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Presentations by Waseda Fellows and Meeting of the Steering Committee

May 9, 2024

On March 22, 2024, Waseda University held its annual meeting of the Sylff steering committee and heard presentations by two Waseda fellows on their recent research and social engagement activities.

The gathering, held at Waseda’s campus in Tokyo and attended by members of the Tokyo Foundation for Policy Research (Sylff Association secretariat) as well as the university’s faculty and administrative staff, was the first in four years to be held in person following the outbreak of COVID-19.

War and the Okinawan Diaspora


Participating online from Mexico, Lima Tokumori, a 2023 fellowship recipient enrolled in the Graduate School of Social Sciences, presented an interim report on “Uchinanchu Concepts: Militarization and Ethnicity as Seen in the Cases of Okinawan Immigrants in the Philippines, Peru, and Hawaii.”

Her doctoral research seeks to examine the historical impact of militarization on the Ryukyuan-Okinawan diaspora—who identify themselves as Uchinanchu. She used her fellowship last year to conduct fieldwork around US military bases in the Philippines and Okinawa. She reported on the importance of carefully building trust with her interviewees in getting them to provide detailed information, including on such sensitive subjects like gender and war.

In addition to writing her dissertation, Tokumori is currently involved in various other activities. She volunteers her time for the Business and Human Rights[i] project of the UN Development Program at its Mexico office and undertakes human resources development and administrative duties for the annual event to read aloud the names of all war victims in the Battle of Okinawa. Her plans for next year include conducting fieldwork in Peru and collecting materials in the United States. She hopes to pursue a career in the United Nations.

Empirical Analysis of Workplace Health Measures


Ritsu Kitagawa of the Graduate School of Economics, who received his fellowship in 2022 and 2023, meanwhile, presented his final report on the “Empirical Analysis of Health Management: Verifying the Effectiveness of Health Support Measures in the Workplace.”

Japan’s declining birthrate and aging population are compelling many companies to give greater attention to making sure their employees remain healthy and active so as to ensure a stable workforce. Kitagawa’s doctoral research aims to quantitatively verify the effectiveness of various health-related workplace measures and to identify best health-management practices.

One of his findings was that supervisor-directed overtime significantly raised stress levels and the likelihood of such physical ailments as headaches, stiff shoulders, and back pain among male employees hired for their expert skills. He also found that metabolic syndrome risks can affect male and female employees differently, with women often gaining weight and men growing slimmer. These results suggest the need for corporate health measures that are customized for gender and career track. Kitagawa has been sharing his findings at various workshops and conferences and advocating for more nuanced workplace policies.

He has also verified the usefulness of app-based health promotion programs and is promoting their use among various companies. He himself has developed an app for LINE that female employees can use and is working for its broad dissemination.

He reported that the two-year Sylff fellowship enabled him to expand his research activities through purchases of research equipment, implementation of questionnaire surveys, and participation in overseas conferences, as well as facilitating research-related social engagement activities.

Ritsu Kitagawa (third from left), SSC chair and Waseda professor Shinji Wakao (fourth from left), SSC member and Waseda professor Kazuyuki Sasakura (second from right), and members of the Sylff Association secretariat.


The Tokyo Foundation expressed its deep gratitude to the Waseda Sylff steering committee for its smooth program operations and effective fund management, as well as for the selection of outstanding fellows and its longstanding cooperation with the Sylff program.


[i] The UNDP’s Business and Human Rights (B+HR) project is supported by the governments of Japan, Sweden, and the European Union. In Mexico, it works to strengthen human rights due diligence among Japanese companies operating locally and along their supply chain.

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An Online Orientation Meeting for “Pedro Arrupe” Fellows

May 7, 2024

On April 9, 2024, the Institute of Political Education “Pedro Arrupe” held an online orientation meeting with members of the Sylff Association secretariat. The meeting was attended by six Sylff fellows selected in academic years 2023 and 2024.

