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Energy
Pemex: 1H Oil Exports Income Reaches Historic Record High; Oil Output Falls 9.7%
July 23, 2008
Pemex announced that revenue from crude oil exports during 1H amounted to a USD 24.7 billion historic record high, 52% higher than the like 2007 period and including a 15.4% drop in oil exports. Pemex also announced that oil output fell 9.7% compared to figures from 1H 2007, to an average 2.85 million barrels per day (B/D). Pemex said that the decline in production was due mainly to decreased output from the Cantarell field.
Pemex, Oil Workers Union Reach Wage, Benefits Agreements
July 23, 2008
Pemex said it has reached a wage deal with the oil workers union, agreeing to pay an additional 4.8% in wages and 1.9% in loans. Negotiations began July 8 with the union demanding 11% in wages and benefits. Pemex said the pay raise and the increase in loans to workers enters into effect on August 1. Approximately 100,000 of Pemex′s 140,000 employees are members of the national oil workers union.
PRI Submits Alternative Oil Sector Reform Proposal; Partially Supports Calderon
July 23, 2008
The opposition Institutional Revolutionary Party (PRI) announced that it left unchanged some of President Calderon′s oil sector bill′s main elements, such as increased autonomy for Pemex in setting budgets, selling debt, and contracting foreign firms for oil projects. The PRI has presented its own version of an alternative oil sector reform to lawmakers; its proposal rejects Calderon′s idea of opening oil refining, pipelines, and storage to the private sector.
Leftists Divided On Proposed Oil Sector Reform
July 24, 2008
An internal fight in the left-wing opposition Democratic Revolution Party (PRD) has been dividing its members on a series of issues, including blocking President Calderon′s oil sector reform proposal. Moderates in the party are working on their own version of a reform bill to lower taxes at Pemex and give it more budget autonomy. Meanwhile, former presidential candidate Andres Manuel Lopez Obrador (AMLO) has decided to go on the defensive with marches around the country to defend the status quo at Pemex. The PRD is currently the second-largest party in Congress.
Citizens From DF, Nine States Vote ″No″ In Referendum On Oil Reform
July 28, 2008
The left-wing opposition Democratic Revolution Party (PRD) organized a nonbinding referendum on President Calderon′s plan to allow private investment in the state-run oil sector. The PRD said Mexico City (DF) residents voted against the President′s proposal; more than 80% of those who voted oppose it. Results in areas of 9 of the countrY′s 31 states that participated in the vote, and which are governed by the PRD, indicated the same trend. The PRD said turnout was lower than anticipated. with about 800,000 DF residents participating. The vote does not directly affect the bill in Congress.
Pemex Seeks Exploration Services For Burgos Basin
July 24, 2008
Pemex has opened a tender for exploratory drilling services in the natural gas-rich Burgos Basin. The contract involves geologic services for exploration wells and well design, with works begining in October. Natural gas production hit a record 7 billion cubic feet a day in June, giving Pemex a welcome success story as crude oil production has fallen by around 10% compared with a year ago.
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Trade & Investment
Mexico Posts USD 273 Million Trade Surplus In June
July 23, 2008
The government has announced that Mexico posted a USD 273 million trade surplus in June, driven by a sharp rise in oil-related exports. Total exports rose 16% from a year earlier to USD 26.409 billion, with oil-related exports up 58.9%. Non-oil exports were up 8.2%. Imports in June were USD 26.136 billion, up 10.8% over the same month in 2007. Exports of oil, which has been at record high prices, account for approximately one-third of the government′s revenues.
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Banking, Insurance & Finance
AXA Acquires ING Seguros De Mexico For USD 1.5 Billion
July 23, 2008
Dutch bank ING has announced the completion of the sale of its Mexican insurance subsidiary ING Seguros de Mexico to French insurer AXA for USD 1.5 billion. The transaction, which was announced in February, includes auto, life, and health insurance divisions, among other services. ING is the third-largest insurer in Mexico; it has a 12% market share in the country and 5.5 million clients. Meanwhile, AXA announced it plans to focus on providing microinsurance as its main product.
