Of I'm going to be talking about today about agricultural commodity price shocks and the effect on the growth in Sub-Saharan Africa. Now, my work on commodity prices has mainly been on the univariate study of commodity prices. So looking at trends cycles, volatility, and persistence. When I was here on sabbatical recently, Tony and I discussed about doing some work together on looking at how commodity prices can affect growth in sub-Saharan Africa. Yr ystafell i gael g critically y prysiau yn gym stackedwyd anhyfodol y Llywodraeth i Llywodraeth Aelodau. Nid yw weithio dod gen i'w gwybod, mae rôl yma, unrhyw arall, fod rhywunio'r gweld o'r datblygu, i wneud arferiaeth sydd o gwybod iddyn nhw'n ei wneud flasig o'r ysguodadau neu rhywun i'w gwybod i'w cyffaint o'r Llywodraeth i Llywodraeth. So what we're going to focus on here is commodity prices because this has been singled out as one of the primary drivers for income volatility in Uppsaharan Africa. The problem with commodity prices is that they are becoming increasingly variable, especially since the 1990s, they are becoming increasingly variable. They are broken trends in commodity prices. There is persistence, which is dynamic in nature.  Mae'r cymorth a newyddol yn fanch, ac mae'r cymorth i ddechrau yn fwy am yr hwrnd dechreu, ac mae'r cymorth i ddechrau yn cymorth i ddechrau. Mae'r cymorth i ddechrau yn cymorth i ddechreu, acolodol yn dwech yn cymorth i ddechrau It is difficult to deal with these sorts of things and of course this has impacts on aid flows as well, it just complicates the whole picture. So, there is a large research that has taken place on commodity prices as I said, trends, cycles, volatility and persistence and they are all found to change over time which makes it all the more difficult. So, when we start thinking about how commodity price shocks can affect economic growth in sub-Saharan Africa, we need to think about what particular manifestations of commodity prices might affect the incomes in these countries. So, what we do in this paper is we choose two particular manifestations of commodity prices, which have been used in the literature, but for different primary commodities. So, what we're going to focus on here is agricultural commodity prices, and I've basically used this article by Anderson and Bruckner, where they have done some detailed study by looking at Penn World Table data to find out that for the period of time that we're going to consider as well in our paper, that the average share of GDP in sub-Saharan African countries from agriculture has been a considerable amount. So, the motivation over here is to study agricultural commodity price shocks on per capita incomes, and particularly what we are going to be interested in is to separate the shocks in commodity prices, to divide them into positive shocks and negative shocks, and also within those positive shocks we look at sustained positive shocks and negative shocks as well. And then we'll do some simulations to find out if we shock this system how output changes over time, we'll look at a certain horizon, and we'll find out whether there's any difference between these positive and negative shocks. So, the question is what sort of price shock are we going to choose? Now, in the literature there are two types of price shocks that have been used for oil price shocks. One has been provided by Mark in 1989, published in the Journal of the Political Economy, where he divides oil price shocks, oil price movements rather, into positive and negative movements, and traces out the effect of those oil price movements on the US economy. And what Mark finds is that positive oil price movements tend to have a more impact on the US economy than negative oil price movements. And since then, this particular model by Mark has become quite popular in the literature on commodity price movements, especially oil price movements, and they have been used in the literature until only recently. Also, Kilian and Vigferson have been using this type of study quite a lot. Hamilton in 1996 and then again in 2003 refined the definition of this oil price shock by talking about a sustained increase in oil prices to be what he calls a net oil price increase or decrease, and what sort of effect that has on the US macroeconomy or other economies as well. And what they do is Hamilton chooses the current oil price and then measures it against a certain period of time. So if that current price is greater than that oil price over a certain short interval, then that would be considered as an oil price shock. So basically it's about commodity price increases that establish new highs relative to recent experience. So let's talk about some perceptions of commodity prices because these sorts of studies have been used for oil prices. Now if we talk about commodity prices in general, which include agricultural prices, prices of metals, and other primary commodities, some of the classic studies, and there are other studies as well, but I've just chosen some of the classic studies. Deaton and Lloroc in 1992 in their paper in the review of economic studies, and as well as Deaton in 1999 in the Journal of Economic Perspectives, have talked about the nature of commodity prices. They've looked at the basic statistics, and what they conclude is that commodity prices are characterised by flat bottoms punctuated with sharp peaks, and these sharp peaks that occur in commodity prices are driven by stockouts. So that's what causes this sort of movement in commodity prices. In a separate paper, which is more of a policy paper, Deaton and Lloroc, they point out that this uncertainty about commodity prices makes it all the more difficult and complicated for policy makers to handle these sorts of shocks. So what we plan to do is we plan to borrow these two types of shocks that are used in oil prices and use them for agricultural commodity prices, primarily because in the studies by Deaton and in also other studies, for example one study that comes to my mind is a recent study by Harvey, Kellard, Madsen and Warhur, they have used primary commodities, this whole set of 25 commodities over four centuries, and within their basket of commodities where they've looked at agricultural prices, which include food and non-food, they've also included oil. And I've also looked at some separate studies, I've done one study myself where I've looked at broken trends in commodity prices and again broken trends in oil prices, and they're characterised by the same sort of movements. There is dynamic persistence in commodity prices, there's also dynamic persistence in oil prices. So in terms of their statistical nature, they're quite similar. So what we have decided to do in this paper is to take these two manifestations of commodity price movements and which are applicable for oil prices and have been studied in the literature quite extensively, especially by Kilian and Vigfoson, and see what sort of effect they have on sub-Saharan Africa. So to give a literature review, again the literature is quite substantial and so if anyone of you has done some work on this, please don't feel offended if your work is not here. But this is just a snapshot of some of the studies which I found quite useful. Easterly in 1993 they published a paper in the Journal of Monetary Economics where they talk about growth regressions. They just model growth regressions and they find that commodity terms of trade have a significant effect on output volatility. Mendoza, Cousin, Reisman, they use calibrated journal equilibrium models and they also find a similar sort of result. Blinion Greenaway, they use panel data and they find that for variations in output there is a negative relationship with output. Sorry, variations in commodity terms of trade, there's a variation in output and the relationship is negative. Blackman also uses a certain length of time but that's historical data from 1870 to 1939 and again they find similar results. Agion uses general methods of moments and again the results are quite similar that there is a strong relationship between commodity terms of trade and output volatility. Now Deaton and Miller in 1996 and Hofmeister and others in 1998 they use a VAR model and they actually find that the relationship is not so strong as previous studies tend to suggest. But then Broder, Radatz, Collier and Gaudaris in 2012 have used panel VARs. Collier and Gaudaris actually use a panel ECM to find out the relationship is actually quite strong between commodity prices and economic growth. But there are some drawbacks in these studies and what I'm tempted to pick out is that the dynamics that they assume among these cross-sectional units are relatively homogeneous. That is not quite true because there are studies which show that the countries can be quite different, quite heterogeneous in nature. Now Radatz does acknowledge that and he just sort of simply states in his paper that low income countries tend to be relatively homogeneous. We're not mixing up low income countries with middle income countries but nonetheless it's a fairly strong assumption and that's acknowledged by Radatz. And if this assumption fails according to Pesseron and Smith on the impact of the shocks on economic variables it will be inaccurately estimated. The other explanatory variables that they use in all these past studies is a single commodity index which is the Deaton and Miller index which is a popular index which is used in studies. And what we have seen in the literature, especially the current literature on commodity prices is that these commodities behave quite differently. Even among categories such as beverages, coffee, cocoa and tea for example, they behave quite differently. They have different dynamics. Even metals like zinc, copper and lead, they have different dynamics. So to put them together as one commodity index that has been done in past studies seems to me to be a fairly restrictive assumption. And also that's been, I've just recently found out a paper by Eucelius Moller and Tarp in Oxford Bulletin of Economics and Statistics where they have lucidly listed the advantages of using time series methods over other methods such as panel and cross section. I'll quickly move through this. This would be the standard VAR model that would be used if one were to look at a linear approach which has been used in past studies. All past studies which are used in panel VAR and panel ECM have used a linear approach. So basically what we have over here, you've got the B21 coefficient in the second equation for example. If that is found to be significant, those coefficients, then you could say that X could have some causal relationship on Y. So X could be commodity prices. Y could be GDP per capita. Right? Now what we do over here is we introduce this extra term which is XT+, which is basically the model of MOC. And this is not what MOC actually did. He had a single equation model. What we are doing over here is we are borrowing the model of Kilian and Vickerson which was published in Quantitative Economics 2011. So we are using the same type of model that they have used. So that XT+, it's got the coefficient G21. If those coefficients are significant, then simply that means that the XT+, which actually senses out the positive changes in commodity prices, they can have a causal effect on GDP which is measured by Y if those coefficients are significant. And in that way B21 coefficients in the second equation would pick up the negative shock. So you're separating out the positive and negative shocks. Now Hamilton uses a slightly more complex model where you have XT+, which simply means a sustained increase in commodity prices which is measured by this max function over here and in which is set equal to three. That's the