UNAIDS REGIONAL SUPPORT TEAM EASTERN & SOUTHERN AFRICA
the occasional papers series:
Experiences with Joint Financing Arrangements to Support Regional Organizations in Eastern and Southern Africa
Sherry McLean
July 2007
Uniting the world against AIDS
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1. Introduction Joint Financing Arrangements (JFAs) have been developed between several development partners‟ regional programmes and regional organisations in Southern and Eastern Africa since mid 2005. The JFAs have been intended to be a mechanism for greater alignment and harmonization, and reduced transaction costs for partner organisations. In preparation for a meeting of the informal International Collaborating Partners (ICP) HIV working group to be held in Maputo on 5 th and 6th July 2007, a need was identified for a rapid mapping exercise of experiences with using the JFAs. This rapid „stock take‟ took a total of 8 days between 14th – 29th June 2007 and involved interviews with regional partners and ICPs to gain their perspectives and experiences of the JFA process. The report firstly highlights the background to JFAs. It then describes the overall findings with a focus on three themes: alignment, harmonization and transaction costs. It goes on to describe the challenges in the process of negotiating, developing and implementing the JFAs . The next section deals with views about the role of UNAIDS in the JFA process. Finally, the report outlines lessons learnt and makes clear recommendations for ways forward. To avoid confusion, the report will refer to ICPs as „donors‟ and „partners‟ or „recipient organisations‟ as beneficiaries of funding support. It is hoped that the outcome from the recommendations of this mapping will contribute to influencing how future support mechanisms with regional African institutions could be developed further.
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Objectives and methodology of the mapping exercise
The objectives of the rapid assessment are to provide the ICP HIV working group with the following:
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An overview on what has been achieved in terms of the JFA‟s in support of regional organizations An overview of the process in negotiating developing and implementing the JFA‟s Views on the role of UNAIDS in working with both the partners and ICPs in process of JFA‟s Lessons learned and recommendations for a way forward. 1
Terms of Reference
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A framework of questions was drawn up and circulated by email to 26 people on a contact list provided by UNAIDS. A total of 19 people were interviewed that included representation of regional partner organisations, bi-lateral donors and UNAIDS working in the Southern and Eastern African regions. See annexe 1 for list of respondents. 3. Background
In March 2005, the Paris Declaration on Aid Effectiveness of the OECD/DAC was signed by the Nordic Plus group that included Denmark, Finland, Sweden, Norway, the Netherlands, Ireland, and the UK. Commitments from the Paris Declaration: Developing countries will exercise effective leadership over their development policies, strategies, and to coordinate development actions Donor countries will base their overall support on receiving countries' national development strategies, institutions, and procedures Donor countries will work so that their actions are more harmonized, transparent, and collectively effective All countries will manage resources and improve decision-making for results Donor and developing countries pledge that they will be mutually accountable for development results.
In addition the Global Task Team report made recommendations on the roles and actions to be taken by the UN, GFATM and international donors to strengthen country responses on improving AIDS coordination. These developments gave a clear mandate and direction to the development of Joint Financing Arrangements. As a result, over the past two years significant efforts and commitments have been made amongst donors and regional partners to principles of alignment, coordination and harmonization in the provision of funding and technical support to improve responses to HIV and AIDS. In all 5 JFAs have been agreed and 3 are currently in the process of being signed.2 It should be noted that this review considers donors and partners working at regional level in Eastern and Southern Africa and the experience may not be
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See Annexe 2 for monitoring table updated 21.06.07
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4 completely transferable to government or civil society. country programmes and partnerships with
JFAs differ, but tend to have several important common features. These include: funding from several donors; alignment of support with the organisation‟s overall strategic plan, rather than project support; elements of joint reporting and pooling of funding from different donors; and appointment of a lead donor for each JFA. An important point for clarification is the difference between Joint Financing Arrangements and Joint Financing Agreements. Joint Financing Agreements were developed as a tool to be used as a bilateral funding mechanism between donors and governments and are therefore lergally binding between signatories. This review refers to Joint Financing Arrangements that offer guidelines and principles by which signatories should adhere to but are not legally binding.
