and I would go as far as to say the country as whole – is demonstrating a capacity to regenerate itself.  King Felipe’s sister Cristina and her husband will go on trial next January.

The least of Spain’s problems is whether to revert to a Republic, or keep the monarchy. The Socialist Felipe González or the conservative José María Aznar, former prime ministers, would, as presidents, not be above the political fray in very partisan Spain as much as a Juan Carlos was or his son Felipe VI is proving to be. Felipe has not put a foot wrong in his first year on the throne and enjoys high approval ratings – far higher than those of any other public figure.

The most heated problem facing Spain is the issue of Catalan independence. The parties in favour of independence, an unholy alliance of conservative nationalists, radical republicans and anti-capitalists, won 48% of the vote in September’s election and 53% of the seats in the regional parliament. Hardly a clear mandate to declare a separate state.

Franco would have solved the problem, not that it could have risen in his very centralized dictatorship, by sending in the tanks. The central government is using some of the democratic weapons it has at its disposal to rein in the independence movement, such as summoning Artur Mas, the president of Catalonia, to testify in court. This seems to be turning him into a martyr.

Nothing will be done institutionally to try to satisfy the pro-independence camp until after the December election, and tinkering around with the constitution to give Catalonia more powers is not going to calm the independence hot heads.

Franco famously said that he had left his regime and its institutions ‘tied up, and well tied up.’ The knots were unravelled successfully and peacefully. One, however, has proven to be very difficult and sensitive, and that is how to openly confront Spain’s recent past, unlike, most notably and admirably, Germany. Perhaps the wounds caused by a civil war, and with the victors rubbing their triumph into the noses of the losers during the Franco regime, are the most difficult to heal and so, this argument goes, better left as they are.

There is no doubt that the so-called pact of forgetting, an unspoken agreement between left and right after Franco died to look to the future and not rake over the past, facilitated the transition to democracy.

There is still no consensus on what to do with the contentious Valley of the Fallen, which in no way can be called a site of reconciliation. It is true that the mass tombs hold the dead of both sides, around 40,000. But the Republican dead were brought there without consulting their families, and in some cases against the express wishes of relatives.  Why would a Republican want to be buried in a tomb so laden with Francoist and fascist imagery?

The previous Socialist government, which passed a controversial Historical Memory Law, appointed a commission of experts in 2011 to draw up proposals for the site including removing Franco’s grave from the basilica and burying him elsewhere. The PP won the election later that year and shelved the document, on the grounds that any change needed a consensus, something which remains as elusive as ever.

The failure to agree on how to confront the past makes it difficult to find an accord over the uncertain future.

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