Finland's UBI experiment

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Finland's UBI experiment

Post by FaxModem1 » 2018-04-30 12:20pm

NBC News
ECONOMY
Finland's experiment with giving away money shines a light on the idea of universal basic income
Proponents say guaranteeing an income would pull millions and millions of people out of poverty and help stabilize the middle class.
by Martha C. White / Apr.29.2018 / 10:59 AM ET

Clients in a Kela office, a Finnish Social Insurance Institution, in Helsinki on Jan. 4, 2017. Finnish government launched at the beginning of 2017 an experiment testing an unconditional basic income, conducted by Kela, among 2,000 people between the ages of 25 and 58.Kimmo Brandt / EPA file
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There might be no free lunch, as the saying goes, but a bold experiment in Finland has renewed interest in the idea of money for nothing.

In January 2017, the country embarked on a two-year pilot program that gave 2,000 unemployed citizens the equivalent of nearly $700 a month, with no strings attached. The program will run through the beginning of next year after the government announced this week that it would decline to extend the duration of the program.


The idea of a guaranteed or universal income, often abbreviated to UBI for “universal basic income,” has attracted attention on this side of the Atlantic, as well. Mark Zuckerberg floated the idea in the speech he gave last year at Harvard University’s commencement, and Facebook co-founder Chris Hughes argued in an editorial earlier this year that working Americans who make less than $50,000 a year should get a monthly stipend of $500.

Alaska has the closest program to a UBI in this country: The Alaska Permanent Fund distributes an annual dividend based on oil and gas investment returns to every person in the state annually.

Social scientists say stagnant incomes, rising inequality and technological advances all factors in the growing interest in universal income. To combat the problem, Hughes co-founded the Economic Security Project, an organization that advances the idea of a universal basic income in the United States.

Alaska has the closest program to a UBI in this country, paying out an annual dividend based on oil and gas investment returns to every person in the state.

“Because of the extraordinary level of wealth inequality in this country we have to be thinking really big,” said Natalie Foster, co-founder and co-chair of the project. “Guaranteeing an income would pull millions and millions of people out of poverty and help stabilize the middle class,” she said.


“Recently, it’s attracted a lot of attention in large part because of fears of automation and that jobs will disappear,” said Ioana Marinescu, an assistant professor at the University of Pennsyl­vania’s School of Social Policy & Practice. “It’s an attempt to create economic security for all, and people don’t have to jump through hoops in order to qualify.”

Proponents say that no-strings-attached cash gives poor people more flexibility and autonomy to decide what’s best for them financially — an idea that makes the UBI appealing to those on both sides of the political spectrum.

How to define it?
“We have existing programs targeted to low-income people — SNAP, public housing, Medicaid, other types of what we call in-kind support,” said Damon Jones, an associate professor at of University of Chicago’s Harris School of Public Policy. “There’s one argument that if you give someone cash they can best decide what it’s used for,” he said.

For a simple phrase, there are a surprising number of variables. Some people propose that universal be just that — everyone gets a payment — even though this ultimately means that people wealthy enough not to need an income supplement will receive one anyway.


This could help make it politically palatable, though. “Sometimes when programs are universal, they’re more politically feasible and sustainable,” Jones said, pointing out broad support among Americans of all political stripes for Social Security and Medicare.

Tying a supplemental income system to the existing tax code or to a worker’s existing is another option, although experts say a universal payment system would be simpler to administer than one that phases out based on earnings or other criteria.

Another big question is what constitutes “basic.” Some supporters advocate for a level sufficient to live on — albeit frugally — although there are concerns about how much this would cost and where the money to fund it would come from. There are also questions about whether people in larger households, or who live in more expensive parts of the country, should get higher payments.

Critics of UBI say it discourages people from having jobs, but Facebook’s Hughes argued that the closest analogue we have — the Earned Income Tax Credit, which gives families up to $6,000 in supplementary income a year — hasn’t been a disincentive to work, and studies of Alaska residents before and after the state’s oil fund was established found that the extra money led to an increase in part-time work, but no falloff in full-time employment.