Participants included Sylff Steering Committee Chair Massimo Massaro (middle row, left); Sylff fellows Enza Maria Macaluso (top row, right), Flavia Monfrini (middle row, center), Francesca Barbino (middle row, right), Ugo Giarratano, Vincenzo Buffa, Alberto Piacentini (bottom row, left to right); and Sylff Association secretariat members Executive Director Mari Suzuki (top row, center, left in frame), Director Keita Sugai (top row, left), and Program Officer Konatsu Furuya (top row, center, right in frame).

The Sylff program at the institute is called the Idea-Action Research Program and is a framework for young researchers to engage in scientific research geared toward making concrete social contributions, particularly in Sicily, where the institute is located.

The orientation meeting began with opening remarks from Massimo Massaro, chairperson of the Sylff program at the institute, and Mari Suzuki, executive director of the Tokyo Foundation, who both touched upon the value of the program in developing socially engaged leaders. The six fellows then introduced their respective research topics.

Ugo Giarratano explained that he is exploring the panorama of social exclusion and urban marginality in contemporary society; Flavia Monfrini said she seeks to identity narrative processes in the inland areas of Sicily; and Alberto Piacentini described his studies into the nature, evolution, and legal protections from domestic abuse and gender-based violence.

Vincenzo Buffa, meanwhile, presented his analysis of the governance models of community foundations in the territory of Palermo; Enza Maria Macaluso said she is developing practical and theoretical models of participation in Sicily’s inland communities, starting with an experimental, participatory path based on the Philosophy for Communities (P4C) method; and Francesca Barbino noted she is exploring how children may participate in co-designing public policies on comprehensive sexuality education.

The orientation meeting was a great opportunity to get to know the new “Pedro Arrupe” fellows and to hear directly from them about their research topics, which were inspired by their desire to contribute to the well-being of the people and communities of Sicily. We are very happy to welcome the six fellows into the Sylff community and wish them great success in advancing their research and social engagement initiatives.

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Women’s Empowerment in Japan: From Tokenism to Critical Mass?

April 19, 2024
By 21688

A decade ago, then Prime Minister Shinzo Abe announced a policy aimed at promoting more women to leadership positions in Japan—a country that has long ranked near the bottom in the Global Gender Gap Index. The pace of progress since then, though, has been embarrassingly slow. Thanh Nguyen (Waseda University, 2014) used an SRG award to analyze corporate data over the past decade to identify where improvements have been made and what more needs to be done to enhance women’s boardroom presence.[1]

*     *     *

In spring 2014, then Prime Minister Shinzo Abe made a speech on “A New Vision from a New Japan” at the World Economic Forum, stating, “Japan must become a place where women shine. By 2020 we will make 30% of leading positions to be occupied by women.” This led to an increase in the number of female board directors, but Japan still failed to achieve the 30% target by 2020 and had to push back the target date by up to a decade.[2] The situation today is still not promising, as the Global Gender Gap Index in 2023 ranked Japan 125th out of 146 countries; the country has remained near the bottom of the list over the last 10 years. Will Japan be able to reach the 30% milestone by the revised deadline of 2030?

In my research, I gathered updated data about female leadership in Japan from 2012 to 2023. I first measured the impact of recent changes in Japanese policy and law aimed at promoting the appointment of women to management and leadership positions, focusing on Abe’s “Womenomics” policy launched in 2013 and the Act on Promotion of Women’s Participation and Advancement in the Workplace implemented in April 2016. I examined whether firms appointed more female directors during the policy period compared with earlier periods.

Second, I examined the critical mass of female directors and the firms that succeeded in increasing the number of female directors to this level. Critical mass is defined as the number of female directors needed to affect policy and induce real change. I identified firms as being successful in reaching critical mass if 30% or more of their board members were women—the target figure set by the Japanese government. My main research question was whether gender policies actually helped to increase the number of female directors, especially up to critical mass.

Scrutinizing Womenomics Policies

Many countries have introduced a mandatory or voluntary quota for female leaders to address gender inequality. For example, Norway has a 40% female board membership quota, while Britain maintains a 25% female board membership target. By contrast, the Japanese government promotes female leadership not with a quota but through its Womenomics policy package that encourages large corporations to promote gender- and employment-related policies. In particular, firms have been advised to establish and disclose their action plans to improve gender equality and to disclose relevant data.