Banco Santander, Telecomm-Telegrafos Sign Cooperation Agreement
July 23, 2008
The Communications and Transport Ministry (SCT) has announced that Spanish bank Santander and the government′s telegraph and communications company Telecomunicaciones de Mexico (Telecomm-Telegrafos) have signed an agreement to provide banking and financial services to less favored people in cities and to people in rural locations by using Telecomm-Telegrafos′ infrastructure in 1,074 municipalities throughout the country.
Mexico′s Country Risk Down To 171 Points
July 22, 2008
According to J.P. Morgan, Mexico′s country risk dropped to 171 points, down from 180 at the beginning of July. Figures from the Finance and Public Credit Ministry (SHCP) show that Brazil′s and Argentina′s country risks dropped by 15 and 59 points to 226 and 599 points, respectively, remaining significantly higher than in Mexico.
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Business & Industry
Gruma 2Q Net Profit Up 56% To MXN 689 Million
July 23, 2008
Mexican tortilla maker Gruma reported a 56% rise in 2Q net profit to MXN 689 million due to higher prices for its products. Monterrey-based Gruma, which generates most of its revenue outside of Mexico, said 2Q 2008 sales rose 13% from the 2Q 2007 to MXN 10.06 billion. EBITDA grew 64% to MXN 1.09 billion, while operating profit doubled to MXN 777 million.
Vitro To Buy Stake In Cristalglass
July 22, 2008
Mexican glassmaker Vitro said that investors holding 40% of its unit Vitro Cristalglass plan to exercise their option to sell the stake to Vitro. Monterrey-based Vitro said it is analyzing its options to comply with its obligation, which requires it to buy the estimated EUR 31 million stake by September. Vitro Cristalglass, part of Vitro′s flat-glass division, has operations in Portugal and Spain, and has a presence in France.
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Automotive
Chrysler Stops The Production Of Five Mexican Plants
July 22, 2008
U.S. automaker Chrysler motors has announced that it will stop operations at five Mexico plants for two weeks, starting on July 14 and July 21. Chrysler executives in Mexico said these technical stoppages are needed to make changes for coming models, maintenance and change of tools, as well as for adjustments in production volumes. No further information was provided on how the measure will affect workers or production.
Zhongxing Auto Delays USD 300 Million Mexican Plant
July 23, 2008
Chinese automaker Hebei Zhongxing Automobile said it has put on hold its plan to build a USD 300 million plant in Mexico near the U.S. border, as it seeks a new partner for the operation. The company, a midsized Chinese automaker, had terminated its partnership with Chamco Auto, a U.S.-based vehicle importer. Details of the matter were not provided. Zhongxing said it will not start construction of the facility until it secures a replacement for Chamco.
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Housing & Mortgaging
Grupo Carso Kicks Off Works For ″Nuevo Veracruz″
July 21, 2008
Mexican billionaire Carlos Slim′s conglomerate Grupo Carso announced it has kicked off infrastructure works in the state of Veracruz in a project called ″Nuevo Veracruz.″ The works include 600 homes, a hospital, a university campus, a school, restaurants, movie theaters, and a mall, among others. Investment in Nuevo Veracruz will surpass USD 150 million and will create about 15,000 jobs.
Caja Madrid Acquires Su Casita
July 21, 2008
Spanish bank Caja Madrid announced its board has approved the firm′s acquisition of the 60% remaining stake it does not already own in Mexican nonbank housing finance company Hipotecaria Su Casita for USD 342 million. In addition, Mexican developer Geo announced it has agreed to sell its 6.94% stake in Su Casita to Caja Madrid for about USD 40 million.
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Construction & Infrastructure
SCT Awards MXN 8.22 Billion In Highway Contracts
July 22, 2008
The Communications and Transport Ministry (SCT) has awarded three concessions worth a total of MXN 8.22 billion to complete the final section of a highway connecting the northwestern cities of Mazatlan and Durango. The first contract was awarded to a consortium led by Mexican construction firm Omega Corp. with a price tag of MXN 3.97 billion. The second contract went to a consortium made up of Spain′s FCC Construccion and Mexico′s La Peninsular Compania Constructora for MXN 2.19 billion. The remaining contract was awarded to Mexico′s Tradeco Industrial for MXN 2.06 billion.
