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Fundamentals of Islamic Economic System

By Dr. Muhammad Sharif Chaudhry

CHAPTER 19

MISCELLANEOUS SUBJECTS

  1. Private Ownership

  2. Public Ownership

  3. Nationalisation

  4. Privatisation

  5. Family Planning

  6. Islamic Solution of all Human Economic Problems

I- Private Ownership

Islamic Concept: According to al-Qur’an, the Holy Book of Islam, ownership of heavens and the earth and of every thing, indeed over the whole of universe, belongs to Allah, the Almighty God. Man is caliph or God’s viceroy or vicegerent on earth and thus the man enjoys certain rights of usufruct in respect of certain things which have been created for the benefit of man. But the real owner of all these things is Allah whereas the man is holding these things as a trustee. Man uses these things for his own benefit as well as for the purpose which he has been assigned to fulfil. Thus Islamic concept of ownership is of unique nature. Over certain things, individual has been allowed to exercise his limited right of ownership, whereas over certain other things right of joint ownership of the community has been recognised. It would be of great academic interest if we reproduce here the views of some well-known scholars of Islam on the Islamic concept of ownership.

According to Muhammad Akram Khan : “Thus, subject to the sovereignty of Allah, man has been granted the right to own property. As man is not its ultimate owner, so the mode of its utilization has also been defined by the real owner (i.e. God Almighty). At the termination of this wordly life everyone shall have to account for the resources provided to him in this worldly life and placed at his disposal as vicegerent to Allah.”

According to Muslehuddin : “Private ownership of property is regarded as a spur to stimulate the best efforts of man which add enormously to the wealth of the community but to a socialist it is the main cause of irrational and unjust distribution of wealth. The Islamic concept of private ownership is of a unique nature. Ownership, in essence is that of God while some rights only, under specific conditions, vest is man so that he may fulfil the purpose of God, that is, the purpose of community by acting as a trustee for those in need.”

In the words of M.A. Mannan : “What Allah has created belongs collectively to the whole human society. Legal ownership by the individual, “that is to say, the right of possession, enjoyment and transfer of property is recognised and safeguarded in Islam, but all ownership is subject to the moral obligation that in all wealth all sections of society, and even animals have the right to share.”

Property Rights : Property rights include right to earn and acquire property, right to own, possess and enjoy property, and finally the right to alienate it through sale, gift, exchange, will or through other lawful means. Islam recognised all these rights to property and granted the same to its followers some fourteen hundred years ago. Property rights granted by Islam are briefly discussed as
under :-

Islam allows an individual to acquire property, movable or immovable, through lawful means. He can earn as much wealth as he can through his knowledge, skill experience and effort. The Qur’an says : “……… unto men a fortune from that which they have earned, and unto women a fortune from that which they have earned……..” (4 : 32). At another place, it says : “…….. And that man hath only that for which he maketh effort. And that his effort will be seen. And afterward he will be repaid for it with fullest payment…….” (53 : 39-41). Thus there is no restriction or limit on acquiring of property provided it is acquired through permitted, fair, moral and legal means.

Islam allows a person to own, possess and enjoy his wealth which has been acquired by him through lawful means. There are many verses of the Holy Qur’an and Ahadith of Muhammad (PBUH) which recognise the right of an individual to own property. The Qur’an says : “Spend your wealth for the cause of Allah……” (2:195). Again it says : “O ye who believe ! Spend of that wherewith We have provided you…….. “ (2:254). At another place it says : “O ye who believe ! spend of the good things which ye have earned…….” (2:267). Yet again it commands : “Take alms of their wealth, wherewith thou mayst purify them……” (9:103). Thus all the verses of the Qur’an and traditions of the Prophet (PBUH) which incite the believers to do acts of charity, pay Zakat and alms, and spend in the way of Allah, confirm by implication the right of an individual to own Property.

Islam permits the individual to alienate or dispose of his property by any means like sale, exchange, gift, bequeath, etc. Islamic law gives wide powers to the owner to alienate his property in any manner whatsoever he likes. Some restrictions imposed here and there are in the interest of family or in the interest of religion and the community.

