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Vietnam-US Trade Relations: Evolving Complementarities

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Vietnam- US relations has wittnessed significant developments especially in the areas of economics and trade after 25 years of normalization of Vietnam-US diplomatic ties (1995-2020). Compared with Vietnam’s diplomatic relations with other powers, the Vietnam-US relationship is still quite new and has its own specifics. Due to differences in ideology, disparities in economics, and conflicting strategic goals, this relationship is always interwoven between cooperation and struggle. In the spirit of“Understanding the past, cherishing the present and looking forward to the future”,the leaders of both sides have tried to overcome the differences, uphold the commons and create the favorable conditions for developing the relationship between two countries. Nowadays,the Vietnam – US comprehensive partnership is strongly developedon many fields,in which economic and trade is one of the most successful fields the bilateral cooperationand has achieved many new developments after 25 years, still considered the brightest point and becoming and driving forceVietnam – US overall relationship.

The international and domestic context has great impacts on the Vietnam – USrelations today. The world situation is changing more complicatedly and unpredictably which entails both oppotunitiesand challenges. Fierce strategic competition among major powers is increasing, especially in Asia-Pacific region; the situation of the East Sea (also known as the South China Sea), is complicated, posing a threat peace, stability, security in the region as well as the sovereignty and territorial integrity of the countries. Vietnam is in the process of developing, accelerating industrialization and modernization, so Vietnam needs a peaceful and stable environment, mobilizing capital resources, technology, knowledge and international supports to develop and defend the country. In this context, the two countries will try to make more efforts to promote relationship to the new height. On the one hand, to ensure the national interests of each country, on the other hand to together contribute to building regional security, creating a stable environment, cooperation and development in the future.Therefore, after 25 years of normalization of relations (1995-2020), the two countries have not stopped their efforts to improve the Vietnam-USrelationship on all aspects, in which the economic and trade sector has been playing the most important role and has made breakthrough growth as follow:

– Many important trade agreements and commitments have been signed to promote the Vietnam–US trade relationship such as: “Bilateral Trade Agreement” (BTA) in July 2000 and has officially taken effectsince march 26, 2001. This is an extremely important agreement because it has been creating a solid foundation for further promoting Vietnam–US trade relations by establishing a clear legal framework to ensure benefits for both sides. The Textile Agreement (effectivein 2003), the Aviation Agreement (effective january 2004), etc. In particular, in november 2006, Vietnam officially joined the WTO and the same year, the US government announced to grant Vietnam “Permanent normal trade relations” (PNTR). A major step in investment cooperation was the signing ceremony of the “Trade and Investment Framework Agreement” (TIFA)between Vietnam and the US on June 21, 2007. TIFA has created a foundation for the two countries for developing deeper trade and investment relations through the WTO and the BTA, and to resolve bilateral trade disputes, especially to implement commitments on the protection of intellectual property rights, expanding service market, administrative and legal transparency, thereby creating more favorable conditions for the US investors in Vietnam.

– With many trade agreements continuously signed as above, the US  Foreign Direct Investment (FDI) inflows into Vietnam has also increased continuously and is considered leading investors. According to the statistics of the Ministry of Planning and Investment of Vietnam, by the end of 2019, theUS ranked 11th among 130 countries and territories investing directly into Vietnam, with nearly 1,000 direct investment projects in Vietnam and the total registered capital is nearly 10 billion USD.The US has also kept Official Development Assistance (ODA) for Vietnam at a stable level of over 100 million USD/year. The USis also an investment destination for Vietnam’s businesses. In the first 5 months of 2020, this country’s ranks the second in Vietnam’s overseas investment capital, with 21.72 million USD, accounting for nearly 12%.