Some experiments with cash grants to poor people in developing countries have shown promise, but researchers say comparisons to the United States are limited, since the landscape of economic challenges and opportunity looks much different in the world’s largest economy.

“What I like about the UBI debate is it puts the spotlight for fiscal policy back on everyday people and why we don’t do more to address them,” said Rakeen Mabud, program director of the 21st-century economy program at left-leaning think tank the Roosevelt Institute. “Our economy is moving in a direction where that social contract is breaking down,” she said.

How to make it work?
Creating a universal income program here would also be much more expensive, and the question over how it would be funded looms large.

Although the idea of a guaranteed income has garnered support from economists on both sides of the political aisle, those on the left generally see it as a supplement to the existing safety net, while right-leaning analysts view it as a substitute.


“That’s a huge ideological divide,” said Michael Tanner, a senior fellow at the Cato Institute, a right-leaning think tank. “On the right, it’s seen as a replacement for welfare. On the left, it’s seen as in addition to,” he said.

Absent the elimination of big poverty-reduction programs like food stamps and housing subsidies — steps that still might not be enough to fund a true UBI — the government would need to raise taxes.

“In the short run, the most promising way to go about this would be to use a carbon tax. We need to reduce emissions anyway, then we can take the revenue from the carbon tax and give it back on a per capita basis,” Marinescu said.

Other proposals have suggested raising the income tax on the wealthiest Americans, or funding a UBI system with taxes on a particular commercial activity like data collection or financial transactions — ideas that are appealing to liberals, but anathema to conservatives. “On the right, that’s a nonstarter. There’s no support for higher taxes,” Tanner said.


Although this stalemate over funding could be an insurmountable impasse for policymakers seeking to implement a federal UBI, states and municipalities are putting their toes in the water with smaller-scale experiments. The San Francisco suburb of Stockton launched a pilot program this year to give $500 a month to some of its lowest-income residents, and a few Western states — California, Washington and Hawaii — have considered the idea.

"It’s a broader question of what we value as a society. As a country, we’ve been prioritizing the interests of the wealthy few for many many years."

Advocates are hopeful that these efforts could serve as prototypes for an eventual national model. “As we move forward, the scope of the problem will become so clear and so big, people across both sides of the aisle will recognize something has to change,” Foster said.

“It’s a broader question of what we value as a society,” Mabud said. “As a country, we’ve been prioritizing the interests of the wealth few for many many years.”

Redistributive programs like universal basic income, she argued, would help level this playing field. “They’re taking agency and power from the top of the economy, corporations and 1 percent and putting it back in the hands of everyday people. All of these are allowing people to have more agency in their economy.”

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Re: Finland's UBI experiment

Post by Bedlam » 2018-04-30 01:57pm

That the article says nothing about the actual Finland experiment.

Everything is about theoreticals of introducing it into the US without actually saying anything about how things are working out. The government isn't going to expand it past the 2 years, why? It asks if people will get jobs if they have a UBI, well did those in Finland get jobs?

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Re: Finland's UBI experiment

Post by Vendetta » 2018-04-30 05:38pm

There's lots of brouhaha about the trial at the moment with a number of sources claiming it "failed" but nobody is actually citing any statistics or outcomes based on its performance so far.

This, of course, is because the people running the trial won't start doing the data analysis which will tell anyone how the policy works until 2019.

The government isn't going to extend the trial presumably because they want that actual statistical analysis that says what the outcomes were.

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Re: Finland's UBI experiment

Post by The Romulan Republic » 2018-04-30 06:51pm

UBI is basically a necessity due to automation, unless we want to face the usual consequences of half the population being unable to feed or house themselves (ie revolutions, reigns of terror, extremist dictatorships, genocides). So I hope that Finland's experiment proves a success.