Sanctity of Ownership Rights : The property rights mentioned above are sacrosanct and inviolable. No one, even the state, is permitted to take away or violate these rights. The Prophet (PBUH) of Islam in his famous farewell address at his last pilgrimage, declared : “O, people ! surely your blood, your property and your honour are as sacred and inviolable as the sacred inviolability of this day of yours, this month of yours and this very town of yours. Surely you will soon meet your Lord and you will be held answerable for your actions.” He continued: “….. their lives and their properties are sacred to us except when they violate the sanctity of the life and property of others, and Allah alone is the Judge of their intentions.”

Abu Huraira reported: A person came to the Messenger of Allah (May peace be upon him) and said: “Messenger of Allah (May peace be upon him), what do you think if a man comes to me in order to appropriate my possession?” He (the Holy Prophet) said : “Don’t surrender your possession to him.” He (the inquirer) said : “If he fights with me?” He (the Holy Prophet) remarked : “Then fight (with him)” He (the inquirer) again said: “What do you think if I am killed?” He (the Holy Prophet) observed : “You would be a martyr.” He (the inquirer) said : “Messenger of Allah, What do you think of him, if I kill him.” He (the Holy Prophet) said : “He would be in the Fire.”

(Bukhari, Muslim)

It is because of the sanctity of property rights that al-Qur’an, the revealed book of Islam, has prescribed a very severe punishment like that of cutting of hands for those who deprive others of their property by theft (5 : 38) or by robbery.

Responsibilities attached with Ownership : The rights attached with ownership have also their corresponding obligations. An owner of property beyond certain limit is obliged by Islam, as we have already discussed in detail, to pay Zakat. The poor and the destitute have an acknowledged right in his wealth. Besides payment of Zakat and alms, he is also expected to pay other dues and taxes. Moreover, property should be kept in use as non-use of property or hoarding of wealth is strictly prohibited. However, in putting wealth to his own use, one must be neither miser nor extravagant, rather be must be moderate. The use of property must not be injurious to others. Others should be allowed use of property gratis (Ariat). Surplus property or wealth, which is over and above of one’s needs, may preferrably be used for the welfare of the community. Wealth should not be spent on prohibited (unlawful or haram) things such as gambling, drinking, prostitution.

Upper Limit : Islam has not prescribed any maximum amount of property beyond which one individual or one family cannot own. In other words, there is no upper limit or ceiling in matter of private ownership of property. But the condition is that property should be acquired through lawful (‘halal’) means and obligations attached with ownership of property should be duly discharged such as payment of Zakat and other taxes, expenditure on lawful (‘halal’) things, payment of alms, etc. However, in exceptional circumstances or in the interest of equitable distribution or social justice, Islamic state can impose upper limit on landholdings or other forms of property.

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II- Public Ownership

The principle of public or joint ownership has been drawn by the Muslim jurists from the following Ahadith of the Prophet of Islam :

1.       Ibn Abbas reported that the Messenger of Allah said : All Muslims are partners in three things-in water, herbage and fire.

-(Abu Daud, Ibn Majah)

2.       Abu Hurairah reported that the Messenger of Allah said : Don’t withhold excess water so as to prevent therewith (the growth of) additional herbage.

-(Bukhari, Muslim)

3.       Ibn Abbas reported that Sa’ab-bin-Jassamah said : I heard the messenger of Allah say : There is no Hima (ground consisting of grass and water which pre-Islamic Arabs used to reserve for their own cattle and animals) except for Allah and His Prophet.

-(Bukhari)

4.       Abyaz-bin-Hammal Marbi reported that he came to the Messenger of Allah. He sought for the salt-pit of Ma’reb to be granted free to him. Whereupon he gave it to him. When he went away, a man enquired : O Messenger of Allah, you have given him a perennial spring-water (or a perpetual source of salt). So he withdrew it from him.

-(Tirmizi, Ibn Majah)

On the basis of above mentioned Ahadith, the jurists have held that water, grass, fire and salt are things of common use which must be kept under joint or common ownership of the community. Not only these things, but also many other things of common use or of public benefit, on the analogy of above mentioned Ahadith, have been held to belong to community instead of individuals.