typical period that Hamilton uses in his studies. And we're going to use that same level as well. So again G21 measures that positive sustained effect on GDP. And then we compute the impulse response functions if we find that there is asymmetry in these types of VAR models and that simply is calculated by looking at one standard deviation shock which could be positive or negative, which is denoted by delta and H is the time horizon, which we choose in this data set to be five years. So the data that we used is GDP measured in constant prices. I'm going to quickly go through this. We use the Griliang index. This is a very popularly used index in commodity price studies. The sample period is 1960-2010, simply based on the sample size that's available. And we carefully choose nine agricultural commodities that are closely related to the GDP per capita that is available for various countries. So just to give some idea, a set of graphs over here and as you can see as Dieter and Miller suggest, you've got these sharp spikes which can tend to be persistent at times. Some basic statistics about the studies. There is a fair degree of persistence which is picked up by the autoregressive parameters AR1 and AR2. There's a fair amount of coefficient of variation. The skewness is positive, as we would expect. The number of positive spikes outweighs the number of negative spikes. And again, I'll just quickly whiz through this. You've got different countries listed over here and you've got the commodities which I found out from the FAO database and other related studies where there's a fair amount of dependence just on one single agricultural commodity. Now, these are the tests that we have over here. If we were to look at the Mark model that we talked about, you can see that there are four different countries which seem to be affected by this asymmetric shock. So if there are positive shocks, you can see that you can separate them out from the negative shocks and they tend to be quite significant. In the case of the Hamilton model, there's only evidence of two cases, but one of them, that's Cameroon, when compared with a linear model which is given by the last column, the linear model gives a better fit when I use a model selection criteria. So in the case of the Hamiltonian-type model, you've only got one particular case which is cote du va. But nonetheless, it's a very important country because as we saw from the previous table, a fair amount of dependency on one single commodity which is coco for the case of cote du va. And then given that we find that there are five countries which have found to be asymmetric, I've included Cameroon as well just as a comparison. We do this impulse response function, so it's an innovation accounting exercise, and we calculate the responses due to positive and negative shocks and what happens is we find out whether the differences are significant enough. So the graphs would look somewhat like this. I'll just quickly show them what the graphs look like and then we find out whether the differences between these graphs are significant using these p-values. And as you can see that in the case of Chad, cote du va, the Democratic Republic of Congo and Malawi, they're quite significantly different, but then over time some of them tend to be not so different but sometimes the difference persists. So finally, thank you. The last slide, you find that there is, if you take the linear case which has been chosen in most studies, there are about six countries which show that there's a causal relationship between commodity prices and economic growth, but we find that just as many countries can have an asymmetric response and that complicates the whole policy-making issue because then you've got these positive and negative shocks which can be quite different and given that countries are advised to accumulate reserves doing the good times and spend them doing the bad times, setting the school can be quite difficult given this evidence-based symmetry responses that exist. On this complicated note, I'll finish it. Thank you. OK, thank you very much.


Y cwestiynau yn ymgyrchol 2949.1 yn ymgyrchol Llys-Smyth, sy'n gwneud ymgyrchol 2949 yn ymgyrchol Cate Forbes yn ymgyrchol yng Nghymru, ac yn ymgyrchol ymgyrchol ymgyrchol. Ymgyrchol ymgyrchol ymgyrchol ymgyrchol ymgyrchol 2949.1 yn ymgyrchol Llys-Smyth, sy'n ymgyrchol 33. Felly we will move to vote and members should cast their votes now. The vote is now closed. The result of the vote on amendment number 2949.2, in the name of Daniel Johnson, is yes 25, no 98. There were no abstentions, the amendment is therefore not agreed. The next question is that motion 2949, in the name of Kate Forbes, on budget Scotland Bill B agreed. Are we all agreed? The Parliament is not agreed, therefore we will move to vote and members should cast their votes now. The vote is now closed. The result of the vote on motion 2949, point of order Neil Gray. Presiding Officer, apologies, the voting app didn't work, I would have voted yes. Thank you Mr Gray, we'll ensure that's recorded. The result of the vote on motion 2949, in the name of Kate Forbes, is yes 69, no 54, there were no abstentions, the motion is therefore agreed. The final question is that motion 2964, in the name of George Adam, on committee meeting times be agreed. Are we all agreed? The motion is therefore agreed, that concludes decision time, we'll now move on to Members Business.


Good afternoon and welcome to what I would say the most important brief so far on the subject of inclusive growth. My name is Chalot Piotrkonitska and today I'm a moderator, but I'm very, very active working for this issue. I'm so happy to have three very informed people and influential people on the spot here today because we're going to ask you tough questions. We have Rick Sammons from the World Economic Forum and the Management Board. We have two finance ministers. We have Minister Monod from Canada and Minister Gatteta from Rwanda. So once again, very welcome and welcome to our audience online. We will spend 29 minutes from now on this very important topic and may I just say we have been talking about inclusive growth for many years. It's been one of the kind of the buzz headings for a lot of what we want to achieve. But while we have been talking, we have seen that actually the development is going in an opposite direction. We see inequalities increasing. We don't see inclusive growth necessarily increasing. We also see that there are some governments who take this as a priority but very few governments and international bodies and governments who want to really find ways to go from words to what they mean or struggling and where to start and where to entry. We're going to hear a little bit from all of you, but I would like to start to ask you, Rick, World Economic Forum, how do you view this issue of inclusive growth? And if I may be a bit tough on you, I mean, this is where we're going to solve these issues, responsible leadership and all of that. It's all about this, I would have thought. So do you feel kind of sense of urgency in contributing to this? I agree with the premise of your question, Charlotte, that this is one of the most central issues implicated by the theme that you just referred to, responsive and responsible leadership. This is certainly one of the largest issues hanging over the international community right now and indeed this meeting here in Davos this week. I think it's fair to say that there's a broad even worldwide consensus on the direction of inclusive growth. People recognize that we need to find a way both to have growth because unless the pie expands, it's very difficult for everybody's piece to expand over time, that we also need a more socially inclusive model generating that. The problem, as you have just pointed out, is that it's more aspiration than action currently. Although we have two governments represented here who, from my perspective, are governments that really think seriously and have a strategic framework for thinking through how to infuse their growth process with social inclusivity, as opposed to try to compensate for the problems after the fact. And it's terrific that they're here to articulate a little bit of how their government's approach to this issue. For our part, we decided about a year or so ago, seeing this distance between aspiration and action, that we just try to think about through historical experience, observation of practice, and scholarship, just what the economics research shows, whether there's some frameworks and some tools that might be useful for governments that do have this ambition. And we released earlier in the week this inclusive growth and development report, and I'll just give you just a skeleton of what is in here. First it articulates a bottom line. And this is, I think, maybe it sounds subtle, but I think it's significant. Growth is absolutely crucial, but it's worth thinking about growth as a top line indicator of national success. And for business people, they'll understand the metaphor here. The bottom line, where most people evaluate the success of the performance of their economy is not the growth figure that's published in the statistics in the newspaper. It's basically whether their standard of living progresses. And standard of living has an income element, has a job opportunity aspect to it, has economic security, and also quality of life. And I think policymakers first have to more explicitly recognize that that is indeed the bottom line north star, if you will, for the compass setting. Secondly, we, through this research, identified 15 areas of policy. It tends to be structural and institutional strength and incentives in these 15 different areas, which are actually quite important, particularly important, for driving growth with equity. And this is in effect this policy ecosystem, this structural policy ecosystem. It cuts across infrastructure, labor, education, corruption, basic services in the health field, social protection, there's a whole panoply of things where you have win-wins between growth and equity. And most governments don't really think about that as an ecosystem of policy that deserves to have a similar level of attention as the traditional focus of finance ministers and chief economic advisors, which is macro-genomic policy, fiscal and monetary policy, and trade ministers, which is trade policy, and the like. Those latter elements of policy are absolutely crucial because they're critical for driving growth, but this ecosystem of structural and institutional strength across these different areas is in effect the implicit income distribution system of an economy. It's how you can infuse your growth process with more equity, if you will, instead of just trying to compensate for it after the fact. So we've laid that out as a framework. We think that the basic bottom line here is that it behooves governments that are trying to solve this puzzle to cultivate this institutional strength, this structural policy ecosystem over time and to maintain it, look where they're strong or weak relative to their peers. And that in effect constitutes that rebalancing of policy priorities constitutes a new growth model, if you will, a new mental map. And then finally, what we've done here is suggest that, okay, it's one thing to have the framework and the new mental model and a new compass setting of living standards, the next thing you need is basically good information like a business. You've got a big problem in a business, very often what you do is you try to benchmark. Who's doing it well? How do I stack up against that? And so we put some cross-country information covering 109 countries in here in all of these different dimensions to let people look at it. And the last thing