Government To Seek Bids For Punta Colonet In 3Q
July 24, 2008
The Communications and Transport Ministry (SCT) said that bidding rules for the government′s estimated USD 4.5 billion container port project at Punta Colonet, in the state of Baja California, will be published before the end of 3Q. The bidding process had been expected by the end of June, but SCT said the magnitude of the project and the extremely complex nature of the tender required the delay.
Authorities Prepare Tender For Riviera Maya Airport
July 22, 2008
According to the president from the International Counsel of the Latin-America and the Caribbean Airports (ACI-LAC), bidding rules and specs to build and operate the Riviera Maya international airport will be ready by the end of the summer. The executive said that the airport will be built near Tulum, in the state of Quintana Roo, on lands that were previously acquired by the Communications and Transport Ministry (SCT) and the state′s government.
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Transportation
Turbosine Prices Lead Seven Airlines To Cancel 44 Destinations
July 23, 2008
Increasing turbosine prices and decreasing demand have led seven Mexican airlines to cancel a total of 44 destinations, including international locations. Low-cost airline Aviacasa cancelled 19 destinations, Aeromar 5, Volaris 4, Interjet 2, and Viva Aerobus 2. Larger firms Aeromexico and Mexicana cancelled 8 and 4 destinations, respectively. Meanwhile, bus companies are attracting former airplane travelers with cheaper fares.
SCT Suspends Aerocalifornia Flights, Lifts Penalty Over ExpressJet
July 23, 2008
The Communications and Transport Ministry (SCT) said that its civil aeronautics regulator has suspended the operations of low-cost airline Aerocalifornia pending payment of outstanding fees for use of Mexican airspace. SCT said that Aerocalifornia, which was grounded once in 2006 for safety reasons, owes the government MXN 259.6 million in monthly fees dating back to 2005. SCT said it gave the green light to Houston-based ExpressJet to continue operating in Mexican airspace after it paid MXN 52.5 million, including monthly fees dating back to 2006 and penalties for late payment.
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Telecommunications & Technology
CFC: Telmex Has ″Substantial Power″
July 25, 2008
The Federal Competition Commission (CFC) said that the country′s leading fixed-line phone operator Telmex has ″substantial power″ in several areas of phone service. CFC issued preliminary rulings on four aspects of the country′s fixed-line telephony market – call origination, local traffic, leasing of dedicated links, and call completion. The CFC said it found Telmex has substantial power in all four categories, while all fixed-line operators –including cable TV companies offering phone service – have substantial power in completing calls on their own networks. Telmex is currently analyzing the ruling.
America Movil Posts 25% Growth In 2Q Profit
July 22, 2008
Mexican mobile telephony provider America Movil said its 2Q net profit rose 25% over the same 2007 period. Strong subscriber growth rates in Latin America brought net profit to MXN 17.7 billion. The company added over 6 million new subscribers in 2Q, which brought its total to 165.3 million clients in the region, 2% more than the company had in the year-ago period. America Movil′s total sales increased 14% compared to 2Q 2007 to MXN 84.6 billion.
Telmex 2Q Profits Down 13%
July 22, 2008
Telmex said that profits fell 13% in 2Q amid stronger competition. The company, which is owned by Mexican billionaire Carlos Slim, reported net profits fell to MXN 6.2 billion for the quarter, compared with MXN 7.1 billion in the same period last year. EBITDA dropped 7.5% to MXN 14.4 billion. Sales were approximately MXN 30.9 billion, down 6.3% from MXN 33 billion in 2Q 2007. Meanwhile, Telmex Internacional (Telint), the new _________ comprised of South American telecommunications assets recently spun off from Telmex, posted a 24% decline in 2Q due to higher costs.