According to US Congressional Research Service, this year marks the 25th anniversary of the United States and Vietnam reestablishing diplomatic relations. Over the last 25 years, U.S.-Vietnam economic and trade relations have expanded rapidly. The United States was Vietnam’s 2nd largest trading partner in 2019; Vietnam was the United States’ 13th largest trading partner. Bilateral trade increased by nearly 32% in 2019, and the U.S. trade deficit with Vietnam rose to nearly $56 billion, an increase of 42% over 2018.Two-way trade turnover between Vietnam and US increased nearly 120 times from 451 million USD (1995) to 7.8 billion USD (2005), 45.1 billion USD (2015), 47.15 billion USD (2016), 50.8 billion USD (2017) and 60.3 billion USD (2018). Only in 2017, the value of Vietnamese goods exported to US accounted for more than 20% of the share of Vietnam’s exports to foreign countries. Vietnam is also the largest export market of USin Southeast Asia with rapid growth. Bilateral trade turnover in 2019 reached 77.5 billion USD. The US Business Association in Vietnam (AmChams) predicted that the two countries’ trade turnover could reach $ 80 billion by 2020.

According to statistics of Vietnam’s General Department of Customs,in the first 5 months of 2020, although the two countries have been hit hard by the covid -19 pandemic, Vietnam’s trade exchang in goods with US reached 31.11 billion USD, in which Vietnam exported toUSthe amount of goods worth 25.11 billion USD, up 10.6% over the same period last year. The main products exported from Vietnam to US market are textiles and garments; phones and accessories; computers, electronic products & components…. footwears, wooden, with a turnover of each item from $ 1 billion or more. On the contrary, US exported to Vietnam worth 6 billion USD, up 5.4% over the same period last year. The largest group of imported goods with a turnover of “billion USD” from the US market in the first quarter were computers, electronic products and components with a turnover of $ 1.92 billion, up 8.2% over the same period last year. Many American products have been continuing to grow in exports to Vietnam such as wood and wood products, animal feed and raw materials, seafood, vegetables and fruits… In the field of agricultural products, US has been exporting surplus to Vietnam such as corn, soybeans, meat, milk and fruits, with a value of about 400 million USD/year.

– In another economic and trade fields, science – technology and tourism over the years are most remarkable. …. Regarding science – technology cooperation, American and Vietnamese businesses are particularly interested in cooperation on artificial intelligence, creative start-ups, renewable energy, and infrastructure development of information technology and high quality human resource training. In term of  Tourism: in 2019, the American Tourism Association voted Vietnam as one of the 10 most attractive destinations in the world. The number of American visitors to Vietnam has increased steadily every year. The US visitor market continuously ranks in the top 5 source markets in terms of the number of visitors to Vietnam, the average growth rate in the period 2014-2018 was 11.55%. In january 2020, the number of international visitors to Vietnam from America reached 96,500 arrivals, up 19.7%. For the US tourists, Vietnam is a safe, friendly destinations where is capable of holding important international political events, notably the US-North Korea Summit was successfully held in Vietnam in February 2019 attracted worldwide attention. In Vietnam, there are a lot of  large American hotel management groups such as Hilton, Wyndham, JW Marriott, Best Western International, Starwood, Hyatt.

Besides the achievements, Vietnam is still facing challenges in economic and trade cooperation due to the rise of protectionism in the US. The fact that the UShas not yet recognized Vietnam as a market economy that has caused many products of Vietnam to be entangled in anti-dumping lawsuits, pressured and unable to penetrate deeper into America’s market, typically are aquatic products (shrimp, Tra fishes, catfish…), textile and garment products, leather and footwear that are the key products of Vietnam to export to foreign countries. In addition, Vietnam also often faces strict technical barriers to standards when exporting to US, mainly due to the large disparities in economics as well as science – technology potential between the two nations.

In general, the Vietnam –US strategic partnership has achieved remarkable achievements over the past 25 years (1995-2020). The bilateral relationship between Vietnam and the United States has achieved such remarkable achievements thanks to the efforts of the two governments on the foundation of the two countries’ perception of the new era of democratic and public equal values, of mutual understanding and sharing economic and spiritual benefits; of each side’s strengths in global geopolitical relations and the nation’s contribution to peace and prosperity as well as inter-state interdependence in response to global problems. Therefore, the values ​​that the two countries have built in the past 25 years are extremely large and sustainable, and therefore need to be considered as the foundation to create new values ​​in the future of Vietnam – US strategic partnership.

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Impact of Multinational companies on Pakistan

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Multinational companies (MNCs) have had a significant impact on Pakistan’s economy since the country’s liberalization and opening up to foreign investment in the 1990s. Overall, the impact of MNCs on Pakistan can be seen as mixed, with both positive and negative effects on the economy and society.