is you also need a performance metric. And so what's a good performance metric for progress and living standards? GDP is just a part of that puzzle. We need a larger one. So we've laid out a dashboard of 12 key KPIs, key performance indicators, and we provide the data for all the countries. We roll it up into a single index and something called the inclusive development index, and we let countries see where they stand on inclusive development relative to where they rank in the world on GDP. And these are all basically just a toolbox to help governments. And by that toolbox, you're triggering action, we hope. And we see a very interesting attempt. Minister Mono, I think you actually embarked on to be a test case in this. That's my way of expressing it. Please tell us about your view on this and how you go about it. Well, Rick was nice to say he agreed with the premise of the question. And I'm not sure I'd agree that we embarked to be a test case. I mean, because we embarked with a purpose. The purpose was really to think about how we could do better for Canadians. And really, we set down on this path. It's been a couple of years now. We've been in office for 15 months. So the discussion with Canadians started before that. And it was really very much about talking about the challenge in having an economy that benefited all Canadians, a concern that middle class Canadians in particular, that people that were maybe lower on the income scale were just not seeing the benefits from growth that gave them the optimism that the next generation was going to be better off than the current generation. And if you sort of think to the promise that at least in our country, and I think it's not just Canada, it really is to parents that they can see a future where their children are going to be better off than they were. And that's aspirational, but it's what we've been able to deliver over a period of the post-war generations. So we saw really a change in the sense that that promise was really not being realized for the middle class, that the benefits of growth were really accruing much more to those at the top of society. And so we embarked on thinking about in our context, what could we do to make a difference for middle class Canadians that would create a positive circle where we created a sense of optimism because the families could see that they were doing better, which creates then the willingness to make the investments that are going to allow the economy to keep growing. So it is a circle that we're trying to achieve. And we started by thinking very specifically about middle class Canadians that were facing challenges and how we could help them. So the report for us is going to be enormously helpful as we move forward, as we think about benchmarking. But our starting point was to create a positive experience, a positive sense for Canadians. We lowered taxes on the middle class and we very explicitly did it at the same time as we raised taxes on the top 1%. We said that the equation that had been in place for the last generation had been starting not to work. And so that's how we went out and talked to Canadians. We said we're going to make a difference for you and it's going to be a progressive in terms of taxation. In doing that, we helped nine million Canadians who have lower tax rates now and 1% who have higher tax rates. And then we looked at the benefits that we have currently for Canadian citizens that were universal and the one that's had the biggest impact is our childcare benefits. We had a few different childcare benefits and the most important one was a universal benefit going to all Canadians, irrespective of wealth, meaning it included the most wealthy. And we took that, we decided to means test it, we added more money to it because we felt that was a place where we could have a real impact and significantly changed outcomes for lower and middle income Canadians. So to give you context, it's thousands of dollars on an after tax basis for a woman, a single woman with two children. So a big difference in her situation if she's earning 30 or $40,000. So a really material change there and what it's going to do in metrics, in calendar year 2017, we will see a 40% reduction in child poverty in our country versus three years ago. So a very significant change. And so creating that sense of optimism, we think is really important as we embark on growth initiatives. So as we think about how we're gonna grow the economy, we promise to make significant investments in infrastructure, infrastructure that would help people today but really create a more productive economy for tomorrow. We recognize that that's important, but without having the confidence of the population to say we're gonna make those investments, they're gonna make your life different, we might not get the public support. So we hope that we can be a beacon to show that inclusive growth is absolutely possible, but you need to take decisions that deal with the actual issue on the table and that is that there are people who feel like they are not as well off as they expected to be and therefore their confidence is gonna be less. Starting to do this with Canadians, we're having positive results, we think that that will beget more positive results and allow us to continue investing in the future. That's the goal. But it's a very compelling case and also to be discussing this with two finance ministers. We're talking about growth, we add the word inclusive, perhaps we don't have to add that word in some years from now because it's so evident that that's what it's about. We are implementing the Sustainable Development Goals, they are all about inclusive growth within planetary boundaries. We are talking about one national example here. Part of the discussion has been exactly around that. Can we use similar models just in any context? And I guess I'd like to ask you, Minister Gatteta, you're not necessarily dealing with middle income people who are disappointed, you are dealing with perhaps a different point of departure for this work. What are your solutions to this issue and where do you see, if you see similarities to what we just heard? Yeah, thank you very much. I understand what you're saying, I used to work in the government in Canada, but the situation. So we have sort of a Canadians. Yes, so the situation in Rwanda is very, very different. I remember when I left and I went to Rwanda, immediately after the genocide in 1994, I found a situation that you cannot explain. The whole socioeconomic fabric had collapsed, the poverty levels were 78%, the economy had declined by half, inflation at 64%. You can imagine how the situation was at that point. The GDP per capita was 146 US dollars per person. Since that time to today, it has increased five times. We are now coming to 740 US dollars per capita. We are aiming to become a middle income country. Now from there, we had to have the two track economic development. One that would grow the economy so that we can get the benefit out of the economic growth. Another one that would address the poverty levels. From there, we have really been working on the poverty levels and two years ago, the extreme poverty was at 16%, the overall poverty was at 9%. And our target is by 2020 to make sure that there's no extreme poverty and the poverty levels generally should be below 20%. That's our target and that's how we work. And the first thing is, before even you talk about the inclusive development, you have to understand your society. What are their needs? How really, what are the key issues? And to do that, we do the measurement. And I think you're right. Only looking at GDP per capita would really not be sufficient. It's good, but it's not sufficient. It shows you how the economy is growing. But then for us, we look at so many other elements. From human development index to human poverty index, we look at the gender-related development index because for us, gender is very, very important. Then we do the survey, the household survey that give us showing the income distribution and where it is located in each district, in each sector of the country and also in which groups of the people. So once we look at all that, and at the same time, we combine it with access because for us, access is very important. Access to water and sanitation, access to electricity, access to education, access to health. For health now, we have the universe covered for everybody in Wanda. We have the two tier system. If you are working, they deduct money from your salary. If you are not working, you have another program that caters for the rest of the people. So meaning that actually any benefit would be coming back to address access. We also look at access to finance. We also look at access to ICT because ICT is now a tool to be used by almost everyone. We look at access to transport and so forth. And then from there, that's when we say, as a government, how do we invest our money? How do we invest the public money to address the key problems that we see in our society? Let me just give you an example how we address it. There was the issue of land and when you are promoting access to finance and we realized that the women didn't actually own anything. They didn't, the land was owned by men. So we had to reform the law to make sure that women have access to land. And now the 18% of all the land in the country is owned by men. But for women, only it's 26% and the rest is shared land and government. Meaning they can use the title deeds to access money from the banking system. Initially they couldn't. So those are the kind of roadblocks that we are trying to eliminate to make sure that we can solve some of the issues of our society. So over time, we also innovate to make sure that we assist those at the lower end. At the lower end, you have created a program and I was looking at the Canadian program, for example, of social welfare. Where it caters for those that are really disadvantaged. In our case, we don't have the money that can care from the central government. So we created a social protection program of which actually part of the money is borrowed from the World Bank and from others and then also we put the government budget to make sure that we can do two things. Those people who are disadvantaged but who have the energy to work. We provide the skills, we provide resources so that they can really graduate out of poverty. Others who cannot because they are too old and all that, those are the only ones who are supported, who get direct support. So we had to make sure that we cat up for the entire population. From the lower end up to the upper end and we measure accordingly. Every year we do the measurement to see exactly what are the remaining gaps so that we can be able to fill them. So what we are talking about really inclusive development. If you don't address it one way or the other it will hit back. And it has hit back. So we have some 10 minutes for questions. So I would like to invite questions from the audience. Can I see a hand please? Take the opportunity now to challenge this influential stewards of inclusive growth. Yes, please. And please present yourself. Yes, I'm the principal and vice chancellor of McGill University. I think we all agree this is a very important goal. And the big challenge is to achieve it in reasonably good time. So what I'm asking you is what are the measures that you're taking that you can say this will move the needle. This will change the situation say in five years as opposed to 10, 15. In my field we know that education is an important thing but it's a long term. What are the initiatives that we'll be delivering in shorter times? So we can allow for two more questions and ask our panelists to respond to them. Yes, we have one and please