Lexmark To Close Mexico Plant
July 22, 2008
U.S. computer printer maker Lexmark International said it plans to close an inkjet supplies manufacturing facility in Mexico, which will affect about 650 jobs by the end of 2008. Last October Lexmark said it would consolidate operations in Mexico, including closing a plant and moving some 1,650 jobs to lower-cost countries. The move is expected to cost about USD 24 million but save USD 9 million annually beginning in 2009.
Carlos Slim Donates 100,000 Computers
July 26, 2008
Mexican Billionaire Carlos Slim′s foundation, which bears his name, announced that it has signed an agreement with computer processors manufacturer Intel to acquire 100,000 laptops. Fundacion Carlos Slim said that it will provide the 100,000 computers to 1,400 schools in Mexico and Central America, adding that the computers will have Internet access and educational content.
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Farming & Agriculture
FDA Says To Avoid Jalapeños From Mexico, Not The U.S.
July 25, 2008
The U.S. Food and Drug Administration (FDA) said that only jalapeño peppers grown in Mexico are implicated in the nationwide salmonella outbreak, clearing the U.S. crop. Meanwhile, Mexico′s Agriculture, Livestock and Rural Development Ministry (SAGARPA) said that the Salmonella Saintpaul bacteria that has affected over 1,000 people in the U.S. is a rare disease in Mexico; this could prove that the infected vegetables were not shipped from Mexico since the FDA said that although they had been grown in Mexico, they could have been infected in a variety of places. SAGARPA also said that the U.S. warning against Mexican crops is ″baseless″.
Government Inks Deal With Wheat Farmers To Secure Food Supply
July 28, 2008
The government has signed a deal with wheat growing farmers and related enterprises as part of the effort to secure the country′s wheat supplies and stabilize mounting food prices. Under the agreement, the government will earmark USD 27.7 million for the project this year and will work out incentives to expand the area planted with wheat and raise wheat yields. The funds will be used to improve the country′s farm irrigation system, create better planting conditions, purchase harvesting machinery, and develop high-quality seeds.
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Hospitality & Tourism
January-May Tourism Revenues Up 6.8% On Year To USD 6.2 Billion
July 25, 2008
According to the Tourism Ministry (SECTUR), Mexico′s tourism revenues in the first five months of 2008 rose 6.8% from the similar 2007 period, to USD 6.2 billion. The number of international visitors arriving in Mexico during the January-May period rose 4.3% to 9.4 million, while the number of tourists who entered the country beyond border areas rose 5.7% to 6 million. Nevertheless, the U.S. economic downturn and high fuel prices are all hitting the tourism business in Mexico as they discourage travel for U.S. citizens, who constitute the majority of visitors to Mexico every year.
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Economy
Mexican Peso Slides As Central Bank Halts USD Sales
July 25, 2008
Mexico′s peso (MXN) weakened sharply after the central bank (Banxico) said it would suspend its daily auction of dollars (USD), ending a mechanism that has helped prop up the currency. The MXN weakened 1.07% to MXN 10.12/USD. Banxico said it would suspend the daily sale of foreign reserves on August 1 until further notice after the government purchased USD 8 billion from the bank to cover foreign exchange requirements for the coming months. Days before the announcement, Mexico′s currency was trading near a six-year high against the USD, closing at MXN 10.007/USD.
Annualized Inflation Hits 5.37% In Early July
July 24, 2008
Mexico′s annualized inflation rose to 5.37% in early July, its highest level in more than three years, bolstering expectations that the central bank (Banxico) will raise interest rates again to cap soaring food prices. Headline inflation in the first half of the month was 0.38% and the core consumer price index (IPC), which strips out some volatile food and energy prices, rose 0.24%.
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Border & Migration
Mexico Lifts Criminal Penalties For Illegal Immigrants
July 21, 2008
Mexico will no longer imprison illegal immigrants detained within its borders as a new measure establishes that undocumented immigration will now be considered a minor offense, punishable by fines equal to between USD 500 and USD 2,400. Illegal immigrants previously faced up to ten years in prison, though most were simply deported. Most undocumented aliens travel through Mexico from Central America en route to the U.S.