This concept of common ownership also arises out of the fundamental Islamic principle that God is the real sovereign and owner of everything He has created, whereas man (collectively all human beings) has been given limited or beneficial ownership as trustee. Thus factually the right of limited ownership which has been bestowed by God belongs to community. However, there are certain things of common benefit on which community retains its control or ownership while many other things are passed on to individuals for their ownership and enjoyment with certain conditions and obligations. The former is called public ownership or collective ownership (these days it is also called state or government ownership) whereas the latter is called private ownership.

Air, light, water, grass and fire, being things of common use or ‘res nullius’ are considered public property. The jurists have laid down certain rules and regulations in this behalf. A person who kindles a fire in a desert cannot prevent others from using it. Wild grass grown on a person’s land which has no boundary wall or fence is for the common benefit and anybody can utilize it. But after having been cut and gathered, it becomes the property of the person who cuts and gathers it. Water of sea, river, stream or spring is common to all unless the place of water like well is privately owned or water is stored in a jar. Similarly places of worship, roads, canals and pastures are nobody’s private property and are for common use.

About the minerals, there is a conflict of opinion. No doubt some Hanafi jurists say that owner of surface of land is the owner of minerals beneath that land subject to one-fifth (as tax) to the state, but majority of the jurists hold that minerals are public or state property such as mines of gold, silver, iron, coal, salt, petroleum, kerosene oil, copper, etc.

Like minerals, all those things of common utility which are indispensable to the public, are kept in state control. The Imam or the head of state is not authorised to grant such things to any individual. We have already described in detail that when the rich lands of Iraq, Iran, Syria, Egypt and Palestine were conquered during the reign of caliph Umar, some of the great companions of the Prophet like Bilal and Zubair demanded that these lands should be distributed among the soldiers like spoils of war. But the caliph rejected their demand and decided to retain these lands in state control for the common good of all the people including the future generations.

The jurists have also laid down that private property can be brought under public ownership if the national interest so demands. However, this should be done in exceptional cases and that too after payment of fair compensation.

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III- Nationalisation

Nationalisation means bringing of private property under state or public ownership for benefit of the nation. The principle of nationalisation has been derived by the scholars and jurists of Islam mainly from the following verse of the Holy Qur’an :

“And make not over your property, which God has made a (means of) support for you, to the weak of understanding, but feed and clothe them from it and speak kindly unto them……” (4:5)

Commenting upon the above mentioned verse, Maulana Syed Abul’ Ala Maududi, a great scholar of Islam, justifies nationalisation as under :

“This Ayah bears wide meaning. It contains a comprehensive order for the Ummat that the means of production should not be allowed to remain in the hands of an un-enlightened class which by misusing those means will disrupt the social and economic order of society and erode the moral values. The right of ownership of property is not unrestrained. If the owner is wanting in ability to use his ownership right in the correct manner or so exercises this right as to create social strife, his ownership is liable to proscription.

Every man must be provided with basic needs of life, but a limit must be set on the free exercise of his right of ownership; so that the use of this right does not pose a danger to the moral, social and economic order of life. In accordance with this injunction at the individual level, every man of wealth must take care that the person to whom he is entrusting his wealth has the requisite capacity to use it wisely. On a higher plane, the Islamic State must take steps to nationalize the property of those who manage it inefficiently or unwisely and the wealth of those who expend it in evil ways. In this case the state must, however, provide subsistence to the owners.”

Afzal-ur-Rehman, an eminent Muslim economist has commented upon this verse and justified nationalisation as follows:

“Imam Shafee is of the opinion that when anyone goes beyond the point of moderation in his expenditure, even if he is spending on good and lawful things, his property should be taken away from him and given to the custody of the state (ward). And according to the principle of Ward, the state is within its rights to take over the property of any person who is recklessly destroying his property and thereby damaging the greater good of society. As he is wasting and not properly utilising his property which God has made a means of support for human beings, he is considered still “weak of understanding” who has not attained maturity of intellect.

This Injunction applies to orphans, “but the wording is perfectly general. The words of the Holy Quran “your property” seem to suggest that “ultimately all property belongs to the community, and is intended for the support of you, i.e., the community. It is held in trust by a particular individual. If he is incapable, he is put aside but gently and with kindness.”