again. I think you waved, yes you did. Please present yourself. So Sean Osborne, the president and CEO of the Network for Teaching Entrepreneurship. We teach middle school age kids how to be entrepreneurs. Just curious if part of the programs that you look at implementing include education. Okay, so we have questions around measurements not short term but within five years and if we include education. Do we have another question? Yes, please. Hello, Peter Vanham, global leadership fellow at the World Economic Forum. So I heard talking about a two track plan for economic policy one based on growth the other one based on eradicating poverty or strengthening the middle class I guess in the case of Canada. My question would be is there a consensus about that also in the country that faces the most problematic situation right now the United States that indeed raising taxes or spending more public money is needed or is wished for to help the middle class strengthen. I've heard more talk about pro-growth plans than about the tax raising and public money spending part of it. That's an issue that has been discussed very much over these days in Davos the kind of context in which we are talking about growth and if society is going away or going in to try to solve this issue. So I think it's a mixture of questions and I'm not going to divide them between you. So I will allow all of you to respond and you can, we allow them to pick and choose but please try to respond to all of them and I will start where I was ending I will start with Minister Gatteta. Yeah, thank you so much. The question on quick wins is very, very important for us and the question on quick wins where I could give you so many examples of the initiatives that we are doing. Let me just pick maybe three of them. One of them for the quick wins we know that education is very, very important but we know that education requires a lot more than the university graduates. Actually you find that the, if I just give an ordinary example that we see for each construction site, for one engineer you need so many planners, you need so many electricians, you need so many and these ones have skills that are not university graduates. Now the training, the technical and vocational training becomes very, very important and that's why we focus so that these people come up with quick skills that are going to serve our society. Just let me give you an example after the genocide in Nwanda. We had a problem. We had no capacity at all. So if you go to a construction site almost over 50% are Ugandans. If you go to finance sector, they'll be Kenyans. If you go to do a haircut, they'll be Congolese. If you go to water, they'll be Tanzanian. So you imagine the situation we are in if you had not allowed the people to come in and what we are trying to do now is to see how we can educate massively for all the services that are required by the society and the technical and vocational training becomes a quick win. The second one, we had so many people that I don't know if I'm running out of time. Well, a little bit, but. Okay, so I have so many examples that I wanted to show in terms of access to finance.  It's in our constitution and that's why there are 64% women in parliament and elsewhere in all other institutions it is where about 40%. Now, when it came to access to finance what we did was we put a facility that's going to provide guarantees for women up to 75% so that they should be able to also have access to money with some guarantees because initially they didn't have any kind of assets that you can be proud of. In terms of the very poor people we had to introduce one cow per poor family program and I can tell you this has really changed the whole landscape because this time they can get milk, they can sell, they can get money, they can, it addresses the issues of nutrition, it addresses the issues of fertilizer and in our case it also addresses the issue of unity because in our culture if I give you a cow we are friends forever and for people where they have been genocide this was very, very important. So the cow became a very important symbol for all of us. So I can go on, I have the queens which are very, very important. Thank you for giving concrete examples of that minister and I will now turn to your Canadian colleague. And please, one minute or so. Well, maybe I can take the questions in a different order and start with a question around the potential policies in the United States. My main observation would be that in the United States the outcome of the election reflected anxiety of middle class Americans, middle and lower income Americans that are concerned that the deal isn't working for them. So in a sense we share that concern that we're trying to find ways to make an impact. I can't really opine on their policies but I do think that they are likely to work towards dealing with that issue. I will see how they go about it and our job will be to work with them to talk about how much of an impact we can have working together. Trade has been very positive between Canada and the United States. Many, many Canadian jobs, many, many American jobs are based on our mutual trading opportunities. That will be what we'll try and do as we work together. With respect to short term wins, some of the things I talked about in my opening where they were short term, we lowered taxes immediately. We increased within a short number of months benefits for seniors. So single, impoverished seniors in many cases, immediately got more income. So an immediate impact. The child benefits immediate impact.  In our system education is a provincial jurisdiction but we believe that our effectiveness over the long term is going to be about education, training, retraining, skills, development. And so we've put in place some significant grant measures to help university students to get an education with less debt at the end, which enables a greater percentage of people to do that. And we will be increasingly talking about skills, how we can identify the skills needed in our economy, how we can help Canadians to know what they should be pointing towards as they do their studies or their training or their retraining. And thinking about how we can intervene in that effort to make sure that as people think about lifelong learning because they'll have multiple careers that we can intervene at the right times through information, through training initiatives that will make a difference. So it is a program with short and long term aspects that we hope will have a positive impact on growth but importantly on inclusive growth. Thank you, Minister. And maybe one thing if I can say just one on education that which maybe I didn't elaborate. When we started it was very difficult. If a parent would be paying for own kids and now where we have reached is that we have the universal free primary and secondary education. To reach that level is showing the how we have invested just from the growth. This is the benefit of the growth that has been happening. At least we have reached that level where we have universal up to the secondary level education. And I would love to continue this discussion. We've just started, but now we just have to end. 30 seconds, Rick. I think we've just heard some really concrete and encouraging examples of a different kind of way of generating growth. You know, they were not talking about, well, we've got to depreciate our currency and try to build up an export surplus. Not talking about, well, we need to kind of cut interest rates as far as we can and put some quick fiscal stimulus in there. These are ways of, would be just sort of engineering into the growth process itself and domestic much more resilient, sustainable type of way you generate growth. And that is a new growth and development agenda, which I think is very hopeful for the world. And that's ultimately Charlotte to end. The constructive response to a lot of the political pressure, whether you're in a developing country or in an advanced country of addressing people's fundamental needs, which has improved living standards. Thank you very much, all of you, for being concrete, talking to the point and for you to be here. Thank you, audience online. Thank you, audience in the room. And let's get out and inspire others to act and not just to talk. Thank you. Thank you. Thank you.


Clamidominus rianhati is a popular model organism used to study the effects of environmental factors on algae. This research focused on the impact of nitrogen deprivation on the accumulation of triacylglycerals, tags, which are a type of fatty acid commonly found in algae. Under nitrogen-deprived conditions, C. rianhati produces more tags than it does under normal conditions. Additionally, this research examined the effect of different genetic backgrounds on tag accumulation. It was found that the amount of tags produced by C. rianhati depends on its genetic makeup, with some strains producing more tags than others. Furthermore, the researchers observed that the rate of tag accumulation slows down once the cells have already begun to produce them. Finally, the researchers noted that the amount of tags produced by C. rianhati can be increased by reducing the amount of starch present in the cells. This article was authored by Kariah Patrick, Nguyen Mai, Fesla Boris, and others. We are article.tv, links in the description below.


The current Oshun state government says it has constructed over 70 kilometers of roads with several kilometers ongoing at different areas in the three senatorial district in the state within this one year in office. The state government says in the three senatorial districts 27.2 kilometers of road was constructed in Oshun west for 10.4 kilometers in Oshun east with 28.6 kilometers in Oshun central. The government also said it has renovated 445 health centers with revitalized health insurance scheme coupled with efficient resident doctors welfare. It also emphasized that there is no going back on its planned 100 billion narrow special infrastructure projects to be completed within one year. The state governor represented by commissioner for information Kola Aliimi stated these while addressing journalists on the developmental strides of their delicate led administration in its one year in office. Transformative efforts of the governmental education agriculture mining potable water and strategies to curtail environmental degradation among others were also reeled out during the one-year anniversary press briefing. We completed key intercity roads like the Kinoshubu road while Oshubu is ongoing. We completely rehabilitated 31 schools with another 31 in the pipeline. We built 332 water projects while major waterworks at Iwo, Ede, Oshubu, Ikwendi and Honda Rehabilitation. The area of old pipes got no activity on demand and we have some started it. We are now consuming the old pipes. New pipes are now obsolete. The people where you complete all the production life from the machine you will see that after getting to the consumer you will still see that the water will be contaminated because of the bad pipes. So we are now consuming all the old pipes. We are now bearing the current history of another new pipeline. The pipeline that is being approved by WHO. Transportation is very key in our life and we cannot do without it. We are getting a very big assistance from our government because the amount of the people it puts people before you got it. Oshubu is very paramount to him and he has the first supportive and as I am talking to you as soon as possible we are going to have more versus stronger awareness. Hello, hope you enjoyed the news. Please do subscribe to our YouTube channel and don't forget to hit the notification button so you get notified about fresh news updates.


