Is old liberal country first to drop segregation? (9)

I believe the answer is:

isolation

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'segregation?' is the definition.
(thesaurus)

'is old liberal country first to drop' is the wordplay.
'old liberal' becomes 'ol' (this could be a standard abbreviation of which I'm unaware).
'country' becomes 'nation' (synonyms).
'first to drop' means to remove the first letter (the first letter is dropped).
'nation' with its initial letter taken off is 'ation'.
'is'+'ol'+'ation'='ISOLATION'

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(Other definitions for isolation that I've seen before include "Being separated" , "Cutting off" , "Detachment" , "Separation, solitariness" , "Quarantine; solitude" .)

I've seen this clue in The Telegraph.

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