Besides the above mentioned verse, there are many other verses in the Holy Qur’an which strictly forbid earning of wealth and property through unjust, unfair and unlawful (Haram) means. Such ill-gotten wealth and property can also be confiscated and placed under public ownership for common benefit of the nation. Even fairly earned property can be nationalised in public interest after payment of reasonable compensation. Property which is not being put to use by the owner for a certain specified period (three years in case of land) can also be taken out of private ownership and placed under public ownership. Big enterprises in the sectors of education, health, defence, industry, transport and communications, infrastructure, social services, etc. can be nationalised and run by the government if the owners are not properly managing them or such enterprises are of general public utility and keeping of them in private ownership is damaging to the public interest.

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IV- Privatisation

Privatisation means the process by which certain things or properties are taken out of public ownership and are placed under private ownership. Privatisation is counter or reverse process of nationalisation and hence it is also called denationalisation or deregulation.

Islam does not favour privatisation of those public properties and means of production which are of common utility and keeping of which in private hands is harmful to the interest of the community. Following verses of the Qur’an and Ahadith of Prophet Muhammad (PBUH) particularly discourage privatisation :

1.       And make not over your property, which God has made a (means of) support for you, to the weak of understanding, but feed and clothe them from it and speak kindly unto them…….

-(Al-Quran 4:5)

2.       It is reported by Ibn Abbas that the Apostle of Allah said : Grazing land belongs to Allah and His Messenger and no one is permitted to keep it to himself.

-(Bukhari)

3.       Ibn Abbas reported that the Messenger of Allah said : All Muslims jointly share three things i.e. water, grass and fire.

-(Abu Daud)

4.       Abyaz-bin-Hammal Marbi reported that the Holy Prophet took back allotment of salt mine from him when he found that it was for common use of all Muslims.

-(Tirmizi, Ibn Majah)

The rich persons (who purchase public property in the process of privatisation) are mostly men of weak understanding in the sense that they are generally selfish and materialistic who do not share their wealth with the deprived of people. Placing public property in their hands at the cost of general good of vast majority is very cruel and callous act. This leads to concentration of wealth in few hands and thus balance of distribution and along with it the cause of social justice suffers a great setback.

The rich people normally do not pay taxes, dues and bank loans honestly and promptly and thus the privatisation of big economic projects generally results into fall of state revenues, fall of revenues of organisations providing utility services like electricity, and defaults of bank loans. They keep their earnings (rather their loot) in foreign currency accounts with foreign banks which causes flight of capital from economically backward countries to rich countries.

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V- Family Planning

Meaning of Family Planning : Synonymous terms with family planning are birth control, contraception, fertility control, planned parenthood, child spacing etc. ‘Birth control’ is a term that includes all methods used to regulate or prevent the birth of children. It is the deliberate prevention or delaying of births, by various artificial means. ‘Family planning’ or ‘planned parenthood’ are the terms which generally refer more broadly to policies, programs, and services designed to assist people in practicing birth control. In some countries, the program at national or governmental level is being lately called as the ‘population planning’ or ‘population welfare program’.

Due to advancement of science and technology in the modern world, medical care has improved, diseases have been largely controlled and death rates especially the rates of infant mortality have declined. The result of continuing high birth rates and low death rates has been rapid population growth particularly in Asia, Africa and Latin America. In many countries, far more children are born than can be adequately housed, fed, educated, or employed under the present economic conditions. The fear of overpopulation has inspired interest in family planning.

Islamic View-Point : The word ‘birth control’ or the word ‘family planning’ has nowhere been mentioned in the Qur’an and the Hadith nor there is any direct injunction in these primary sources of Islamic law which prohibits family planning or permits family planning. Therefore, opinions among the Muslim Ummah (community) are divided on the issue of family planning which, due to fear of rapidly increasing population in Islamic countries, has lately assumed vital socio-economic importance.

Those who oppose family planning quote the following verses of the Qur’an and Ahadith of Prophet Muhammad (PBUH) in support of their view :

1.       Slay not your children, fearing a fall to poverty. We shall provide for them and for you. Lo ! the slaying of them is a great sin.

-(17:31)

From this verse they try to prove that family planning tantamounts to slaying of children for fear of poverty which has been strictly prohibited by the Qur’an.