update. Welcome folks. We have our industrial finished up $3.43, NASDAQ up $96, S&Ps up $45, gold. Gold contract down $7.50, trading at $16.56 an ounce. We had silver off $0.07, $18.64 an ounce, light sweet crew down $2.39, $83.07 a barrel, notes and bonds. A 10-year note, up $6.6, trading $1.10.29 and $30, up $4 at $1.23.16 and $Kingdala. $Kingdala up $33 ticks, trading $1.120.76, the euros at $98, the yen is at $149.23 and the British pound is at $113 to one US dollar. Well, you know, if we take a look at the spy bottom line folks might take is this thing wants to go higher. You know, bottom line, you have the high volatility happening, there's no doubt about that. What we have out here is that, you know, you had volume on the move, we did 91 million shares, that's saying it's going for the swing point, which is $379. We go into the NDX100, the Qs, I expect the Qs also going to follow suit out here. So we'll see how that baby's going to shake out, but the Qs right now closed up $2.13. Netflix just come out with numbers. Netflix is trading $255. It was trading $2.40, so the bottom line that we're going to see this $284 right now, you're at $271, and if we go into that dollar, it's going to be all about this dollar. The dollar's rule and we know that bottom line is going to make a difference whatever Netflix is having to say that the market's digging it right now. We'll see whether it can hold by tomorrow morning. Right now you're actually at $263. My take is that next Netflix at the bottom and I suspect that we're going to be up there. They reported $3.10 and they were looking for $2.13. So the bottom line is that they made a dollar more and you know, bottom line, that's a big number, man. There's no doubt about that. That is one big number. NFLX, NFLX, we take a look and you're going to see it right there, $262. So trading up $22 is trading up approximately 10%. And Netflix, they actually beat unsubscriber growth also. The third quarter subscribers beat unsubscriber growth. So bottom line, you can see the NQs, they already went up to $118. If we go over to the, watch this, you're going to love these markets, man. Watch this. The Qs, they probably just added $2. Let me see. Come here. Yeah, $272.23. Have a great night, folks. Have a safe night. Come back and visit Tommy tomorrow morning. Kicks us off 9 in the morning. Great show, folks. Well, yeah, them folks.


What is up everyone? Happy Tuesday. It's Tuesday, August 29th 2023 and what a morning it was. I had, this has got to be my best day while leading the live stream. Plus $2,228. And it was kind of like the perfect storm today. I had three longs and I even had a short that ended up being positive, which was a great out. I mean, I just think I just traded really good today and the markets really cooperated honestly. So it's been a while since I've had a nice four-figure day. So I started off with Coinbase, which was just awesome. And wait till I show you what happened there. Maybe you already know, but this could have been just a monster number even bigger than this. But a 580 there on a volume runner. And then a Mighty 90 and Apple short that I squeaked out a positive trade on, even though the market was really strong today. And then jumped in continuation runners in Square and Goog. And in Square, again, I don't remember a four-figure in one stock by itself ever in the live stream. But what created that was, again, I think a perfect storm of I added to it at a really at a point. Well, it came down to a pivot where I added to it. So I had a lot of contracts on and then it just took off. So let's show you. So starting off with Coinbase. So Coinbase, you can't see, but this isn't the first bar. This is the first bar at 830 Central's. And then the second one was bigger than the first. Again, you can't see it because of this. So I got in on a little pullback right at the start of this third bar. And it just took off. And I got in at 10 contracts, filled at $2.15. So a little over 2,000, that's about my medium size. And so I just scaled out to where I had one contract left, like right here. And I was like, well, I'm just going to kind of let it ride. And it just kept going up. And I was like, okay, I'm just going to bail on my last contract and the last minute of this. And then it just shot up. And so my last contract, I got out at, so let's go back to my last two. I got in it. I got out at 320 and I had one left. And so I was going to let it ride. It got up to 365. So it went up 45 cents, keep in mind, I got in at 215. So I thought, man, getting that 365 is going to be great. Then it just shot up and it got up to, I mean, let's see. Those up here, there was, I think, let me look here, where it's at now. But I know it was over 10 bucks. It was the 74 calls. So they're currently at $10.55. And that's right here. So probably got close to 11 by the time I got up here. If I'd have waited one more minute, this would have just exploded for me. But you can't predict that. But man, and when you get caught in one like that in favor, that's awesome. So great trade there. Apple. So Apple had a mighty 90 short right here. So it pushed up. I got short right here. And then I got out before this, this one closed because everything started ripping and I'm like, this is setting up to be like an upside continuation runner. And so I got out, it finished red. And then immediately after I got out, phew, popped up. So great out there. Square. So square. It had a mighty 90s, same time as Apple, but I didn't. I was going to get in and then I saw this bar getting as big as the first. So when it pulled back to here, I got long. And then when it came down to this pivot, I added to it. And then it just, so I got in at $1.20. My first time in right here. So I did 20 contracts. That's a little over $2,000. Easy math. And then I added it at $1.07. So when I added, I wasn't, you know, I don't get up to 20, 30 contracts, 40 contracts much when I'm day trading. But so I was a little hesitant. So I only went, I only went in 10 when I added instead of another 20. So I was like, okay, market strong. It's coming down this pivot. So I had 30 contracts. Well, it pushed back up. I got out of half. And then I just kind of wrote it up. And I just got out of one every, oh, about 10 cents. And then I had eight contracts left when it started this. I got out of the live stream somewhere around here. And I said, you know, if it pushes through the pivot, I'm out. And so I just held held my eight contracts. And then when it popped up to here, I just cut it. So it just wasn't going very, wasn't going very far. So that's how I got $1,005 on this. Just great trade right there. Finally, goog. So goog see. Okay. So in goog, I got long goog right here on this little pullback. Okay. Everything was really taking off and goog hadn't really took off yet. You can kind of see it had a nice push came down yesterday's high push back up. But everything I was seeing at about this time was pushing up. I got in at $1.81 right there, 12 contracts and just wrote it out. And I got rid of my last one right here. So I mean, I could have, I could have kept one open. I mean, I just, I thought, man, there's gotta be a pullback soon. So I just closed, I was down to one contract left. So, you know, I didn't want to set through any type of like consolidation. I ended up pulling back and then taking off again. But anyway, so that was a good trade there. And so that brought me to 2228.  So I'll be back tomorrow. Hopefully keep this momentum going. Talk to you later. Peace.


Hi Sonali, so what are the trends you see at at Cannes this year? What what are the conversations you've been listening to? The one thing that I will take away from Cannes this year is really the conversation on diversity and inclusion no matter whether you're talking about whether it's about women, whether it's really about people who are non-binary in terms of gender Black, race, caste, you name it, you know the conversation is really about inclusion and the number of films that we saw the number of the amount of work that we saw in different aspects of diversity That's what I'm going to take back. In fact, the one that really struck a chord with me was set the work free which is really about how do we as creators of work not just as clients but as agencies do we really ask the questions about how we are choosing who we are choosing to work with. One statistic that will stick with me is that only four percent of the work is actually done by women and that's something that I'm going to take back with me as work to do and really push the cause and push the change to have more inclusion in who we work with as clients particularly for Proctor but also wherever I can really talk about it Thank you


So we gave some examples last week of how we can use hash functions for providing authentication. Now when I say authentication, in fact we're doing two forms of authenticating. We're authenticating the user, checking the data came from the right user, and we're also sometimes authenticating the data. Making sure the data that's received is the same as what was sent, which we also call data integrity. So in fact the techniques we're looking at usually provide user or source authentication as well as data integrity. And we finished mentioning some properties, some properties that we need for the security of hash functions. In fact we'll see later there's a table that shows that depending on where we use hash functions they don't always require all these properties. So there are three main properties for security. The one-way property also called pre-image resistance. Weak collision resistance or second pre-image resistance, that is the first two, it's a bit confusing the names. We'll see that breaking the one-way property and weak collision resistance you use the same techniques, so there's similarities there. We'll see second pre-image resistant and second pre-image resistant. They're very similar. And strong collision resistance or simply called collision resistant is the third property. So let's try and make those three properties clear and understand which ones are hard for the attacker to break to defeat. So if a hash function has these properties what does the attacker need to do to defeat the security of that hash function? Just in summary we said one-way property is that with a hash function if we can calculate the hash of some message it should be difficult to go backwards, the inverse operation and given the hash value it should be difficult to find that message. That's the one-way property. Difficult computationally infeasible. That is with large enough values particularly the hash length it will take too long no matter what compute resources you have. The weak collision resistant or second pre-image resistant property is that if we have some message x and we know the hash value of it, the hash of x, it should be hard for an attacker to be able to find some other message y which has the same hash value as the hash of x. So given x the challenge for the attacker is to find another message y which has the same hash value that is h of y equals h of x. Of course we cannot use the same messages. They have to be different messages. So we would say a hash function has this property if it is computationally infeasible for an attacker to do this, to find this other message. And the third property collision resistant or strong collision resistant similar to the previous one it should be difficult for the attacker to be able to choose any pair of messages x and y which have the same hash value. So the attacker they get to choose of any two messages that they like, x and y and it should be hard to find any two messages that produce the same hash value. Whereas in the weak collision resistance that's a different condition and that the condition on the attacker is that given some message x find another message with the same hash value. Which one is easier for the attacker to attack or in other words which one is harder to provide in hash functions the second one is strong collision resistance. And although the mathematics is not the same the concept I will try and explain using a different problem which has similar characteristics which is called the birthday paradox. And you don't need to understand the details or the calculations of this birthday paradox let's spend five or ten minutes explaining it to demonstrate these. Why is one to one mapping not a requirement? What do you mean one to one? One to one. So your question is about a one to one mapping given a message m take the hash of that and we get let's say lowercase h what do you want a one to one mapping from well in fact we see we have two different requirements which are somewhat conflicting first note that our practical requirements are that the input can be variable size and the output is normally fixed and typically small that is the length of the hash value is fixed for