Therefore, if an Agreement template is being used as a framework tool for negotiations between donors and civil society organisations, for example, modifications will be required so that Joint Financing Arrangements are appropriate and reflect the circumstances and interests of NGO partners.
4. Findings The overall response to the exercise was positive by donors and partners alike, who felt that a review of the JFA process at this stage was timely. It is noteworthy that the experiences and views of donors and partners were similar and largely did not differ despite their different perspectives. However, some respondents did indicate that there could be benefit in giving the partner organisations further opportunity to provide a joint response about their experiences of JFAs.. The exercise indicated that there is substantially more JFA „activity‟ in the Southern Africa than in the Eastern African region. Possible reasons for this are that UNAIDS and SIDA have provided both strategic direction and technical support are based in Southern Africa.
4.1 Overview of what has been achieved in terms of the JFA’s support of regional organisations. JFAs have provided a major stepping stone for donors to put into practice and implement the principles outlined in the Paris Declaration. They have provided a useful structural framework for working that clearly outlines agreed principles. They require discipline, adherence and commitment on behalf of partners and
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5 donors alike. In terms of improving harmonization, alignment and reduction in transaction costs, how have the JFAs played a part in achieving these objectives these goals so far? 4.2 Greater harmonization Both partners and donors reported high levels of commitment to the process. Major learning has taken place in a process that has required negotiating different viewpoints, development approaches, reporting and management systems. In terms of donor reporting and system management there has been a great deal of cross organizational learning and sharing of resources. For example, the Royal Netherlands Embassy (RNE) will share advice from its legal department for technical advice, whereas Swedish International Development Agency (SIDA) has brought advice to the table from their finance section. Less competition was reported amongst donors and there is a sense of greater collaboration and „pulling together‟ through the information sharing process. “We learned from one another about the challenges we all face and especially how we both need to account to our constituencies” It was considered that donor development management and practice has improved as a result of JFAs because they require greater transparency. In the past there was no obligation for donors to inform each other of their actions, so that once the JFA process started, donors became more involved in monitoring or „policing‟ each other. Because the development of JFAs has involved consultations that are participatory, opportunities have opened up for other potential signatory donors to observe and learn from the process. The joint meetings between partners and donors provide a forum for wider information sharing and planning for future support as there is clear information exchange and dialogue. This more open process has improved communication and resulted in greater transparency between donors and partners. There was reported improvement in terms of the quality and quantity of partner reports to meet management and monitoring requirements of donors. Nonsignatories have also gained through attendance at joint review meetings and through information exchange. “It has been a very rich experience that has built mutual trust and support amongst donors and deeply examines and tests principles of equality.” In summary, the experience of working together to develop and agree a JFA was described as being a very enriching process that has provided an end result
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6 which is more than a guiding document stating principles for administrative purposes.