U.S. Starts Distribution Of Passport Cards To Travel To Mexico
July 22, 2008
The U.S. Department of State (DOS) and the U.S. Department of Homeland Security (DHS) announced that the new U.S. Passport Card, a wallet-sized document for land and sea travel between the U.S. and Mexico, Canada, the Caribbean and Bermuda, is in production and is being distributed. The Passport Card is not valid for international travel by air. More than 350,000 U.S. citizens ordered the Passport Cards since the DOS began taking orders in February.
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Politics
PRD Annuls March 16 Leadership Election
July 21, 2008
The left-wing opposition Democratic Revolution Party (PRD) annulled the results of its March 16 leadership election, a closely fought contest whose winner was never declared amid suspicions of irregularities. The leadership of the PRD was contested by Alejandro Encinas, a former Mexico City mayor from a hard-line wing of the party, and Jesus Ortega, who belongs to a more moderate faction. Ortega accused the PRD commission, which annulled the election, of trying to block his victory and said he would challenge the party′s decision before the Federal Electoral Tribunal (TRIFE).
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Justice, Safety & Crime
CNDH Says 41 Journalists Killed In Mexico Since 2000
July 21, 2008
Mexico′s National Human Rights Commission (CNDH) said that 41 murders and 8 disappearances of journalists and media workers in Mexico in the past eight years have made these professions ″high-risk careers.″ CNDH expressed concern over the crimes and also about the impunity and the lack of justice surrounding the violence against reporters.
Authorities Find 8,200 Barrels With Precursors To Create Synthetic Drugs
July 22, 2008
Authorities have said that police found at least three chemical precursors to create synthetic drugs in a warehouse in Zapopan, in the state of Jalisco. The substances include different precursors for the manufacturing of methamphetamines and were in 8,200 containers with a capacity for 200 liters each. Authorities said that they found no equipment to manufacture the drugs, but rather believe the substances were to be sent to different meth labs.
Police Find USD 2.08 Million In Cash At Mexico City Airport
July 24, 2008
The Public Security Ministry (SSP) said that police found USD 2.08 million in cash hidden in water heaters at the Mexico City International Airport that were being shipped to Cali, Colombia, but no arrests were made. The cash was found by federal agents conducting a routine inspection in the airport′s customs area. Officers used gamma rays to detect the bills, which had been rolled up and hidden inside residential water heaters.
Kidnappers Release Five South Koreans Unharmed
July 23, 2008
South Korea′s Foreign Ministry said that kidnappers have released five South Korean hostages in Reynosa, in the state of Tamaulipas. A ministry official in Seoul said the four men and one woman were released unharmed. The official said they will be handed over soon to South Korean authorities. A South Korean newspaper reported that the kidnappers called the families of the victims seeking USD 30,000 in ransom. Mexican officials have said that two of the South Koreans will be questioned by authorities; if the results of the investigations show clearly that the two were not involved in any illegal activities, they will be free to remain in the country or return home.
Gunmen Kill Prison Director In Mexico
July 24, 2008
Police officials say gunmen have killed a state prison director in the border city of Ciudad Juarez, in the state of Chihuahua. City police said that prison chief Salvador Barreno was shot as he drove in Ciudad Juarez, across the border from El Paso, Texas. His bodyguard was also killed. Witnesses told investigators that the assailants opened fired on Barreno′s car from a pickup truck near a busy intersection. Torres says three other men died in a separate shooting minutes later.
Ten Prison Guards Indicted In Drug Kingpin Escape
July 21, 2008
The Federal District Attorney General′s Office (PGJDF) announced that ten prison guards have been indicted for their suspected complicity in the escape of a drug kingpin connected to the Sinaloa cartel. The fugitive is Luis Gonzaga, 45, fined USD 35,391 and sentenced to 38 years and 9 months for organized crime and crimes against health and formerly incarcerated in the Reclusorio Oriente jail in Mexico City. Gonzaga was associated with drug lord Ismael ″El Mayo″ Zambada, one of the bosses of said cartel.