a given hash function we always get the same length hash value but normally we'd like to take any size input I finished with a demonstration last week showing I can take a hash calculate the hash of a file so if the hash is say a length of 128 bits and the message is longer the message length can be larger than 128 bits then of course we're going to have multiple messages mapped to the one hash value so we will not have a one to one mapping there because if the message for example is a thousand bits in length larger than the hash value then there's two to the power of one thousand possible messages and two to the power of 128 possible hash values so multiple messages must map to the same hash value so this says that there'll be a many to one mapping here but that goes against our properties or makes it difficult for our properties because we would like a one to one mapping but we cannot have a one to one mapping it means that it still must be difficult to find a mapping that goes to the same hash value to find this collision so even though there will be collisions some messages will map to the same hash value the security of the hash algorithm depends upon how difficult it is to find a collision in theory there are collisions but how much effort does it take to find a collision and that's what these properties are about they're computationally infeasible we know it's possible in theory but it should take a lot of effort a lot of computation to find it and we'll see when we get to the end of here the security doesn't depend upon the message length it in fact depends upon the hash length the longer the hash the more effort required to find a collision so we don't have a one to one mapping we would like one but in practice we cannot now let's try something completely different who, how many people do we have here not a full class for sure of the 20 or so people so we've got about 20 people in the room what's the chance that one of you have the same birthday as me not the birth year, that's a low chance but the same date, day and month just consider days and months well how would we calculate it so assuming everyone has an equal distribution or a uniform distribution of birthdays that ignore twins and so on so the day that you're born on it can be from between 1 and 365 there are 365 days to choose from forget about leap years so a question is what's the chance that one of you have the same birthday as me or as another person well how would you calculate that well consider what's the chance so of the 20 here if there's what's the chance of one person having the same birthday as me well let's say my birthday is on the the 1st of January it's not then the other person their birthday can be on one of 365 days and the equal chance to be on any of those days so the chance of them having the same birthday well the way to think about it is the chance that they don't have the same birthday the probability that someone doesn't have the same birthday as the 1st of January is what so probably they don't have the same birthday there's 364 days which they won't have the same birthday out of 365 so the probability that someone doesn't have the same birthday as me or as the 1st of January is 364 out of 365 and the probability that they do is 1 minus that which is 1 minus 364 over 365 that's the probability that one person if choose from just one other person that we don't this is the probability that we do have the same birthday which is 1 over 365 now there are more than one person in the group there are 20 of you so you can expand that what's the chance that of two people neither of you have the same birthday as me well similar approach what is it it's the chance that one person doesn't have the same birthday and the chance that also the second person doesn't have the same birthday as me or the same birthday as the other person okay so of three people in the group me and two others what's the chance that the first one doesn't have the same birthday as me and then the second one as well okay and now expand it to 20 people and without wasting time on writing it down I have an equation in fact we end up as here so the chance that one person doesn't have the same birthday as me is 364 over 365 and the chance that a second person is also 364 over 365 so 364 over 365 multiplied by 364 times 365 so with n people the probability that no one has the same birthday as me is 364 over 365 to the power of n and hence the probability that someone does have the same birthday they don't is 1 minus that so this is given some birthday x what's the chance that of a group of n people that one of them has the same birthday as me alright we'll see the significance of this value or this equation shortly it's described there with a more detailed example where's my pointer so going back just considering 2 people quite simple I've got a birthday on the 1st of January probability that the other one does not have the same birthday as 364 over 365 if there were 3 people in the group if I've got a birthday on the 1st of January the probability that 1 of them doesn't or person a does not have the same birthday is 364 over 365 and the probability that b does not have the same birthday as me is also 364 over 365 hence the probability that neither do a nor b does is multiplication of those two probabilities and you'd expand that that's for 2 people that's 364 over 365 squared and with n people it's to the power of n the probability that no one has the same birthday as x and the probability that therefore that someone does is 1 minus that now a different problem of the 20 people in the room what's the chance that 2 people have the same birthday any 2 people have the same birthday do you think it's greater than the previous case so if n is 20 for example 20 people if someone has the same birthday as me would calculate 1 minus 364 over 365 to the power of 20 we get some number what if we ask a different question what's the chance that any 2 people in the room have the same birthday do you think the probability will be higher or lower would not be the same what's the chance that of this group of 20 people that 2 of us have the same birthday is it higher or lower than the previous one is the probability higher or lower than this let's try, let's vote hands up for higher hands up for lower anyone hands up for don't know let's see and the mathematics is harder but so we will not try to demonstrate on the board but let's just see let's use the same approach so now the probability that any 2 people have the same birthday it's 1 minus the probability that no 2 people have the same birthday so if you take a pair of people a pair a pair and the chance that they don't have the same birthday and we do that in all cases then it's 1 minus that so now what's the probability that no 2 people have the same birthday first consider a group of just 2 people if one of them has a birthday on the 1st January then the probability that the other person does not have a birthday on that same day is 364 over 365 that's same as before what if we had 3 people in the group well if one of them has a birthday on the 1st of January probability that one of the other ones, user A, does not have the same birthday is still 364 over 365 and the probability that B, the third person does not have the same birthday as the first one or the second one is 363 over 365 that is I have a birthday on the 1st of January, the first person the chance that they don't have the same birthday as the 1st of January is 364 over 365 there are 364 other days and then the third person the chance that they don't have the same birthday as me and that other person is 363 out of 365 because I have the birthday on the 1st of January the other person if they have a birthday on the 2nd of April then the chance of the third one does not have a matching birthday there are 363 days left so for that second person the chance is 363 over 365 and if we expand that group now that was n equal to 2 n equal to 3 n equal to 4 we'll see the pattern it's 364 over 365 multiplied by 363 multiplied by 362 and so on and in general we can expand that out and simplify and it becomes some factorial 365 factorial over 365 to the power of n times 365 minus n factorial that's the probability that no two people have the same birthday so here it's slightly different the third person cannot have the same birthday as me or the other person and that's why we got that case of 363 over 365 and then the probability that any two people have the same birthday as 1 minus what we just calculated now to make sense of equations here's a plot where of those two equations with different values of n down the bottom the red line is the first one given the way to read this plot is if there are 20 people in the group a group of 20 people n equals 20 then the probability that someone has the same birthday as me is here what's that about 0.05 about 5% chance that someone has the same birthday as me the blue one is the second case the probability that any two people have the same birthday so we take the 20 people here what's the chance that a pair of people have the same birthday it's getting close to 40% chance much higher that is the chance that two of you have the same birthday than the chance that someone has the same birthday as me we've got more degrees of freedom we can choose in that case so the red one is the first case and the blue line is the second case and we see that the probability of any two people having the same birthday is much higher than someone has the same birthday as an existing person why are we talking about birthdays similar concepts to the weak and strong collision resistance remember weak collision resistance is the chance that the attacker can find another message with the same hash value as a given message that's like the first case like the red one here the probability of doing that for finding a collision here we're finding collisions of birthdays on the same day with hash attacks against hash functions we're trying to find collisions of hash values the probability of finding a collision given some message find another hash value is not the same as but think about the red line whereas strong collision resistance is the attacker can choose any two messages find a collision we can have any two people's birthdays find a collision the probability of that is much higher the chance of an attacker finding a collision with weak or if they're given some message that is weak collision resistance property is much lower than the chance that they'll find a collision if they can choose any two messages so which one is more secure or it may be easier which of the two properties strong or weak collision resistance is it easier for the attacker to break strong collision resistance there's a higher probability that they'll find a collision the blue one given the same size n there's a higher chance that they can find a collision if they'll be able to choose from any two messages so if they say strong collision resistance it is easier for the attacker to break that or another way to look at it it's harder to provide that property it's harder to make sure that it's impossible practically impossible for the attacker to find a collision that satisfies that property it's easier to provide the weak collision resistance property the mathematics is not identical but the concepts are the same as the problem the birthday paradox it's much higher chance that any two people have the same birthday than that one person has the same birthday as some given person so coming back to here some hash functions may have the weak collision resistance property that means it's practically impossible for the attacker to find another message with the same hash value but they may not have the strong collision resistance property even though it's practically impossible to find some other message with the same hash of X it may be practically possible to find any pair of messages so providing this property in hash functions is harder than providing the weak collision resistant property if your hash function has the strong collision resistant property in fact it also has the weak collision resistant property but some hash functions have weak collision resistance but not strong collision resistance any questions before we compare the amount of effort required to break them so try and distinguish between weak and strong collision resistance you don't have to understand the mathematics of the birthday paradox just be able to compare them understand if you're the attacker which one's easier for you to attack let's go to still on this topic which properties do we need well it depends on what we use a hash function for so there are different hash functions available we mentioned I think one or two last week MD5 is one SHA the secure hash algorithm is another hash function what properties should a hash function have of those three that we've listed of these