Multinational companies (MNCs) are firms that operate in multiple countries, including Pakistan, and are usually headquartered in developed countries. They have the capability to invest large amounts of capital, technology, and expertise, which can significantly impact the host country’s economy. MNCs, bring foreign direct investment (FDI) to Pakistan, which is essential for economic growth.

The presence of MNCs in Pakistan has had a positive impact on the economy in various ways. They have contributed to the development of infrastructure, which has helped to improve the country’s business environment. MNCs have also helped to increase exports, which has led to an increase in foreign exchange reserves. Additionally, they have introduced modern technologies and practices, which have enhanced productivity and efficiency in the local industries.

One of the significant impacts of MNCs on the Pakistani economy is their contribution to employment generation. MNCs have created jobs for the local population, which has helped to reduce unemployment and poverty. According to the State Bank of Pakistan, the number of people employed in the manufacturing sector, where most MNCs operate, has increased by 2.8% in the fiscal year 2020-21. This growth can be attributed to the expansion of MNCs in the country.

The presence of MNCs in Pakistan has also led to the transfer of skills and knowledge to the local workforce. MNCs employ highly skilled professionals who share their knowledge and expertise with local employees. This transfer of skills and knowledge helps to enhance the human capital of the country, which is essential for economic growth.

Furthermore, MNCs have a significant impact on the tax revenue of Pakistan. MNCs pay corporate taxes, which contribute to the government’s revenue. According to the Federal Board of Revenue, the contribution of MNCs to the country’s tax revenue has increased by 19.9% in the fiscal year 2020-21. This increased tax revenue can be attributed to the expansion of MNCs in the country.

 MNCs have negative impacts on the environment and may exploit natural resources. The entry of MNCs into the Pakistani market has increased competition for local firms, making it difficult for them to compete with well-established global brands

MNCs have been accused of exploiting labor and natural resources in Pakistan. There have been reports of low wages, poor working conditions, and environmental damage associated with MNC operations in the country.

The current situation of multinational companies (MNCs) in Pakistan is mixed. On one hand, Pakistan has been successful in attracting foreign investment in recent years, with MNCs investing in various sectors of the economy such as telecommunications, energy, and infrastructure. On the other hand, Pakistan still faces a number of challenges that can impact the operations and growth of MNCs.

One of the major challenges faced by MNCs in Pakistan is the weak and uncertain regulatory environment. The country’s legal and regulatory framework is often viewed as complex and difficult to navigate, which can make it difficult for MNCs to operate and make long-term investments. In addition, corruption and lack of transparency in the regulatory environment can increase the cost of doing business and reduce investor confidence.

Another challenge is the inadequate infrastructure in Pakistan, which can make it difficult for MNCs to operate efficiently.

Furthermore, Pakistan has faced security challenges that can impact the operations and growth of MNCs. Terrorism, political instability, and sectarian violence can increase the risk of doing business in the country and deter foreign investment.

Despite these challenges, there are opportunities for MNCs in Pakistan, particularly in sectors such as agriculture, healthcare, and tourism. The country has a large and growing population, a strategic location, and abundant natural resources, which can make it an attractive destination for foreign investment.

The impact of multinational companies (MNCs) on the thinking of people in Pakistan can be both positive and negative, depending on various factors such as the nature of the company’s operations, its business practices, and the local cultural and social context.

On the positive side, MNCs can bring new ideas and practices to Pakistan and can help to expose people to different ways of thinking and doing business. They can also bring job opportunities and skills development to local communities, which can have a positive impact on the local economy and people’s quality of life.

Moreover, MNCs can help to promote cultural exchange and understanding between Pakistan and other countries. For instance, MNCs may bring in employees from different parts of the world, exposing local employees to different cultures and perspectives. This can lead to increased tolerance and diversity in society.

On the negative side, MNCs may lead to negative consequences for local communities and the environment. MNCs may contribute to the marginalization of local businesses and industries, leading to the loss of local cultural and economic practices. This can have a negative impact on people’s sense of identity and belonging.