Don't think of it as "Giving my tax money to poor people". Think of it as a necessary national security expenditure (in addition to all the benefits of streamlining the social safety net and giving people more money that they can put back into the economy).
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Re: Finland's UBI experiment

Post by ray245 » 2018-04-30 06:53pm

Well it's probably time to say goodbye to the Protestant work ethic that has dominated our economic thinking for so long.
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Re: Finland's UBI experiment

Post by Elheru Aran » 2018-04-30 06:58pm

ray245 wrote:
2018-04-30 06:53pm
Well it's probably time to say goodbye to the Protestant work ethic that has dominated our economic thinking for so long.
...can you elaborate?
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Re: Finland's UBI experiment

Post by ray245 » 2018-04-30 07:12pm

Elheru Aran wrote:
2018-04-30 06:58pm
ray245 wrote:
2018-04-30 06:53pm
Well it's probably time to say goodbye to the Protestant work ethic that has dominated our economic thinking for so long.
...can you elaborate?
Basically the idea that a person's worth is determined by the amount of work or toil they put in. You deserve money if you worked hard and so forth. A lot of right-wing economic ideas are built upon this principle.

So UBI basically goes against that idea by giving money to people who didn't "work".
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Re: Finland's UBI experiment

Post by The Romulan Republic » 2018-04-30 07:32pm

ray245 wrote:
2018-04-30 06:53pm
Well it's probably time to say goodbye to the Protestant work ethic that has dominated our economic thinking for so long.
And good fucking riddance to it.

Its my belief that most people want to work- as someone who's done prolonged unemployment, I can tell you that few states of existence I have experienced are more miserable than sitting around with nothing to do all day, and when I'm not working, I volunteer, because I'd probably go completely mad otherwise. But ensuring a minimum basic level of income for everyone, employed or otherwise, would provide people with a safety net, so that they could afford to take a chance on doing something they love, or starting a small business, or whatever, rather than having to work a shitty job to "earn" the right to live. Or, hell, sit around doing nothing all day, if that's the way they want to live. I don't think "not starving/freezing" is something you should have to earn.

The idea that financial wealth is a measure of a person's worth is in any case absurd on the face of it (or are we supposed to believe rich kids are worth more because daddy left them a lot of money). And, quite frankly, un-Christian, for those who care about that.
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Re: Finland's UBI experiment

Post by ray245 » 2018-04-30 07:40pm

The Romulan Republic wrote:
2018-04-30 07:32pm
ray245 wrote:
2018-04-30 06:53pm
Well it's probably time to say goodbye to the Protestant work ethic that has dominated our economic thinking for so long.
And good fucking riddance to it.

Its my belief that most people want to work- as someone who's done prolonged unemployment, I can tell you that few states of existence I have experienced are more miserable than sitting around with nothing to do all day, and when I'm not working, I volunteer, because I'd probably go completely mad otherwise. But ensuring a minimum basic level of income for everyone, employed or otherwise, would provide people with a safety net, so that they could afford to take a chance on doing something they love, or starting a small business, or whatever, rather than having to work a shitty job to "earn" the right to live. Or, hell, sit around doing nothing all day, if that's the way they want to live. I don't think "not starving/freezing" is something you should have to earn.

The idea that financial wealth is a measure of a person's worth is in any case absurd on the face of it (or are we supposed to believe rich kids are worth more because daddy left them a lot of money). And, quite frankly, un-Christian, for those who care about that.
I think many people's issues with welfare programs are rooted in people's fear of having their self-worth being destroyed by others. That's how people are taught from young to measure their personal self-worth and self-esteem. People would vehemently oppose welfare programs because they think having someone else get money for free equates to their wealth being useless as a measure of one ownself.
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Re: Finland's UBI experiment

Post by mr friendly guy » 2018-05-01 03:50am

Vendetta wrote:
2018-04-30 05:38pm
There's lots of brouhaha about the trial at the moment with a number of sources claiming it "failed" but nobody is actually citing any statistics or outcomes based on its performance so far.