To answer my research question, I collected data on the directors at listed firms in Japan from the Yakuin Shikiho (Executive Officers Handbook), published by Toyo Keizai Inc., which includes the name, age, position, gender, place of birth, education, and previous experience of each director. My final sample consisted of an unbalanced panel of more than 40,000 firm-year observations from 2012 to 2023. I then created a group of variables representing the characteristics of the board, including “total number of board members,” “total number of female board members,” “ratio of female board members,” “chairperson gender,” and “CEO gender.”

30% Target Reached by Only Small Minority of Firms

I found that only 9% of surveyed firms had at least one female board member in 2012 but that this figure increased gradually each year, climbing to 63.4% in 2023, with 2,482 out of 3,915 listed firms having at least one female board director (Figure 1). This indicates that many more firms appointed female board directors during the years of Womenomics. The steady uptrend was unaffected by the COVID-19 pandemic.

Policymakers may be happy with these changes in corporate governance and claim that the Womenomics policy package has been effective. The truth, though, may not be that rosy. When I calculated the share of female board members and grouped the firms according to this percentage, I found that the group claiming shares of 30% or higher accounted for only 0.59% of all firms in 2012 and a still very low 4.06% in 2023.

This figure has been increasing gradually each year, to be sure, but the pace has been very slow, and the spread is consequently very small. In 2023, among the 3,915 listed firms, only 159 met the 30% target for female board members. This means that although more firms appointed women to the board during the Womenomics years, the number of appointees has been minimal. If this situation continues, Japan will fail for the second time to reach its target of “30% of leading positions to be occupied by women.”

I also examined the number of women serving as the chair, the CEO, and a board member for each year from 2012 to 2023 and found that there has been no uptrend for either the chair or CEO. These figures fluctuated year on year with a very small change spread. Among the 31,520 board members in 2023, there were only 21 chairwomen and 54 female CEOs. In other words, of the 3,915 listed firms, only 54 firms were headed by women—hardly a robust picture of female leadership in Japan.

Figure 1. Share of Female Board Members, 2012–2023

 

As for board members, in 2012, only 374 of the 26,294 members were women, accounting for a mere 1.42% of the total. If chairwomen and female CEOs are deducted, the total number of female directors in 2012 was 335. Figure 2 shows that even with the jump in the number of female directors from 2012 to 2023, the ratio of female board members was still small. My data shows that in 2023, the percentage of female board members was 10.93% in 2023; in other words, males still occupy 89% of the boardroom. Without fundamental changes, the chances of Japan reaching the 30% target by 2030 appear bleak.

Figure 2: Number of Female Board Members, 2012–2023


I also examined the relative shares of outside and inside female directors. In 2023, outside directors made up 84.33% of the total, implying that firms have tried to increase the number of female directors by tapping human resources from outside the company, appointing such professionals as business consultants, university professors, and leaders of other firms. Indeed, it is easier for firms to appoint a female director from outside the company, since nurturing and promoting female employees to take on management responsibilities takes time.

This pattern highlights another challenge for Japanese corporations: the small pool of qualified female candidates for leadership positions, both inside and outside the firm. Appointing outside female directors is, at best, a short-term strategy, as even the external supply of qualified candidates is small. This is proven by the fact that outside female directors often serve on the boards of several firms. This situation will not fundamentally change until firms begin actively recruiting more female employees and providing them with opportunities for promotion to senior and leadership positions.

Need for Drastic Change

My research was an attempt to provide an overview of women empowerment efforts in Japan over the last decade and to present updated data about female leadership. It led to new findings on the number of female board directors during the twelve years of Womenomic policy (2012–2023).

During these years, corporate governance reforms resulted in more female directors, especially outside directors, being appointed to executive boardrooms, compared with the years before the policy’s implementation. Policies promoting female leadership thus appear to have been effective for listed firms. However, they have had no tangible impact on top positions, like corporate chairs and CEOs. And Japan may once again fail to reach its 30% target without drastic changes over the next six years.