The impact of MNCs on the thinking of people in Pakistan is complex and multifaceted. While they can bring new ideas and opportunities, they can also have negative consequences for local culture and values. It is important for MNCs to be aware of these potential impacts and to operate in a socially responsible and culturally sensitive manner, in order to promote positive outcomes for both the company and the local community.

In conclusion, the current situation of MNCs in Pakistan is mixed. While there are challenges such as a weak regulatory environment, inadequate infrastructure, and security concerns, there are also opportunities for foreign investment in various sectors of the economy. It is important for Pakistan to continue to address these challenges and create a more investor-friendly environment to attract further foreign investment and promote economic growth.

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How Saudiconomy, is an economic-transformational miracle?

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Saudi Cabinet session. image Source: Saudi Press Agency

What is happening in the Global economy? The outlook seems entirely iffy, in the state of flux and bewildered with negative outlooks. The answer is, “Disturbance”. If we analyze the global-environment with respect to economy, we find it clouded with discussions pertaining to hawkish vs. dovish trends of central-banks, rising inflation, hyper-inflation, tanking GDP growth, Russian-Ukraine conflict, energy-crises, broken supply-chains, unemployment, recession-fears, supply-shocks, lower demands, inverted yield-curves, liquidity crises, banking debacles and many other ensuing economic-ramifications etc. all have become talk of corridors and towns.

In my opinion, the global economy seems in shambles, extrapolated perceptions assumed by analysts out of Jackson Hole meetings and other developed-countries’ central-banks are creating disturbances in financial-markets. Simply, the world is devoid of any solid vision, which could steer it towards betterment and prosperity. Major financial newspapers are dreading with inflation impacts. Ask any banker across the globe about his or her medium-term economic-outlook & you’ll get an ugly picture painted.

Welcome to Saudi Arabia, the year 2022 the country surpassed a mark of a trillion-dollar economy according to both IMF and Oxford Economics coupled with GDP which grew at 8.7% in 2022. The annual CPI in Saudi Arabia  increased by 2.5% and inflation averaged at 2.47% in 2022 which is “absolutely nothing” against double-digits’ inflation worldwide.

So paradoxically asking, what is happening in Saudi Economy? The answer is, “Growth”. If we analyze Saudi economic ecosystem, we find it filled with positive economic-vibes where the discussion is all about hike in industrial-production, foreign-investment-inflows especially huge industrial-investments, mining-investments which aim to unleash the potential of natural-resources, infrastructure-investments, giga-projects, achievement of economic & financial targets on time, flourishing private-sector, multiplying Non-Oil GDP etc.

Taking global-view, H1+H2 of 2022 were clouded with immense geo-political tensions, with ultimate economic-ramifications. But KSA has remained insulated of all global economic-vagaries, which attests the resilience & robustness of Saudi economic framework which is strengthened by Saudi leadership. The fiscal-year 2022 attracted significant foreign capital-inflows, which proves that Saudi Arabia has successfully positioned itself as a desired-destination of global financial-capital amid the ongoing global-turbulence. Saudi Arabia has successfully averted economic-effects of current geo-political turmoil, in terms of utilities, food-security and inflation-containment etc.

The question arises, how did KSA achieve this economic excellence & resilience in really a short time-span? The answer is, a Vision is being implemented and realized by Saudi leadership with sheer commitment and enabled by Saudi youth. This trifecta is indeed a global successful case-study of how major economic-transformations can happen in a short-period of time.

Delving into more details, the fundamental reason is, in 2016 Saudi Arabia had devised a brilliant Vision 2030 under the leadership of H.R.H King Salman and this was a road-map drawn by H.R.H Crown Prince Mohammad Bin Salman, as a forward strategic-economic framework. Under this brilliant vision, uniquely-crafted “Vision Realization Programs” (VRP) were designed, each tasked with a particular niche to smoothen the regulatory-processes, incentivize deployment of local-resources and ultimately attract private-sector & foreign-investments. All these VRPs are showing satisfactory-progress and many of these VRPs have over-achieved brilliantly.