This, of course, is because the people running the trial won't start doing the data analysis which will tell anyone how the policy works until 2019.

The government isn't going to extend the trial presumably because they want that actual statistical analysis that says what the outcomes were.
Indeed. The Finnish government decided not to extend the trial pending analysis of the data. The trial will finish in 2018, and we most probably won't get info until late 2019 or early 2020. This makes sense to me. Amazingly enough in certain circles people are citing the trial fail. While I am quite dubious on whether this type of scheme will work, I am however a proponent of empirical evidence, and it boggles the mind that people are claiming some type of triumph when we don't yet have data one way or the other.
Elheru Aran wrote:
2018-04-30 06:58pm
ray245 wrote:
2018-04-30 06:53pm
Well it's probably time to say goodbye to the Protestant work ethic that has dominated our economic thinking for so long.
...can you elaborate?
Work ethic is thought to be one of the drivers of economic growth and one of the reasons why some countries do better than others, economically speaking. You can gauge it by the number of hours worked. The Protestant work ethic was originally coined by German sociologist Weber, who thought it was more commonly found among Protestants in the US (vs Catholics for example), hence the term. Some historians like Niall Ferguson while admitting that work ethic is a driver of economic growth, felt the Protestants helped more by increasing literacy rather than hours worked.

3 points of note. I have seen the Protestant work ethic being misused by one Pro Christian author who not only did not explain it, attributed the economic growth due to the number of Christians rather than hours worked. Two, you don't need to be a Protestant to work long hours, and its the hours worked which seems to contribute to economic growth, for example Asians work long hours and most of them aren't protestants. Three, this eventually reaches a limit, for example Japanese works waaay longer hours but the difference in productivity compared to say the West, is minimal if at all.
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Re: Finland's UBI experiment

Post by Vendetta » 2018-05-01 05:16am

mr friendly guy wrote:
2018-05-01 03:50am
Three, this eventually reaches a limit, for example Japanese works waaay longer hours but the difference in productivity compared to say the West, is minimal if at all.
Technically it's the US you should be looking at for long hours of lower productivity. Average US worker does a few more hours than the average Japanese worker, with just as strong a culture of presenteeism, and GDP per hour worked in the US is lower than Japan.

Japan about rides the OECD average for hours worked and GDP per hour.

(Germany is the major country for high productivty per work hour, on average in 2016 a German worker did 400 hours less than their US counterpart but was more productive in those hours.)

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Re: Finland's UBI experiment

Post by The Romulan Republic » 2018-05-01 04:15pm

ray245 wrote:
2018-04-30 07:40pm
The Romulan Republic wrote:
2018-04-30 07:32pm
ray245 wrote:
2018-04-30 06:53pm
Well it's probably time to say goodbye to the Protestant work ethic that has dominated our economic thinking for so long.
And good fucking riddance to it.

Its my belief that most people want to work- as someone who's done prolonged unemployment, I can tell you that few states of existence I have experienced are more miserable than sitting around with nothing to do all day, and when I'm not working, I volunteer, because I'd probably go completely mad otherwise. But ensuring a minimum basic level of income for everyone, employed or otherwise, would provide people with a safety net, so that they could afford to take a chance on doing something they love, or starting a small business, or whatever, rather than having to work a shitty job to "earn" the right to live. Or, hell, sit around doing nothing all day, if that's the way they want to live. I don't think "not starving/freezing" is something you should have to earn.

The idea that financial wealth is a measure of a person's worth is in any case absurd on the face of it (or are we supposed to believe rich kids are worth more because daddy left them a lot of money). And, quite frankly, un-Christian, for those who care about that.
I think many people's issues with welfare programs are rooted in people's fear of having their self-worth being destroyed by others. That's how people are taught from young to measure their personal self-worth and self-esteem. People would vehemently oppose welfare programs because they think having someone else get money for free equates to their wealth being useless as a measure of one ownself.
Yeah, that's part of.