2.       And there is not a creature on earth but the sustenance thereof dependeth on Allah.

-(11:6)

From this verse they try to establish that since Allah provides sustenance to every creature including human beings, man need not worry about the number of children he is blessed with. According to them, practice of family planning tantamounts to mistrust in God’s ability to provide sustenance.

3.       Then we gave you once again your turn against them, and we aided you with wealth and children and made you more in soldiery.

-(17:6)

Multitude is the source of work force, of military strength, and above all source of social, spiritual and economic development. The concept of multitude is also the source of genius, as the wider the population base, the greater the probability of finding people of excellence. Thus the question of multitude and numbers is propagated by the opponents of birth control. They believe that the larger the number of Muslims and the higher their growth rate the greater would be their power and influence in world affairs.

4.       Ma’qal-bin-Yasar reported that the Messenger of Allah said: Marry and multiply, for I shall make a display of you before other nations on the Day of Judgement.

-(Abu Daud)

Those who favour family planning build up their arguments from the following verses of al-Qur’an and Ahadith :

1.       Mothers shall suckle their children for two whole years; that is for those who wish to complete the suckling……

-(2:233)

The above mentioned verse is taken to be a recommendation for breast-feeding a child. If period of two years is taken for breast-feeding and period of pregnancy from 6 to 9 months is added, then there would be a space of 2.5 years to almost 3 years between two children. Modern science has proved that prolonged breast-feeding is a good device to prevent conception, since it delays resumption of ovulation following pregnancy, So during breast-feeding a child, the likelihood of mother’s conceiving is greatly reduced. Thus by recommending child-spacing, the Holy Qur’an has encouraged family planning in the view of its exponents.

2.       And let those, who cannot find wherewithal to marry, keep chaste till Allah give them means by His grace.

-(24:33)

According to this verse of the Holy Quran, if a person has no means or he cannot afford to marry, he should keep chaste and should not marry till Allah provides him means to do so. In a way the verse suggests no marriage or late marriage to a man of no means if he does not find means to support a family. Late marriage is also regarded a good device of reducing size of family and thus it is an effective population control measure.

3.       ……….and if ye fear that ye cannot do justice (to so many) then one (only) or the (captives) that your right hands possess. Thus it is more likely that ye will not do injustice”

…. (4 : 3).

This verse instructs Muslims who cannot deal equitably with many wives to be satisfied with only one. Most interpreters read this to mean that being satisfied with one wife is a way to avoid injustice, but Imam Shafe’i, an expert in the Arabic language says that the concluding expression of the verse has more deep meaning. He explained the phrase ‘thalika adna alla ta’oulu’ to mean ‘so that you will not have to support too many children’ ! Thus the great Imam finds a reference in the Quran to family size.

4.       Abu Hurairah reported that the Messenger of Allah used to pray : O God! I seek Thy protection from Jahd-al-bala (grave hardships). When asked by the companions. ‘What is Jahd-al-bala, the Prophet explained : “poor economic conditions and a large family”.

-(Bukhari and Muslim)

5.       The advocates of family planning specially quote the following traditions of Prophet Muhammad (PBUH) about al-Azl, which means to withdraw before orgasm. Al-Azl was practiced by some companions of the Prophet who wanted to keep their family size small.

(i)       It is reported that Jabir said : ‘We used to practice al-Azl during the time of the Prophet (PBUH) who came to know about it, but did not forbid us [doing it.] – (Muslim)

(ii)     Jabir is also reported to have said : We used to practice al-Azl and the Qu’ran was being revealed, Sufian, the reporter of the tradition added : ‘Had this been something to be prohibited, the Qur’an would have prohibited us doing it.’

-(Muslim)

(iii)    Yet another Hadith is also reported on authority of Jabir who said ‘A man came to the Prophet (PBUH) and said “I have a mate who serves us and waters our palm trees. I consort with her (lawfully) but do not like her to get pregnant”. The Prophet said ‘Practice al-Azl with her if you so wish. What is pre-ordained for her will certainly befall her.’ After some time the man came back and said ‘the mate has conceived.’ The Prophet said ‘I told you that what is pre-ordained will befall her’.

-(Muslim, Ibn Majah, Ibn Hanbal, al Daramy)

(iv)    On the authority of Abu Hurairah the Prophet said : al-Azl is not allowed without the consent of the (free) wife.