Another driver of this economic-success is a significant-emphasis on optimizing potential of “Non-Oil GDP”. It is the Non-Oil GDP, which ultimately provided an impetus and incentivized Saudi Private-sector to act proactively. The fuel for sky-rocketing “Non-Oil GDP” is actually the giant private-sector of KSA, whose potential is being unleashed by Saudi government via launching a partnership-program namely “Shareek” which aims to intensify the potential of SAR 5 trillion of domestic private sector investments by 2030. The aim is to maximize the private-sector contribution up to 65% in Saudi GDP by 2030.

One of the attributable reasons of this economic-miracle of Saudi Arabia has been a constant emphasis on Higher Education & Research. For instance, scholarship programs for Saudi students proved to be a stellar success. Today we see countless highly-qualified Saudis, possessing valuable global-experience are now steering many organizations in both the public and private sector of country. Their competence coupled with determination, passion & loyalty for their leadership and the country paved the way for Saudi Arabia to result such an economic-success. Nature Index which tracks scientific & intellectual contributions globally has ranked Saudi Arabia, 1st in Arab World & 30th globally in 2022, which manifests emergence of high quality scientific-output by Higher education ecosystem.

Saudi Arabia was one of the countries, which made headlines across global-media due to smart Covid-management, leaving behind many developed economies. For instance, King Abdullah Port has bragged the 1st-position leaving behind 370 global-ports in a globally-renowned index, Container Port Performance Index – 2021 by World Bank and S&P Market Intelligence, which analyzed performances of 370 ports in post-Covid broken supply-chain scenario. Similarly, Jeddah Islamic port and King Abdul Aziz port have bragged 8th and 14th position respectively.

Saudi Arabia’s Sovereign Wealth Fund, Public Investment Fund has emerged as one of the smartest-SWF leaving behind many decades-old SWFs with stellar investments. The PIF     (AuM = 620 USD billion) with its in-built strong potential has taken lead in investing locally in Saudi Arabia. In any country, a monetary-system always carries immense importance in proper functioning of an economy & solidifies its robustness. This important task is being carried out diligently by Saudi Central Bank, SAMA, which is brilliantly regulating Saudi financial-sector.

Saudi Arabia is taking a lead in developing state-of-the-art infrastructure. Each of the giga-project is adding gross-value of billions of SAR directly to economy and is providing thousands of jobs. I call them; “Super-infrastructure” because they are being developed with a super-vision, led by super-teams, giving super-results and yield a super-future. Recently Knight Frank which is a top-notch and a century-old UK-based real-estate consultancy firm has evaluated the 15 giga-projects up to 1.1 trillion dollars.

Indeed, Saudi success story of economic-transformation and diversification embodies sheer brilliance, commitment and determination, which has manifested wonders in less than a decade as appreciated by the Managing Director of IMF in the recent WEF sessions, in these words, “They (Saudis) are using the increase in revenue very effectively to create the investment environment for future growth for diversifying the economy,”

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Economic Strangulation Policies to Impact Kashmir Socio-Economic Dynamics

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For decades, India has implemented coercive economic policies in the estwhile state of Jammu and Kashmir, a region that has been the subject of a longstanding dispute between India and Pakistan since their partition in 1947. Despite ongoing efforts to suppress the aspirations of the Kashmiri people, including economic deprivation, one of the most significant examples of India’s economic coercion in the region has been the imposition of an economic blockade.

In 2019, the Indian government further intensified its efforts by revoking the special status of Jammu and Kashmir, which had granted the region autonomy to determine its economic policies. This move was accompanied by a curfew and communication blackout that effectively isolated the region from the outside world, further exacerbating the economic hardship faced by the people of Jammu and Kashmir.

The blockade has had a devastating impact on the economy of IIOJK. The region’s tourism industry, which was a major source of revenue, has been decimated. The Indian government has also seized control of the region’s industries, including its mineral and agricultural resources. The region’s apples, for example, are a major source of revenue, but Indian authorities have blocked their export to the rest of the country, causing huge losses to the farmers.

India has also used other economic measures to exert control over the region. For example, the Indian government has placed restrictions on the movement of goods and people across the Line of Control (LoC) that divides the region between India and Pakistan. This has made it difficult for businesses to import and export goods, as well as for people to visit their families and friends on the other side of the LoC.