It won't be easy to break free of this mindset, but in my view it has to happen. The rise in automation will likely lead to the greatest revolution in how society and economics function since the Industrial Revolution, at the least. At the most, since agriculture. How painful that change will be will depend in large part on how quickly society adapts and implements policy changes to mitigate the negative effects.
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Re: Finland's UBI experiment

Post by ray245 » 2018-05-01 08:40pm

The Romulan Republic wrote:
2018-05-01 04:15pm

Yeah, that's part of.

It won't be easy to break free of this mindset, but in my view it has to happen. The rise in automation will likely lead to the greatest revolution in how society and economics function since the Industrial Revolution, at the least. At the most, since agriculture. How painful that change will be will depend in large part on how quickly society adapts and implements policy changes to mitigate the negative effects.
The problem is who is going to the people that would be redefining how to measure the self-worth of a person?
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Re: Finland's UBI experiment

Post by White Haven » 2018-05-01 08:51pm

I'm...trying to parse that sentence, Ray, and failing. ...What?
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Re: Finland's UBI experiment

Post by The Romulan Republic » 2018-05-01 09:00pm

ray245 wrote:
2018-05-01 08:40pm
The Romulan Republic wrote:
2018-05-01 04:15pm

Yeah, that's part of.

It won't be easy to break free of this mindset, but in my view it has to happen. The rise in automation will likely lead to the greatest revolution in how society and economics function since the Industrial Revolution, at the least. At the most, since agriculture. How painful that change will be will depend in large part on how quickly society adapts and implements policy changes to mitigate the negative effects.
The problem is who is going to the people that would be redefining how to measure the self-worth of a person?
I'd say that that's something people will have to define for themselves, even if it comes off as a non-answer. Other models do exist, of course, besides the "Protestant work ethic" or accumulating wealth, and countries that are less dominated by those attitudes than the US will likely fair better.
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Re: Finland's UBI experiment

Post by ray245 » 2018-05-01 09:02pm

White Haven wrote:
2018-05-01 08:51pm
I'm...trying to parse that sentence, Ray, and failing. ...What?
Sorry brain fart moment. I mean who are the people responsible for changing the way we value an individual's self-worth.
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Re: Finland's UBI experiment

Post by His Divine Shadow » 2018-05-02 08:50am

Finland might have quit the limited UBI experiment.

But we'll keep on subsidizing businesses to the tune of 4-7 billion per year. IIRC we gave Antti Herlin, one of the richest people in the country 400,000€ this year in subsidies to his personal farm. So I would say Finland has a sort of UBI and has had it for quite some time. It's just that it's for the already wealthy.

Much like in todays world, the rich get that sweet sweet socialism, we get capitalism (up our arses).
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Re: Finland's UBI experiment

Post by Simon_Jester » 2018-05-03 08:17am

Vendetta wrote:
2018-05-01 05:16am
mr friendly guy wrote:
2018-05-01 03:50am
Three, this eventually reaches a limit, for example Japanese works waaay longer hours but the difference in productivity compared to say the West, is minimal if at all.
Technically it's the US you should be looking at for long hours of lower productivity. Average US worker does a few more hours than the average Japanese worker, with just as strong a culture of presenteeism, and GDP per hour worked in the US is lower than Japan.

Japan about rides the OECD average for hours worked and GDP per hour.
Huh. That's an interesting change of pace.

It wasn't that long ago that we heard a great deal about Japanese salarymen working ridiculous hours at low productivity and sleeping in tubes at the workplace and so on. I'm pretty sure those statements were true at the time, if not necessarily universal. What changed?