4.3 Improved alignment One of the more important findings is that donor support appears to have been scaled up as a result of JFAs, resulting in longer-term funding, security and predictability for partners. In addition, a wider range and greater number of organisations seem to be being reached effectively, and several respondents held the view that the accumulation of support is making a greater impact. This strengthening of support appears to have occurred although most of the regional organisations had in fact received some support from them previously. The longer term effect of JFAs in terms of scale, depth and coverage of support warrants further study. As JFAs are specifically aligned to a partner‟s strategic plan and objectives, core funding now provides sufficient resources to cover capacity building, administrative and organizational running costs. In the past, earmarked funding for specific programme focus areas was considered to be largely donor driven, for example, gender, campaigns, protection for orphans and vulnerable children. Donor alignment to strategic plans has meant that partners have more control over their own programmes and they have been enabled to decide on the objectives and targets themselves. JFA meetings have offered opportunities for donors to shape ideas around regional issues and as a result alignment in future programme planning and design is expected to improve. However, it was noted that explicit objectives of the JFA initiative itself had not been developed. This was seen as a possible impediment to further progress in improving operational efficiency, appropriate resource allocation and impact. Partner organisations and donors alike have deepened their understanding of each others organizational „workings‟. In this way donors have deepened their understanding regarding capacity and administrative challenges of partners. Partners better understand the donor environment, different aid modalities, accountability requirements and how these differ between countries. “We have moved from attribution as an accountability principle to contribution as an accountability principle”. Concern was expressed about alignment of funding and disbursements in relation to alignment with the partner organisations‟ strategic plans. There can be time periods between one plan ending and another beginning. A gap of a few months may result in „dry‟ periods of insufficient funding that organisations can
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7 find it hard to bridge. Several respondents recommended that agreement be reached among donors to overlap disbursement of funds so that partners are sufficiently supported to carry them forward into subsequent strategic plan timeframes. The shift in approach to more equal relationships has meant that partners now have more control over their destiny. One partner noted that the past “colonial” attitude of donors has diminished and that the JFAs have played a key role in this shift. It was also reported that greater partner ownership has developed even though JFAs were introduced by donors in the beginning as a new funding mechanism. Partners reported that they feel more confident and „empowered‟ as a result of the JFA process and have benefited from capacity building and additional technical support provided by UNAIDS to develop strategic plans. This has been a significant contributory factor.
4.4 Reduction in transaction costs Many respondents had the view that one of the spin offs of donor alignment of donor to partner‟s strategic plans, is that transaction costs in terms of reporting to multiple donors for multiple projects have been substantially reduced. “We tried to harmonise work as donors and reduce the work load of partners having to report to multiple donors”
In order to avoid duplication of reports, a single organizational capacity assessment and evaluation can be shared amongst donors. Transport costs to and from meetings have been reduced substantially for partners as there is now one meeting arranged for all donors to attend at the same time. For example, SADC now has two joint review and planning meetings per year with all donors. These are attended by both signatories and non signatories of JFAs. There is no doubt that a system of having one meeting, one strategic plan presentation and one report has greatly reduced transaction costs in terms of transport costs and time resources for partners and donors. An opportunity to exchange information has significantly reduced duplication, resulted in greater transparency and more open communication between donors and recipients In addition, a pooled fund means less time spent on financial accounting and management. For example, one partner recounted how they had up to 3 different accounts for a single donor in the past.
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8 While less duplication of reporting was described, the big question is how much transaction costs have actually been reduced, as well as whether and where there is potential for more efficiency. Some signatories still require a separate proposal for funding approval at HQ and some partners still have to negotiate other contracts and agreements with non signatories. There also seems to be potential for less transaction costs once more confidence is built in developing arrangements and in ability to delegate various oversight and other duties to other ICP members. Further examination of this issue is likely to helpful in this regard. Unanimously, respondents felt that JFAs are a useful and a preferred funding mechanism and not a single respondent said that they would prefer to go back to old ways of working. “There is no going back now”
5. Challenges in the process in negotiating and implementing the JFAs Both partners and donors commented on the lengthy process in terms of time required for meetings and correspondence of draft JFAs between partners, donors and their HQ. On one hand, the process required negotiations with partners regarding the operational plan, objectives and budget, and on the other, negotiations amongst donors to reach agreements on funding amounts, reporting procedures and so on. Although it was noted that these processes were demanding, they also resulted in a great deal of beneficial learning and changes in dynamics. “Through collective decision making, we have been able to find ways of finding an agreement – there is no dominant „one voice‟ like before “
One reason for extra work is that JFAs were designed originally as bi-lateral agreements. So governments, adjustments and modifications are required to adapt them to arrangements with NGOs and civil society organisations. It was also reported that not all JFA processes have been smooth and expectations have not always been clearly spelt out. So guidelines could be beneficial , so that clear roles for lead donor, expectations and tasks for partners and donors are clarified, before each JFA is signed. . The issue of placing trust in the „representative‟ role of the lead donor was not reported as being problematic as yet. However it was viewed as a potential risk in relationships if there was a particularly dominant leader donor. It was also reported that there has been a closing ranks of donors in some JFA negotiations that resulted in a „follow the leader‟ approach.