three pre-imaged, second pre-imaged collision resistance or one way weak collision, strong collision resistant it depends on what you're using the hash function for here are some examples and we'll not go into the details if you're using a hash and providing some digital signature trying to confirm that this message came from a user then it should have all three properties if you're using hash functions for detecting viruses so not about encryption but about detecting a virus then it turns out that usually you just need the second property, weak collision resistance a hash function that has this property is sufficient it doesn't even have to be one way property you've used or you've seen hash functions in PHP and you can apply the hash function on a password to store in a database for example and we'll cover that in another topic so when we take a hash of a password the collision resistance is not such an issue it's mainly about having the one way property or pre-imaged resistance that's the desired property for password storage so it depends upon what what you're looking for as to what properties are needed for security how do we break hash functions well a brute force attack and the one way property and weak collision resistance also called pre-image and second pre-image properties a brute force attack against them the basic approach is you try all possible values you need to find some message that produces some given hash value so a brute force attack is to try all possible message take some message m1 calculate the hash is it the hash value we're looking for if not try the next message m2 calculate the hash and is it the hash value we're looking for and keep trying until we get it so try all possible messages it turns out that if you try messages randomly the amount of attempts that you need to find a collision to find the right hash value is proportional to the length of the hash value if we have an m-bit hash code for example the length of lowercase h here is m bits then approximately 2 to the power of m attempts are needed until you find a collision or you find the hash value so going back that's for both of these properties a brute force attack for example weak collision resistance what we're doing we know some hash value we know the hash of x we need to find another message y which has the same hash value so what we do is we choose some random message y calculate the hash does it match the hash of x if not try another random message keep trying and on average you take 2 to the power of m attempts where m is the length of the hash value it's not dependent on the message length it's dependent upon the hash length so if our hash length is 128 bits for example md5 is a hash function if it's a 128 bit hash value then we need 2 to the power of 128 attempts about equivalent to 128 bit key in terms of the amount of effort needed to break that that is 100 the same number of attempts but with the strong collision resistance property it's easier it's easier for the attacker to find any two messages with the same hash value and the amount of effort required is approximately equal to 2 to the power of m on 2 half the hash length in our case if our example hash length is 128 bits the amount of effort is 2 to the power of 64 much much less that is if we're trying to break the strong collision resistance resistance property and the hash length is 128 bits a brute force attack would take about 2 to the power of 64 attempts but if we're trying to break the one way property or the weak collision resistance property then a brute force attack would take about 2 to the power of 128 attempts much much longer so if we want to provide if we need a hash function for a digital signature if we want to provide all three properties that means the hash length must be long enough that the number of attempts cannot be made in reasonable time and 2 to the power of 64 attempts is nowadays considered not is considered possible to try so generally we need larger hash lengths 2 to the power of 64 is in theory possible to attempt 2 to the power of 128 is not so if we had a 256 bit hash value it would take 2 to the power of 256 attempts on the first two properties and 2 to the power of 128 attempts on the third strong collision resistance property that would be considered secure for a brute force attack now for a password storing a password if we need a hash function the main property we care about is the one way property we don't care about strong collision resistance so having 128 bit hash value is sufficient in that case because the attack would still take 2 to the power of 128 attempts we don't care if someone can break the strong collision resistance property in this case it's not required for security it depends upon what the hash value is useful the hash function it's easier to break to do a brute force attempt against the strong collision resistance property than against the other 2 properties that's a brute force attack there may be other attacks that take advantage of the algorithm design so brute force can be applied against any hash algorithm but if you know the hash algorithm and you can find weaknesses in the algorithm maybe you can provide some other more intelligent attacks and there are some attacks possible in theory but they're quite complex and we're not going to look at individual hash algorithms nor different attacks but generally they're not much better than a brute force attack for example there's an attack on the 128 bit md5 takes 2 to the power of 60 attempts well that's less than 2 to the power of 64 but not much so 16 times less is not much if we don't save much by cutting down char which has different variations but we'll mention shortly is one hash function and generally the attacks against some variations of the secure hash function char are considered infeasible not possible so the security of hash functions is mainly measured upon the hash length let's finish with just two mentions of two common hash functions which are in use md5 the message digest algorithm developed by one of the guys who developed rsa on revest the hash length is 128 bits it was and in fact is still commonly used you'll see it in different applications still use md5 but it's considered weak the hash length and there's some attacks that make it possible to find collisions so it's considered weak and not recommended for use anymore but you'll still see it in use you may see it when you download files from websites for example you download an ISO of a Linux operating system then maybe also the website lists the hash value why? when you download the file you want to make sure it's exactly the same as the one that was published by the person who created it so they also published the hash value when you download the file you calculate the hash value if it's the same as the published one then you're quite certain that the received file is the same as the one that they published if the hash value is different the md5 value is different then maybe the file didn't download correctly and you shouldn't use it so md5 is still in use but not recommended and the replacement algorithm, the one that the US national institute of standards and technology developed with this secure hash algorithm in fact it has different variants char0 or char1 char2 and so on some of them are listed here and in fact it's not just char1 but and it indicates the length of the hash value char1 had a 160 bit hash value it's called the message digest size in this table but the output md5 128 bits, char1 160 bits then there's char224 256 so you can have different length hash values using the similar algorithm just different length outputs and the rest is about the details of the algorithm which we're not going to cover char1 is no longer recommended char2 or the ones that say 256 bit hash values are recommended and in use widespread use the same organization also has been developing the newer version, char3 and in fact they had a competition that ran for 5 or 6 years people submitted their algorithm and I think October last year so 2 or 3 months ago they selected one algorithm out of 60 or so different algorithms to become the new char3 I don't recall what the hash length is of this new algorithm but it's char2 is still considered secure it's just that they want to plan for the future and they have another one and there are others so they're just two common ones MD5 and char and there are others as well we're not going to go through how they work brings us to the end of what we're going to cover about cryptographic hash functions we're going to still talk about authentication in the next topic before we move on everyone's clear about collisions collision resistance and how to attack them how secure the different properties are that's the hardest part that people find in this topic strong and weak collision resistance confuse people one way to think about the strong and weak collision resistance if you have a hash function that provides the weak collision resistance property but not the strong collision resistance property versus then maybe we could say that that hash function is weak another hash function which provides both weak collision resistance is stronger than the first hash algorithm so one that provides strong collision resistance versus one that does not the one that provides strong collision resistance is stronger than the other one if we can provide the strong collision resistance property we consider that a more secure algorithm because it's harder to provide that property it's easier to attack that's what now when we say we provide that property that property says it's impossible to attack so if a hash function provides strong collision resistance it means it's impossible for the attacker to break it so if it's possible for the attacker to break it then that property is not provided I think last week we showed some quick examples on the screen of calculating hash before we move on any questions if we say if a hash function provides that property if a function has the property of strong collision resistance that property says it's practically impossible to break that it's practically impossible to find a collision by selecting any pair of messages it's so if a hash function say we have a hash function we need to check if it has the property or not we've got two hash functions then if it doesn't have the hash have that property then it's easier to attack to break the to find a pair of messages that have a collision but once it has that property by definition the property says it's impossible to break if it doesn't have this property well let's say a hash function didn't have either of these properties weak or strong collision resistance if a hash function did not have either of these properties you were an attacker what would you try you would try just choosing any pairs of messages because you know that you'll find a collision first so if you want to find a collision try and choose any pair of messages that will find a collision or more chance of finding a collision then given some message choose find another message that causes a collision but once say we have some hash function that this property is true it holds that means an attacker will not be able to find a collision it would take too much effort think about those try and get your head around them we may come back to them after our break if you have further questions confusing isn't it okay pre-image pre-image is the let's go back to our slide where we say what is the pre-image the pre-image is the original message that's just the terminology we use so the pre-image of H is the message X the message that produced that hash value so X is the pre-image of H H is the hash value X is the message pre-image resistant means that given H it's impossible to find the pre-image okay given a hash value of H the message X is called the pre-image of H the property called pre-image resistant or the one way property is this property that given H it should be impossible to find its pre-image it should be impossible to find the message that produced H that's the pre-image resistant property or if we think of it in the normal hash functions the one way property our hash function should go one way but going from the hash value back to the message should be impossible the second property this weak collision resistance is about finding collisions that's why we call it a collision resistant property if this property is true if it holds then our hash function is resistant against collisions it's impossible to find collisions and it's the same with the third property if this property holds then our hash function is resistant against collisions it's impossible to find collisions but certain types we distinguish between them in the first one we said given X impossible to find some other Y that produces the same hash value it's impossible to find that collision if that property holds and the