These findings can serve as meaningful references for investors, corporate leaders, and policymakers. There have been calls for stronger measures to promote gender equality both inside and outside corporate settings so that this target can be reached by 2030. Policymakers need to do more than simply ask firms to hire more women and elevate them to leadership positions. And investors, especially institutional investors, must perform their stewardship duties by engaging directly with the companies in which they invest, persuading management teams and board directors to promote gender diversity, which can, in turn, create more sustainable, fairer, better-run, and faster-growing companies.

[1] This is a short English summary of a paper by the author that was originally published in Japanese. The full Japanese version can be found at: https://www.jsri.or.jp/publish/review/pdf/6402/05.pdf.

[2] https://mainichi.jp/english/articles/20200626/p2a/00m/0fp/014000c.


References

Kubo, K. and Nguyen, T. T. P. 2021. Female CEOs on Japanese corporate boards and firm performance. Journal of the Japanese and International Economies, 62, 101163.

Nguyen, T. T. P. 2021. Effects of board gender diversity on firm investment and performance. Waseda Commercial Review, 461, 47-92.

Nguyen, T. T. P. and Thai, H. M. 2022. Effects of female directors on gender diversity at lower organization levels and CSR performance: Evidence in Japan. Global Finance Journal, 53, 100749.

Nguyen, T. T. P. 2024. Nihon ni okeru josei no enpawamento: Tannaru shinboru kara kuritikaru masu e? Shoken Rebyu, 64(2), 115–129.

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Genetic-Level Explorations into the Gut Microbiota

April 12, 2024
By 29989

To analyze the relationship between the gut microbiota and host diseases, Tomoya Tsukimi (Keio University, 2021) used an SRG award to conduct experiments at the University of Tsukuba, where he examined the mechanisms of intestinal bacterial colonization at the genetic level. He eventually hopes to enhance treatment outcomes through the development of personalized medicine.

*  *  *

About 40 trillion bacteria inhabit the human body, the majority of them in the gastrointestinal tract.(1) One place where these bacteria are particularly abundant is our large intestine. These bacteria, collectively known as the gut microbiota, have a lot of genes—even more so than human beings.(2, 3)

The intestinal bacteria form part of a complex ecosystem in the gut as they interact with host cells. Studies have shown that they boost resistance to pathogen infection,(4) affect host bile acid metabolism,(5) help maintain immune homeostasis,(6) and are even involved in brain functions. (7) Furthermore, there is growing evidence of a relationship between the gut microbiota and host diseases—not only digestive disease(8, 9) but also a wide range of systemic ailments like cancer,(10) diabetes,(11) and psychiatric disorders.(12)

The gut microbiota also influences the pharmacological effects of disease treatments.(13) This has spurred the development of methods to control the gut microbiota for the prevention and treatment of disease,(14, 15) such as through prebiotics, probiotics, and fecal microbiota transplantation.

Health Benefits of Probiotics, from BioRender, https://app.biorender.com/biorender-templates/figures/all/t-64400e6d675cf5f619cd17db-health-benefits-of-probiotics.

 

The question my research seeks to answer is, “What factors are important for the bacterial colonization of the host intestinal tract?” Recent studies have shown that imbalances in the intestinal microbiota are associated with various diseases. While fecal microbiota transplantation therapy and probiotics have been used to treat these diseases, studies indicate that exogenous bacteria have difficulty colonizing a patient’s intestines.(16)

Previous studies have discussed intestinal bacteria based on information regarding genus-level composition. But dietary composition exerts selective pressure on not only the species but also variants and substrains within the same species.(17) This points to the importance of studying the mechanism of intestinal bacterial colonization at the genetic level. I have therefore focused on genetic mutations of E. (Escherichia) coli during intestinal colonization in mice. E. coli is prevalent in the human gut as well, and its genetic manipulation is well established.

Identifying Genes Important for E. Coli Colonization

E. coli has approximately 4,000 genes. I examined which genes mutated when E. coli colonizes the mouse intestine and the mechanism by which these genes mutated. I decided to use germ-free (GF) mice, which has no bacteria in their intestines, thus enabling me to clarify the relationship between the host mouse and E. coli mutations.

