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Surviving International Isolation: Israeli SMBs · Match B2B Insights

• 0:00
  Music.
• 0:26
  Welcome, everyone, to another episode of Match B2B Insights.
• 0:32
  I'm Brenda, and as usual, I've got Benny Fluman here with me.
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  Today, we want to unpack how the isolation facing Israeli companies is no longer just talk.
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  It's becoming a lived reality in international business, law, and reputation.
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  Benny, you and I have both seen this story changing, right?
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  Absolutely, Brenda. Look, it's not just bad press anymore.
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  You've got diplomatic ties being downgraded, sanctions on the table,
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  global boycotts that are no longer whispers but real decisions, the intensity, wow.
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  Israeli firms, even those far from politics, now feel that any conversation
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  abroad, be it with customers, partners,
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  even academics, includes implicit questions about trust and risk.
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  And you, coming from the U.S., you started hearing objections differently,
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  yeah? Yes, that shift is real.
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  Clients who never used to raise these issues, their legal teams now bring up
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  topics like potential export limitations, or they suddenly want to double-check
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  compliance on every little thing.
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  You see it play out mid-negotiation.
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  A deal's moving forward, then someone brings up reputational risk.
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  And suddenly, everyone's pausing.
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  It's not about the tech or the contract anymore. It's about this global narrative.
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  There's just this new kind of hesitancy that's, honestly, hard to puncture.
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  And the sources confirm, this isolation
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  runs deeper than anything Israel experienced in previous conflicts.
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  Yeah, we're not dealing with a passing wave. Allies pull ambassadors,
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  consumer boycotts grow, and big academic events just quietly leave Israel off the invitation list.
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  The impact is everywhere, from the headlines to the boardroom.
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  And that brings us to the legal front, which is especially tense right now.
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  For example, there are these campaigns, like the one led by ECCHR,
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  where, together with Palestinian partners, they're actively filing lawsuits
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  to halt arms exports from Germany to Israel. This isn't just symbolic.
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  These are real proceedings, with claimants in Gaza saying German weapons are
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  used in violations of international law. We're talking about court cases,
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  injunction requests, and even references to the ICC's move for arrest warrants for Israeli leaders.
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  The whole landscape is hotter and more complex.
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  Absolutely. And the German system makes things even more complicated.
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  They have this dual-track framework. War weapons, like anti-tank missiles or
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  bombs, have to go through the War Weapons Control Act, and the decisions get
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  reviewed at Berlin's administrative court.
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  Other military equipment, think tank engines, subsystems, or technology licenses,
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  are managed as regular trade, but go to Frankfurt's administrative court for challenges.
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  So you end up with two separate pipelines for legal action.
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  Which, just from a business point of view, can cause a lot of anxiety.
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  I had a client, he's in defense tech, really sharp guy, who caught wind of the
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  whole issue about Germany stopping some export licenses.
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  He starts asking if his company's next shipment will be flagged,
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  or if the bank's going to freeze the payment.
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  The rumor mill in the European business circles goes nuts.
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  And let's be honest, half the time it's the perception itself that does the damage.
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  And the cases themselves show just how tricky and fast-moving all this is.
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  Some requests were rejected in court because shipments happened before the claimants could even act.
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  Others were thrown out because the claimants lacked legal standing.
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  The only constant is uncertainty. Let's talk about what this means for company operations.
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  Continuity has become a survival skill, especially when global buyers might
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  see Israeli companies as high-risk vendors.
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  It's not just about having a backup plan. It's about having really clear, documented processes.
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  Mirrored teams, regulatory checklists, auditable records, and having proof points
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  rather than just promises is what matters.
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  Remember the Toyota story, Benny? Toyota, yeah? After the 2011 earthquake.
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  Classic case. They mapped their entire supply chain, put in redundant triggers,
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  and after that, even when the Thai floods hit, they got back on their feet faster
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  than the competition because they made continuity visible.
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  And it's not just them. You look at local heroes, too.
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  Wix, Fiverr. In their own way, they kept recruitment open and kept communicating
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  outward, even when everything was chaos.
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  That's discipline. That's what global buyers need to see now.
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  Not slogans, but proof the machine keeps running. And clients notice those signals.
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  If you can show your hiring, shipping, updating regularly or running cross-border
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  webinars, it's practical reassurance at a time when the risk label can stick so fast.
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  In these conditions, resilience is very much an earned thing. No shortcuts.
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  So how do contracts help keep those relationships alive under scrutiny?
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  There's a big push now to strengthen force majeure and hardship clauses,
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  not just the legalese, but making them actually useful.
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  Like, do you define what events truly disrupt operations?
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  Do you require both sides to prove real objective harm before suspending work?
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  And do you bake in a cooling-off period so no one hits the panic button on day one? Exactly.
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  Another powerful tactic? Multi-jurisdictional contracting.
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  If you've got an EU or US entity, you can route contracts and billing through
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  there, while still keeping your core team in Israel.