On the American side, well, I'm guessing we're just seeing more and more people working two jobs, working jobs that grind them to hell and in which they are unproductive, or working very long hours because their bosses have more coercive power than in previous generations.
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Re: Finland's UBI experiment

Post by Vendetta » 2018-05-03 09:32am

Simon_Jester wrote:
2018-05-03 08:17am
Vendetta wrote:
2018-05-01 05:16am
mr friendly guy wrote:
2018-05-01 03:50am
Three, this eventually reaches a limit, for example Japanese works waaay longer hours but the difference in productivity compared to say the West, is minimal if at all.
Technically it's the US you should be looking at for long hours of lower productivity. Average US worker does a few more hours than the average Japanese worker, with just as strong a culture of presenteeism, and GDP per hour worked in the US is lower than Japan.

Japan about rides the OECD average for hours worked and GDP per hour.
Huh. That's an interesting change of pace.

It wasn't that long ago that we heard a great deal about Japanese salarymen working ridiculous hours at low productivity and sleeping in tubes at the workplace and so on. I'm pretty sure those statements were true at the time, if not necessarily universal. What changed?

On the American side, well, I'm guessing we're just seeing more and more people working two jobs, working jobs that grind them to hell and in which they are unproductive, or working very long hours because their bosses have more coercive power than in previous generations.
I'm not sure much changed in Japan.

It is very likely to be more US workers doing longer hours and holding multiple low paid jobs.

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Re: Finland's UBI experiment

Post by Ace Pace » 2018-05-03 11:11am

His Divine Shadow wrote:
2018-05-02 08:50am
Finland might have quit the limited UBI experiment.

Uh, they didn't quit. They're running the experiment till it's done...
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Re: Finland's UBI experiment

Post by His Divine Shadow » 2018-05-03 11:29am

As far as I am concerned, thats what I said. They quit it (because it was done).
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Re: Finland's UBI experiment

Post by Ace Pace » 2018-05-03 01:30pm

His Divine Shadow wrote:
2018-05-03 11:29am
As far as I am concerned, thats what I said. They quit it (because it was done).
Says nothing about a future expansion of the trial or any rollout. Attacking them for finishing an experiment is ludicrous.
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Re: Finland's UBI experiment

Post by His Divine Shadow » 2018-05-03 01:34pm

Right well since I didn't do anything like that everything is peachy then.
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Re: Finland's UBI experiment

Post by Dominus Atheos » 2018-05-04 12:10am

In english the word "quit" almost always has negative connotations, like "stopping something ongoing (without completing)". Use a different word, like "end".

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Re: Finland's UBI experiment

Post by mr friendly guy » 2018-05-04 12:37am

Funny thing is the trial hasn't ended yet. It started in january 2017 and is supposed to run for 2 years. We aren't even in the middle of 2018. It hasn't ended, nor has the Finnish government quit the trial. It might not institute UBI, but that depends on the trial result. Like I said before, I am dubious abut this working, but its literally too early to crow about its failure.

https://www.economist.com/news/finance- ... g-finlands
And the trial is not ending because of failure. Indeed, Kela has refused to publish any results until it is finished, for privacy reasons and to avoid biasing outcomes. The government simply has other priorities. In particular, it has decided to adopt Danish-style active labour-market policies.

More important, the UBI trial was always as much about the principle of policy experimentation as it was about the outcome. As Heikki Hiilamo of Helsinki University points out, Finland has tested policies before, such as a “full employment” trial which sought to provide a salaried job for every unemployed person in the small town of Paltamo. And the country is still keen on novelty. After the UBI trial, the government is planning to test a universal credit system.
In context, this appears to be one of many experiments the Finnish government likes trialling. Good for them. Whether it works or not, it helps improve human knowledge on these matters and helps other governments in deciding whether these strategies will work for their society.
Never apologise for being a geek, because they won't apologise to you for being an arsehole. John Barrowman - 22 June 2014 Perth Supernova.

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Australia, Canada, China, Denmark, Ecuador, Finland, Germany, Malaysia, Netherlands, Norway, Singapore, Sweden, USA.
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