Unfortunately, the laboratory with which I am affiliated does not have a facility to breed GF mice. So, I conducted my experiments at the University of Tsukuba, a national research university in Ibaraki Prefecture, which has one of the best-equipped animal experiment facilities in Japan. It was thanks to a Sylff Research Grant that I was able to finance my travel and lodging expenses to carry out my research there, so I would like to thank the Sylff Association for giving me this opportunity to advance my studies.

The University of Tsukuba campus.

I have been able to identify the genes that appear to be important for the colonization of E. coli. The study also helped to elucidate the adaptive mechanisms of the gut microbiota. A paper summarizing the results is currently under review for publication in a peer-reviewed, international journal.

Developing a Treatment for Bowel Diseases

Ulcerative colitis and Crohn’s disease are inflammatory bowel diseases that are associated with intestinal bacteria for which effective treatments have not yet been established. There are some 300,000 patients of the two diseases in Japan and 1.6 million in the United States. This study has the potential to more clearly explain the bacterial colonization mechanism, leading to a highly accurate method for controlling the intestinal environment and contributing to the development of a treatment for these diseases.

Although there have been cases of clinical recovery using prebiotics, probiotics, and fecal microbiota transplantation therapy, the success rate varies widely from one individual to another. By focusing on the mechanism of intestinal colonization at the genomic level, the findings of this study can be used to develop methods for controlling the intestinal environment that are specific to the individual. In the future, I hope to contribute to the development of tailor-made medicine targeting intestinal bacteria and to the realization of a society where everyone can lead a healthy life.

I believe this research also has implications for discussions of human traits that are universal and those that are unique. As mentioned above, about 40 trillion bacteria inhabit the human body. This is comparable to the number of human cells. Since bacteria are associated with various diseases, “the human body can be considered a superorganism; a communal group of human and microbial cells all working for the benefit of the collective.”(18)

Studies have shown that bacterial composition and metabolite concentrations in the gut differ among individuals.(19, 20) This suggests that commensal bacteria—those that live in harmony with humans—can be regarded as one factor that distinguishes the self from others. Studies like mine on commensal bacteria may therefore offer clues to such overarching questions as “What am I?” and “What makes me different from others?”

 