In addition, the Indian government has used financial measures to suppress dissent in the region. Indian authorities have frozen the bank accounts of individuals suspected of involvement in anti-India activities. This has made it difficult for these individuals to access their own funds, as well as for others to conduct transactions with them.

India has also used its control over the region’s financial institutions to exert pressure on the Kashmiri people. For example, Indian authorities have pressured banks in the region to refuse loans to individuals suspected of anti-India activities. This has made it difficult for these individuals to start businesses or invest in their communities.

The application of economic strangulation policies in IIOJK is expected to have a substantial impact on the socio-economic dynamics of the region. These policies are aimed at restraining economic activity and growth, and they are likely to result in various harmful consequences for the people of Jammu and Kashmir.

The primary effect of these policies will be an increase in poverty and unemployment rates. As businesses struggle to function and create employment in an environment of economic uncertainty, a considerable number of people will find themselves out of work and grappling to make ends meet. This is likely to intensify the existing social and economic disparities in the region.

Another probable outcome of the economic strangulation policies is a decline in the living standards of the people. As economic activity slows down, prices of essential goods and services are likely to surge, making it difficult for individuals to obtain the basic necessities of life. This could potentially result in a surge in social unrest and political instability in the area.

Additionally, the economic strangulation policies may lead to a decrease in the overall standard of healthcare and education. As the government diverts resources away from these sectors to impose economic sanctions, hospitals and schools are likely to face reductions in funding and staffing, thereby leading to a deterioration in the quality of these essential public services.

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So far, the impact of India’s economic coercion on the people of IIOJK has been devastating. The region’s poverty rate is estimated to be around 30%, and unemployment is rampant. The lack of economic opportunities has led many young people to join freedom fighters, which have been fighting for Kashmiri independence from India for decades.

India’s economic coercion has also had a profound impact on the mental health of the Kashmiri people. The curfew and communications blackout imposed by India in 2019, for example, left many people feeling isolated and helpless. The lack of economic opportunities has also led to high levels of stress and anxiety among the region’s youth.

The international community has condemned India’s coercive policies in IIOJK but is not willing to pressurize India over human rights violations. The United Nations has called for a peaceful resolution of the Kashmir dispute, and has urged India to respect the human rights of the Kashmiri people. The Organization of Islamic Cooperation (OIC) has also expressed its concern over the situation in the region.

Pakistan has been vocal in its condemnation of India’s actions. The Pakistani government has called on the international community to intervene in the dispute, and has urged India to withdraw its military forces from the region.

One of the recent policies of economic strangulation in IIOJK by India is the implementation of new land laws in the region. In October 2020, the Indian government issued new land laws that allow non-residents to purchase land in the region. This decision has been met with widespread condemnation from Kashmiri political leaders, who argue that it will lead to demographic change and the loss of control over their land.

Kashmiri leaders from mainstream political parties have also rejected the decision of the Indian government to levy taxes in the region without representation. The slogan “No taxation without representation” has been used by these leaders to argue that the Indian government has no right to impose taxes on the people of the region without their consent.

The argument put forth by these leaders is that the Indian government has violated the basic principle of democracy, which is that the people have the right to elect their own representatives who can make decisions on their behalf. By imposing taxes without representation, the Indian government has effectively denied the people of IIOJK their democratic rights.

The Kashmiri political leaders have also argued that the Indian government’s decision to levy taxes without representation is a violation of international law. The International Covenant on Civil and Political Rights, which India is a signatory to, guarantees the right of all peoples to self-determination. The Kashmiri leaders argue that by imposing taxes without representation, the Indian government is denying the people of IIOJK their right to self-determination.

The Kashmiri leaders have also pointed out that the Indian government’s decision to impose taxes on the region without representation is a continuation of its policy of economic strangulation in IIOJK. They argue that the Indian government’s actions are designed to suppress the aspirations of the Kashmiri people and to maintain its control over the region.

Overall, the impact of the economic strangulation policies in IIOJK is likely to be extensive and severe, affecting not only the economic but also the social and political structure of the region. The people of Jammu and Kashmir are likely to face various challenges in the upcoming years as they strive to adjust to this new reality, highlighting the need for the international community to closely monitor the situation and take action to support those affected.

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