second one given you get to choose any pair of messages it should be impossible to find a collision if you can choose from any pair of messages does that answer your question about pre-image so pre-image is just meaning the message that produced the hash value I see people still brains are working that's okay again second pre-image resistant is just another name for weak collision resistant so just two different names for the same property if a hash function if we say it has this property of second pre-image resistant or weak collision resistant it doesn't necessarily mean pre-image resistant I think if you look in I don't have it but there's a picture in the textbook that shows that hash functions do not have to have all of these properties a hash function but a hash function that is strong collision resistant is weak collision resistant a hash function that is weak collision resistant isn't necessarily strong collision resistant isn't necessarily one-way property yes yes if it has strong collision resistance it turns out it also means it's weak collision resistant yes in what cases are strong collision resistant better than weak collision resistant when, or maybe the question when do we need strong collision resistance that may come out here and it gives us the second column here second pre-image resistant is weak collision resistant and this is strong collision resistance so for a digital signature weak collision resistance is necessary because it should be hard for the attacker to find some other hash value which is the same or it's another message which gives us the hash value which is the same as the sent message and the note says down here we also like the strong collision resistance property if it's possible for the attacker to choose the original message let's go back to the digital signature diagram look at the top diagram remember with the digital signature what we do, we take a message we take the hash of the message send, encrypt that with the private key of the sender that is they're signing it and send the message and that encrypted hash across the network and what the receiver does is they check they verify the signature by taking the message and a hash of that message same hash function and decrypting the signed part using the public key of the sender and if they match they trust the message they have verified the signature and if they don't match something's gone wrong now what can an attacker do what the attacker may want to do is let's see what happens if we have different properties we have sent the message concatenated with the encryption using the private key of A of the hash of that message that's what's sent across the network that's in the middle part here let's say the attacker intercepts that and they they want to modify the message but they want to get the receiver to think that it's still signed by the original user they want to fool the receiver so what if they modify the message they intercept and then send M prime M prime and they don't modify the signature of the rest they send M prime and E PR of A hash of M so all they do is change M the sent message to M prime their own message what does the receiver do the receiver takes the hash of the received message M prime decrypts this part and they get the hash of M and they compare it against the hash of M prime and our weed collision resistance property in our hash function they should not match because it should be if our hash function is weed collision resistance it should be impossible for the attacker to find another message M prime that produces the same hash value of the hash of M so if our hash function is weed collision resistant that means the attacker cannot find another message where the hash of the other message equals the hash of the original message the attacker has M their challenge is to find another message M prime which produces the same hash value as M if they can this scheme would fail because if the hash of M prime does equal the hash of M the receiver would try to verify the signature and everything would be okay the hash of M prime they get that here they decrypt the signature and they get the hash of M they compare the hash of M prime and the hash of M and they would be the same if we didn't have the weed collision resistance property so that's why we need the weed collision resistance property for our digital signature if we didn't have it the attacker could modify the message the attacker could find a message with the same hash value as the original and simply modify it not have to modify this part just modify the message and the receiver would be fooled into thinking that it was signed by user A so we do need weed collision resistance property for digital signatures do we need strong collision resistance well remember weed collision resistance if we give an M try and find another M with the same hash value strong collision resistance the attacker gets to choose M and M prime any two messages when does that happen that would happen if somehow the attacker could get the sender to send a message that the attacker chose if the attacker chose M and signed it and sent it then the attacker needs to find some other M M prime with the same hash value which is this attack against the strong collision resistance property that is if the attacker can choose the original M and also choose M prime then that's the challenge of you get to choose any two messages and try and find a collision choose two messages which produce a collision that's easier for the attacker so if the attacker can choose this message then for this to be secure the property of the hash function should be that it is strong collision resistance if the hash function is not strong collision resistance and the attacker can choose the original message and of course they can also find another message with the same hash value then they will fool the receiver into thinking that the message came from A when it came from someone else in some cases the attacker may be able to choose the original message in some cases they may not in the slides it's called it's a chosen message attack the attacker somehow gets to choose the message that was sent that's for example I'm sending a message to the director about changing grades of students I choose the message normally and I sign it so I choose M and I sign it with my private key and send it well if somehow you can get me to choose if you can get me to send a message of your choosing so somehow you have a message and I sign it using my private key and send it then that's a case where you as the attacker got to choose the message and there are some special cases when that may occur it's not so common but in some cases it will occur where the attacker can control what the sender is sending as the message so in some cases we need strong collision resistance some cases for digital signatures we just need weak collision resistance we definitely need weak collision resistance I think the textbook and it's a bit more detailed than what we have time to go for but there's a good example in the textbook of how does a user in practice get someone to generate a message M and then make it easy for that attacker to find some other message and hence break such a signature scheme there's an example of how to generate many possible messages by many 2 to the power of 60 or so different messages and it's not so hard in fact that the attacker if they can get the user to create a certain message they can find another message with the same hash value it is possible in some conditions okay any further questions about hash functions what have we got in the last 10 minutes before we start the next topic which is still on authentication let's look at one example of something different rather than starting let's look at an example of some of our algorithms we've mentioned so far in use this is a a wire shark capture from secure web access I'll only show a few packets here but what I did in this case I accessed a website using HTTPS you've used it in a number of cases when you access a bank or some secure login in some cases in fact when you log into Moodle for the quiz that login page requires you to use HTTPS and we'll mention that in another lecture but basically is using HTTP on top of some secure transport protocol so that the data that you send to the server is encrypted let's scroll down and find some packets this is when we start the green ones above we're using normal HTTP this is the case using real HTTPS we set up a TCP connection SIN SINAC and then before we send the request to the web server so you know with HTTP you send a get request to the web server the web server sends a response yes before we do that we set up a secure connection between your client, your browser and the web server and the protocol for doing that is called TLS transport layer security client sends a hello message and inside that hello message is many details but one of them that we see the client informs the server as soon as it supports so this is just setting up so what we need to do is when I connect to the web server we need to be able to encrypt our traffic encrypt SIN data use hash functions so what algorithms do we use so these hello messages are just for the client and server to inform each other what algorithms they support and they'll choose one and the cipher suites here so this is the client saying I support these different combinations and you don't have to remember all of them but TLS is the name of the protocol and then we see the way to read it in this selected one let's go from the back it's easier this is the hash algorithm that's going to be used so when we sign things when we perform authentication we need a hash algorithm what hash algorithm in this case char is the hash algorithm that's what the client offers to use char we're going to encrypt data with symmetric key cryptography when we encrypt our data normally for sending to the web server and the web server sending back we use symmetric key cryptography because that's faster than public key cryptography what algorithm AES and CBC is the mode of operation so that's what the client offers for data encryption and then there's two other parts and these two there's the way to exchange a key to exchange a secret before we can encrypt data both the client and the server need to know some secret because to encrypt data with AES we need a secret key and then there's that secret key where we can use an algorithm to exchange a secret in this case there's a variation of the Diffie-Hellman secret key exchange algorithm it's called elliptic curve cryptography Diffie-Hellman exchange so we would use Diffie-Hellman a variation of Diffie-Hellman to exchange a secret between client and server to sign any data we would use DSA DSA is an alternative to RSA for signing information so as we've seen we sign with some private key well DSA just a different algorithm than RSA so we select an algorithm for exchanging a key exchanging a secret for signing an authentication for data encryption the mode of operation and the hash algorithm so normally we need algorithms for all of them so signing uses a hash algorithm signing can use here we signed we used an encryption operation here what algorithm in this case we would use DSA we also used a hash function what algorithm and in fact the client supports many different sets of algorithms RC4 is supported Camellia is an alternative to AES Diffie-Hellman instead of the elliptic curve Diffie-Hellman just plain Diffie-Hellman RSA instead of DSA so different algorithms are supported by my Firefox browser and the server sends back a reply server hello and in there it contains where is it it contains what it selects so the client says I support all these algorithms the server chooses one based on what the server supports and what the client supports and in this case the web server chose this one SHA is the hash algorithm AES 256 bit key with signing is the mode of operation and the symmetric key encryption and in this case it uses RSA and it uses RSA for the secret key generation and also for the signing so it uses the same algorithm for both operations so that's just an example that in practice for network communications we make use of all of these algorithms symmetric key encryption public key encryption for signing for authentication hash functions, modes of operation and then there's a few more messages to exchange then eventually we start sending data and it's encrypted you know when you capture HTTP you can see in Wireshark the GET request if you look in these packets you will not see the GET request you'll just see random looking characters so we set up the encryption and then we start encrypting the messages using AES in this case we may show another example capture at a later stage and return to the details of the protocol in a different topic let's stop there and for those that haven't collected their quiz you can do