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9 One of the challenges has been the different reporting requirements and systems amongst donors at HQ level. As long as parallel funding approval systems and a plethora of different regulations and requirements exist amongst donors, transaction costs will not be significantly reduced. For example, although Irish Aid is a signatory to several JFAs, HQ funding approval is still required from the Programme Approval and Evaluation Group and these meetings do not always coincide with partner‟s strategic plans. Clarification is needed regarding the mandate and powers between donors at regional programme levels. These differ considerably between donors. For example, DFID requires ongoing consultation between regional offices and HQ for decisions and funding approval. SIDA is more flexible with large budgets and decision making powers lying largely at regional level. A common understanding of the nature of certain leadership and team member roles also seems to be important to establish. Qualities such as integrity and patience as well as leadership, negotiation and strategic planning skills were noted as being important. Processes of electing or selecting the lead donor may need to be outlined in guidelines and reviewed by peers if necessary. Roles of lead donor, clear and agreed time frames, respect for boundaries, levels of commitment, different donor capacities and tasks all need to be articulated more clearly and these would be country specific to each JFA.
6. Role of UNAIDS in working with partners and ICPs in the process of JFAs “The role of bi-lateral donors is to be intelligent bankers and the role of UNAIDS is to provide the technical support and back up so that agreements can be reached more smoothly”. There was general agreement that the role of UNAIDS has been to offer highly strategic direction in the development of JFAs in the regions. The organisation has played an important role in coordinating meetings, providing technical support and facilitating information exchange amongst donors and partners alike. The organisation has been instrumental in shaping thinking on global issues, for example universal access and male circumcision issues. Some partner organisations feel they have regained their confidence and trust with donors through facilitated dialogue opportunities by UNAIDS. Partners reported that their capacity has been greatly enhanced as a direct result of the support they received in particular, the valuable provision of UNAIDS-funded technical assistance through the Technical Support Facility. Consultant support has assisted partners in their strategic planning, organizational development and budgeting and this went a long way in building confidence and preparing partners for the JFA negotiation process. The accessibility, technical knowledge,
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10 assistance and encouragement provided by UNAIDS has resulted in partners having greater control and ability to voice their needs and concerns in the JFA process. Some donors indicated that UNAIDS role as a neutral facilitator was a key asset, yet this could be compromised if UNAIDS was seen to be a “donor” or to develop its own vested interest in certain organisations because it had invested in technical support for them.
“We feel empowered by this process and it is good”.
7. Lessons learnt and recommendations The main lessons that have emerged from the exercise are the following. Improvement in coverage and harmonisation Scaling up of support seems to have resulted in reaching wider range and greater number of organisations. However it is not clear whether this has in fact happened and further research will be required to ascertain if this is indeed the case. Alignment to partners strategic plan provides core funding to cover administration and capacity building gives greater scope for longer term sustainability Reduced transaction costs have resulted from the “one meeting, one report, one plan” approach JFAs and harmonization have facilitated greater cross organizational learning and programme management capacity amongst partners and donors Information exchange and greater transparency have resulted in less competition amongst donors and greater equality for partners
Recommendations: JFA‟s should continue to be supported as a funding mechanism and other donors and regional partners be lobbied to join the process Ensure that the scope of further JFAs be widened and that adequate opportunities be provided for other key organisations to enter negotiations JFAs need to be modified to better represent the interests of recipient organisations.
Capacity development
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Partners and donors have had important opportunities broadened their expertise in both technical and soft skills. There is a need to broaden and build capacity development amongst partners and donors to plan, design, negotiate, implement and monitor the JFA process. On the technical side greater knowledge has been gained regarding legal requirements, funding approval mechanisms and systems, accountability issues and institutional analysis. On the soft side there is wide recognition that specific skills are required to „manage‟ negotiations. These include facilitation, chairing, listening, lobbying, strategic and planning skills. For donors, capacity building needs to occur at HQ as well as regional and country office levels. Opportunities also need to be developed for partners to manage the JFA process optimally and share their resources and experiences.