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Health & Science
AIDS Medicine Prices Are Higher In Mexico Than In The Rest Of Latin America
July 23, 2008
The Health Ministry (SSA) has said that pharmaceutical companies are selling medicines to treat AIDS in Mexico at much higher prices than those valid in the rest of Latin America. SSA said that AIDS medicine is four times more expensive in Mexico than in countries such as Chile and Argentina because companies claim that they consider Mexico a more developed country than other Latin American countries. SSA also said that pharmaceutical firms refuse to sell AIDS medicines to Mexico through a Pan-American Health Organization (OPS) special fund because that would make them cheaper.
U.S. Fentanyl Deaths Over 1,000 After Shutdown Of Mexico Production In 2006
July 25, 2008
While more than 1,000 people in the U.S. have died over two years from an illegal version of the painkiller fentanyl, the worst of the outbreak seems to have ended after authorities shut down a fentanyl-making operation in the Mexican city of Toluca, in the State of Mexico (Edomex), in May 2006. Fentanyl is a prescription painkiller, often prescribed for cancer patients and administered through a patch. But it also is a powerful, euphoria inducing narcotic, 30 to 50 times more potent than heroin.
Obese U.S. Citizens Go To Mexico For Lap-Band Surgery
July 23, 2008
Many U.S. citizens are leaving the U.S. and going to Mexico for weight-loss surgery as
U.S. guidelines stipulate that only adults with a body mass TOP of 40 or greater – 35 for patients with weight-related conditions – qualify for bariatric surgeries. U.S. standards governing such surgery prevent thousands of overweight men and women from obtaining the procedure. However, some U.S. doctors expressed concern over the increased need to repair gastric band surgeries done in Mexico.
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Arts & Culture
President Calderon Signs Law Requiring Single Price For Books
July 23, 2008
President Calderon signed into law the so-called ″book law,″ which requires that a new book, domestic or imported, be sold at the same price everywhere in the country, and bars discounting of new books unless the editions are at least 18 months old and have been in stock for a year. Supporters of the law hope it will promote reading and help struggling book stores to survive.
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Other
Mexico Proposes Help To U.S. To Fight Fires
July 12, 2008
The Foreign Affairs Ministry (SRE) and the Environment Ministry (SEMARNAT) announced that the government of Mexico has proposed to help the U.S., and more specifically the state of California, in fighting fires that have been occurring there. Support consists of 105 volunteers, two trucks and nine other vehicles equipped with motor pumps.
EPA Rethinks Import Of PCBs From Mexico To The U.S.
July 22, 2008
The U.S. congressional committee responsible for the Environmental Protection Agency (EPA) is challenging a proposal that would allow Veolia, the operator of a Port Arthur incinerator, to import toxic waste from Mexico for disposal. Veolia has proposed importing up to 20,000 tons of the chemical compound from Mexico for incineration, and the EPA has indicated that it would approve the plan. Mexico now sends PCBs to Europe for incineration, thereby exposing the compounds to loss at sea.
Mexico′s Mangroves Threatened By Development
July 22, 2008
According to a study published in the magazine Proceedings of the National Academy of Sciences (PNAS), the destruction of mangroves along the Mexican coast has a high environmental and economic cost. Scientists at the Scripps Institution of Oceanography at the University of California at San Diego calculated the economic value of the mangrove swamps where fishing is done at USD 37,500 per hectare. The study also showed that the Mexican mangroves improve fishing catches in the Gulf of California.
Mexico City Sends Angel Of Independence Replica To Beijing
July 28, 2008
Mexico City (DF) is sending a replica of the Angel of Independence, one of Mexico City′s most distinctive monuments, to Beijing. The sculpture, which will be carrying the best wishes of the Mexican government and people for the 2008 Olympic Games, is also a way to promote tourism to Mexico. DF authorities said they will be sending four other replicas to cities throughout the country and overseas on every continent, in cities interested in hosting the monuments for short periods of time.
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