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  And compliance certifications, ISO, SOC2, whatever your space demands,
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  they can tip the risk conversation back in your favor, because procurement teams
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  rely on those international standards.
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  Ukrainian dev shops did this well after 2022.
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  They set up EU-facing companies to meet procurement rules, Not for PR,
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  but so they could keep delivering.
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  It's not rocket science, but it's so often missed.
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  You contract in ways that create evidence, not just intent.
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  That's what gets you through tough reviews or skeptical clients.
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  Let's go a level deeper on trust, and really, perception.
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  Weekly customer updates, dashboards, radical transparency.
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  These aren't just checkboxes. They address practical fears. I had a U.S.
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  Client who almost pulled out until we gave them a steady feed of measurable
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  KPIs and shipping milestones.
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  What you say externally matters a ton, but how you act and what you deliver matters even more.
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  Benny, you've got an example, right? Yeah, I had this European distributor.
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  Super stressed by the news, steam was grouchy, email noise non-stop.
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  Instead of trying to wave the Israeli flag or argue, we got real.
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  Honest updates Admitted what was delayed Made a couple of jokes about Murphy's
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  Law and Logistics Which, you know, helps break the ice,
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  After two or three weeks of this kind of no-slogan-zone communication,
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  not only did the distributors stick with us, they started sending the updates
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  up the chain as proof to their board.
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  Sincerity plus a little humor goes a long way. And that's the difference.
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  Stability shows through invisible milestones and real teams,
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  not just big promises or slogans.
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  It's the only antidote to the gloom in the headlines, but none of this holds
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  if you can't keep your own team running.
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  Under these conditions, Israeli SMBs are constantly on the edge with reserve
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  duties, staff burnout, or even just morale collapsing after another tough news cycle.
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  That's where things like mental health support, hybrid work policies,
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  and very open internal messaging play a real role.
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  Not just soft stuff. Retention rates prove it.
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  Body systems show up too. I keep hearing from my network, reservists helping
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  each other's families, businesses covering shifts for each other.
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  They become informal safety nets.
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  Remember what happened in the Philippines after typhoons? Or Ukraine with the war?
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  Companies forced to adapt HR policies overnight. Same playbook for Israeli SMBs now. Stay flexible.
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  Care about your people. And put it all out in the open.
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  People can sense insecurity a mile away.
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  When you show them you're holding the line together, loyalty goes way up.
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  And then, of course, there's outside support.
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  Let's not forget Israeli and international programs, the Smart Money Fund,
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  binational R&D programs like BIRD or SEARD, even crisis-specific grants.
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  These don't replace great management, but they do de-risk expansion,
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  especially for exporting tech or growing R&D abroad.
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  The data is, well, mixed.
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  While some EU and U.S. contracts are canceled, other big deals go ahead.
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  Google's $32 billion deal for Wiz, NVIDIA's campus, continued high-defense and high-tech exports.
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  Brenda, I love quick wins For any Israeli SMB Right now Review your contract
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  clauses for stress points Publish a two-page business continuity brief.
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  Diversify where revenue and support comes from And make sure you've got ongoing
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  customer touchpoints Even if it's just a short milestone update Or a Q&A webinar.
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  These aren't magic bullets, but they buy you time and trust.
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  One area I think gets missed a lot, building unconventional partnerships.
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  Don't just go to old allies. Look to regional players, cross-sector consortia,
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  or global civil organizations for new markets and networks.
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  Digital platforms, virtual trade shows, co-branded pilots, they bypass a lot
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  of the diplomatic gridlock.
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  The key is, the more you spread connections, the harder it is for any single hit to take you down.
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  Absolutely. And those joint initiatives,
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  partnerships, or even temporary consortia do more than add sales.
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  They become reputation lifelines.
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  When you tie your brand to innovation and reliability through real collaboration, people remember.
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  It's not just about who you know. It's about who's willing to go public with
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  you when things get tricky. So what's next when the pressure never really goes away?
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  Innovation isn't just a buzzword. It's how companies in crisis move forward.
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  Digital transformation can make remote work, sales, and supply resilience stronger than ever.
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  Crisis marketing means you highlight real actions, real flexibility,
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  and actual community support, not wishful thinking.
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  And strategic diversification? That's a must.
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  If one region goes cold, you've got to have others warming up.
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  Think of it like a chess game, not a sprint. Build out new revenue streams.
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  Invest in tools that make remote collaboration seamless. And always,
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  always be upfront about what's working and what's not.
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  You can't control the global headlines, but you can control your own discipline,
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  your own innovation, and your company's track record.
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  Resilience is really the sum of those boring, daily things you keep doing,
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  even when everything feels like it's on fire.
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  Couldn't agree more. And on that note, we'll wrap for today.
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  This landscape is changing all the time, and so will our playbook.
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  Thanks as always, Benny. This was a big one.
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  Thank you, Brenda. Always a good fight. And thanks to our listeners for sticking
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  with us. Same time next episode? You bet, Benny.
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  Until next time, everyone. Stay global, stay resilient, and take care.
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  Music.