Recommendations: Develop capacity in technical and soft skills required to negotiate JFAs for both donors and partners. Support opportunities for regional partners to share their experiences and resources.
Disbursements, reporting and funding approval mechanisms There are implications if one donor puts in far greater funding than others and although this may result in adequate funding for recipient organisations it leaves no space for other donors to contribute The complexities arising from different funding approval procedures amongst donors that can result in different disbursal times still remain and can place a huge strain on partners. In addition there are major implications for long-term planning, predictability, absorption capacity and regional programme budgets for donors and partners.
Recommendations: Develop greater coordination and collaboration for longer term planning amongst donors and partners with regard to timing, period of funding and amounts Consider support for a further study to ascertain whether JFAs have actually reduced transaction costs in regard to reporting requirements and where and how they can be reduced further.
Harmonization and institutional capacity at HQ level
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Harmonisation and alignment is limited by the different mandate and decision making powers of the various donors at country level, as well as the different political and government environments of donor countries in Europe. The challenge is for HQ in Europe to agree harmonized systems and coordinate with others, taking an example from the field. Experience suggests that specific areas of expertise and responsibility can be shared or distributed amongst donors for efficient use of resources and expertise. Could this way of working happen at EU level also?
Recommendations: A joint letter be written from the donor group to Nordic + Director Generals requesting more streamlined harmonized approval systems. Create longer term systematic feedback flows to change existing policies at HQ level to more coordination and harmonized systems amongst signatories.
Role of lead donor The role and responsibilities of the lead donor is considered to be crucial and has not been clear in all JFA processes. Risks emerge if there is lack of clarification in how the lead donor is selected or elected, expectations of their tasks and skills required. In addition, a lead donor needs to be familiar with partner‟s as well as other donor‟s procedures and regulations.
Recommendation: Develop guidelines for lead donors that clearly spells out the expectations of partners, selection and peer review process if necessary.
Role of UNAIDS One of the key attributable factors of the success of the JFA process was reported to be UNAIDS highly valued contribution of UNAIDS. This was attributed to the high levels of commitment, leadership, vision and technical expertise of the individual staff members involved in the development of the JFA process. Concern was expressed about the discrepancies of organizational capacity of UNAIDS at country levels. There was a shared view that the tensions between the UN agencies needs improvement so that they can complement each other and work more effectively.
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Recommendations: UNAIDS should continue its neutral role as facilitator of meetings, information sharing and technical support. A clear recommendation that a joint UN approach be demonstrated at regional and country level.
8. Conclusion There is no doubt that much has been gained during through the process of JFAs for recipient organisations and donors working in the regions of Eastern and Southern Africa. Technical skills, knowledge and experience have been deepened and the relationship between them has become more equal, transparent and mutually accountable. Regional organisations reported that their capacity, confidence and ownership of their direction and activities is greater as a result of the process. The JFA process has afforded the opportunity „to spread the word and widen the net‟ for others to commit to the principles of the Paris Declaration. Non-signatory donors have had the opportunity to learn by observing and participating in the negotiations, presentations, consultations and discussions with partners. However, several themes have emerged that it is recommended be carried forward for further discussion at the Maputo meeting: A future strategy for JFAs is needed in terms of defining objectives, selection of organisations, allocation of resources and longer term planning. Whilst there was general agreement that the JFAs are a preferred way of working, ongoing monitoring will be required. In the coming years an evaluation may be useful to measure whether JFAs have made a contribution to greater impact of HIV/AIDS responses and improved partner and donor performance. A comparative study would be helpful to assess actual reduction costs in terms of time, human resources, reporting and whether funding has in fact increased as a result of JFA developments. Several respondents recommended that recipient organisations be asked to develop a joint response in order to enrich this review process. Further discussions are needed amongst ICPs to explore issues of trust, “representivity”, sharing roles and pooling resources. In addition ways of improving disbursement procedures and possible overlapping of funds, so that predictability for recipient organisations could be improved. Issue of whether a JFA should be a legally binding document – is this possible or indeed desirable?