-(Abu Daud)

(v)      On the authority of Jabir; the Companions asked the Prophet ‘O Messenger of Allah ! We used to practice al-Azl but the Jews claimed that it was minor infanticide.’ Such a contention by the Jews was categorically denied by the Prophet who said that the Jews had lied and added that ‘if Allah will its creation nothing could stop Him.’

-(Abu Daud, al-Tirmidhi)

Conclusion: We have stated above some of the arguments of the proponents as well as opponents of the family planning which they produce quoting verses of the Holy Quran and Ahadith of the Prophet in support of their contention. We have seen that there is not even a single verse of the Holy Quran nor a single Hadith of the Prophet of Islam which directly allows family planning or which directly forbids to do so. No doubt, there are some Ahadith of Prophet Muhammad (PBUH) about al-Azl (coitus interrupts), but no clear-cut inference can be drawn from them as the same are used by both the camps (the proponents as well as opponents of family planning) to advance their own point of view. So far as Islamic fiqh is concerned, almost all the classical schools of jurisprudence have found some room for the concept of Azl or contraception as majority of the jurists of each school have allowed the practice of Azl in certain situations with certain conditions. In the modern times, fatwas or rulings have been issued by some leading muftis and jurists of many Muslim countries to permit family planning under certain circumstances.

In the situation discussed above, we can accept the idea of family planning if there is really pressing need for it and if it is really in the interest and welfare of a Muslim family or the Muslim community. We can find for this conclusion a lot of support not only in the verdicts and rulings of the classical as well as modern jurists but also through the exercise of Ijtihad.

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VI- Islamic Solution of all Human Economic Problems

No economic system of the world has been so far able to put forward any satisfactory solution of the economic problems of humanity. It is only the Islamic economic system which puts up a beautiful solution of all human economic problems in verse No. 219 of Chapter 2 of the Holy Qur’an, which reads as follows :

“……… And they ask thee what they ought to spend. Say : Which is superfluous……….”

-(Al-Baqarah 2:219)

It means whatever you earn, you should full your needs out of that and the surplus should be spent in the way of Allah. In the broader sense the golden principle emanating from this sacred verse would be :

You should earn wealth through fair and lawful means. You should, then, satisfy, your genuine and legitimate needs in a moderate and prudent way. After doing so whatever you have, you should spend it for the cause of Allah for the welfare of the poor and less fortunate people.

If the above mentioned golden principle is acted upon devotedly and most faithfully, it would bring about the following situation : Every citizen would be earning his livelihood through fair (Halal) means which have been permitted by the Quran and the Sunnah. Thus the illegal, unlawful and immoral means of earning wealth like interest, bribery, smuggling, theft, embezzlement, business malpractices would automatically stop. It is these unfair (Haram) ways of earning which give rise to the concentration of wealth in few hands and thus create wide disparities in the distribution of income and wealth in the society.

After earning wealth through lawful means, every citizen would satisfy his needs which are genuine, fair, moral and religiously permitted. Expenditure on these needs would be modest and not lavish as the extravagance has been severely condemned by the Quran and the Sunnah.

Whatever is left with a citizen after satisfying of his needs, he would not hoard it, but would spend it in the ways, which have been permitted, like spending for the poor, for Jihad, for the cause of Allah, for education and learning, for travellers, for relieving the debtors, for freeing slaves, and for help to orphans, destitutes, needy, etc.

The state is today the only organization, which performs all such welfare activities, maintains social services, provides health care and education, wages Jihad against the foreign aggression, provides employment, maintains communications like railways, road, waterways, bridges, etc., provides protection to the individual in respect of his life, honour and property and above all performs so many other useful functions. So whatever remains with a person after satisfaction of his needs in a moderate way, he would hand over this surplus to the state.

After having obtained sufficient finances, the state would need no taxes and no loans. So all the taxes except Zakat shall be abrogated. Equipped with sufficient funds, the state would be able to provide for basic necessities of life such as food, clothing, shelter, education and healthcare to every citizen at a reasonable standard. It would provide employment to all those who are jobless. The state would discharge all of its duties of welfare state and would set up all big projects for economic development.

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