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14 Communication with HQ levels to improve coordination and alignment of reporting, approval, legal and financial management systems at HQ level. Guidelines need to be developed to establish criteria for selection, roles, responsibilities and skills required for lead donors.
Finally, the consultant would like to thank all those who responded and for their valuable contributions to this process.
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ANNEXE 1.
LIST OF RESPONDENTS IRISH AID SAFAIDS SADC SANASO RATN UNAIDS HEARD SAT CIDA RNE SDC DFID SIDA UNAIDS Anne Anamela and Nicola Brennan Lois Lunga Antonica Hembe, Boemo Sekgoma Mary Mbeba John Mwesigwa Atieno Odenyo, Mark Stirling Prof. Alan Whiteside Anita Sandstrom Pamela Branch Isabelle van Tol Nomfundo Mbuli Robin Gorna and Tim Martineau Ulf Kallstig, Bright Phiri, Anne Lindeberg Atieno Odenyo, Mark Stirling
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ANNEXE 2
Monitoring Table - Joint Financing Arrangements in Eastern and Southern Africa Updated: 3 July 2007
Regional NGOs Name of Organization Strategic Plan Duration Regional NGOs and Resource Institutions EANNASO Irish 2007-2009 Aid HEARD Sida 2006-2010 Lead Donor Strategic Plan total budget (USD) 4,197,911 Date JFA signed JFA in process Dec 2005 Dec 2005 Dec 2006 May 2007 Dec 2006 June 2006 Not yet signed Oct 2006 Oct 2006 Oct 2006 Oct 2006 Oct 2006 July 2006 Partner Signatories Irish Aid Sida Hivos UNAIDS Sida Difd RNE Irish Aid UNAIDS Sida CIDA Irish Aid UNAIDS Irish Aid Sida UNAIDS Dfid USAID Sida Irish Aid UNAIDS Amount (USD) Duration of Support 1 year 120,000 5,082,000 1,780,821 4,383,561 1,643,835 72,000 2,169 72,000 1,816,155 600,000 160,000 500,000 400,000 120,000 150,000 100,000 2007 2006/10 2006/10 2006/10 2007/10 2006/07 2007/09 2006/07 2006/08 2006/08 2006/07 2006/08 2005/08 2006/07 2006/07 2006/07 3,476,155 Total Amount from Donors 120,000 Schedule of Review
17,336,657
12,962,217
RATN
Sida
2006-2010
10,563,000
74,169
SAFAIDS
Irish Aid
2006-2010
SANASO
Irish Aid
2006/2007 (transitional plan)
270,800
370,000
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Name of Organization SAT REPPSI
Lead Donor CIDA ?
Strategic Plan Duration 2005-2008 2006-2011
Strategic Plan total budget (USD) 9,659,508 (+ 12,928,286) ?
Date JFA signed
Partner Signatories Sida CIDA RNE Swiss Sida
Amount (USD) 5,289,000
Duration of Support 2006/09
Total Amount from Donors 5,289,000 1,500,000
Schedule of Review
Almost there!
1,500,000 4,200,000
2007/11 2007/10 4,200,000
IFRC
?
2006-2010
300,000,000
ARASA
?
2007-2009
6,000,000
Potential… Sida RNE Ireland Potential… Sida RNE
2008/09?
Regional Economic Commissions, etc EAC ? 2007-2011 SADC Sida 2005-2009
4,040,000 5,100,000
JFA in process Nov 2005
Sida Irish Aid Irish Aid Sida RNE Dfid Sida UNAIDS RNE USAID Sida RBE DFID JICA 1,345,300 2006/08 2006/08 2006/08 2006/08 2007/10 2007 1,345,300
SADC PF
Sida
2006-2010
3,900,000
JFA in process
2,900,000 100,000 1,000,000
3,000,000
AU
Sida
2007-2008
500,000
1,000,000
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