References

  1. Sender R, Fuchs S, Milo R. 2016. Revised estimates for the number of human and bacteria cells in the body. PLoS biology 14:e1002533.
  2. Qin J, Li R, Raes J, Arumugam M, Burgdorf KS, Manichanh C, Nielsen T, Pons N, Levenez F, Yamada T, Mende DR, Li J, Xu J, Li S, Li D, Cao J, Wang B, Liang H, Zheng H, Xie Y, Tap J, Lepage P, Bertalan M, Batto JM, Hansen T, Le Paslier D, Linneberg A, Nielsen HB, Pelletier E, Renault P, Sicheritz-Ponten T, Turner K, Zhu H, Yu C, Li S, Jian M, Zhou Y, Li Y, Zhang X, Li S, Qin N, Yang H, Wang J, Brunak S, Dore J, Guarner F, Kristiansen K, Pedersen O, Parkhill J, Weissenbach J, et al. 2010. A human gut microbial gene catalogue established by metagenomic sequencing. Nature 464:59-65.
  3. Nishijima S, Suda W, Oshima K, Kim SW, Hirose Y, Morita H, Hattori M. 2016. The gut microbiome of healthy Japanese and its microbial and functional uniqueness. DNA research 23:125-33.
  4. Ubeda C, Djukovic A, Isaac S. 2017. Roles of the intestinal microbiota in pathogen protection. Clinical & translational immunology 6:e128.
  5. Sayin SI, Wahlstrom A, Felin J, Jantti S, Marschall HU, Bamberg K, Angelin B, Hyotylainen T, Oresic M, Backhed F. 2013. Gut microbiota regulates bile acid metabolism by reducing the levels of tauro-beta-muricholic acid, a naturally occurring FXR antagonist. Cell metabolism 17:225-35.
  6. Kawamoto S, Maruya M, Kato LM, Suda W, Atarashi K, Doi Y, Tsutsui Y, Qin H, Honda K, Okada T, Hattori M, Fagarasan S. 2014. Foxp3(+) T cells regulate immunoglobulin a selection and facilitate diversification of bacterial species responsible for immune homeostasis. Immunity 41:152-65.
  7. Bravo JA, Forsythe P, Chew MV, Escaravage E, Savignac HM, Dinan TG, Bienenstock J, Cryan JF. 2011. Ingestion of Lactobacillus strain regulates emotional behavior and central GABA receptor expression in a mouse via the vagus nerve. Proceedings of the National Academy of Sciences of the United States of America 108:16050-5.
  8. Frank DN, St Amand AL, Feldman RA, Boedeker EC, Harpaz N, Pace NR. 2007. Molecular-phylogenetic characterization of microbial community imbalances in human inflammatory bowel diseases. Proceedings of the National Academy of Sciences of the United States of America 104:13780-5.
  9. Gevers D, Kugathasan S, Denson LA, Vazquez-Baeza Y, Van Treuren W, Ren B, Schwager E, Knights D, Song SJ, Yassour M, Morgan XC, Kostic AD, Luo C, Gonzalez A, McDonald D, Haberman Y, Walters T, Baker S, Rosh J, Stephens M, Heyman M, Markowitz J, Baldassano R, Griffiths A, Sylvester F, Mack D, Kim S, Crandall W, Hyams J, Huttenhower C, Knight R, Xavier RJ. 2014. The treatment-naive microbiome in new-onset Crohn's disease. Cell host & microbe 15:382-392.
  10. Kostic AD, Chun E, Robertson L, Glickman JN, Gallini CA, Michaud M, Clancy TE, Chung DC, Lochhead P, Hold GL, El-Omar EM, Brenner D, Fuchs CS, Meyerson M, Garrett WS. 2013. Fusobacterium nucleatum potentiates intestinal tumorigenesis and modulates the tumor-immune microenvironment. Cell host & microbe 14:207-15.
  11. Everard A, Belzer C, Geurts L, Ouwerkerk JP, Druart C, Bindels LB, Guiot Y, Derrien M, Muccioli GG, Delzenne NM, de Vos WM, Cani PD. 2013. Cross-talk between Akkermansia muciniphila and intestinal epithelium controls diet-induced obesity. Proceedings of the National Academy of Sciences of the United States of America 110:9066-71.
  12. Jiang H, Ling Z, Zhang Y, Mao H, Ma Z, Yin Y, Wang W, Tang W, Tan Z, Shi J, Li L, Ruan B. 2015. Altered fecal microbiota composition in patients with major depressive disorder. Brain, behavior, and immunity 48:186-94.
  13. Maier L, Pruteanu M, Kuhn M, Zeller G, Telzerow A, Anderson EE, Brochado AR, Fernandez KC, Dose H, Mori H, Patil KR, Bork P, Typas A. 2018. Extensive impact of non-antibiotic drugs on human gut bacteria. Nature 555:623-628.
  14. Markowiak P, Slizewska K. 2017. Effects of probiotics, prebiotics, and synbiotics on human health. Nutrients 9:1021.
  15. Crook N, Ferreiro A, Gasparrini AJ, Pesesky MW, Gibson MK, Wang B, Sun X, Condiotte Z, Dobrowolski S, Peterson D, Dantas G. 2019. Adaptive strategies of the candidate probiotic E. coli Nissle in the mammalian gut. Cell host & microbe 25:499-512.
  16. van Nood E, Vrieze A, Nieuwdorp M, Fuentes S, Zoetendal EG, de Vos WM, Visser CE, Kuijper EJ, Bartelsman JF, Tijssen JG, Speelman P, Dijkgraaf MG, Keller JJ. 2013. Duodenal infusion of donor feces for recurrent Clostridium difficile. N Engl J Med 368:407-15.
  17. Yilmaz B, Mooser C, Keller I, Li H, Zimmermann J, Bosshard L, Fuhrer T, Gomez de Aguero M, Trigo NF, Tschanz-Lischer H, Limenitakis JP, Hardt WD, McCoy KD, Stecher B, Excoffier L, Sauer U, Ganal-Vonarburg SC, Macpherson AJ. 2021. Long-term evolution and short-term adaptation of microbiota strains and sub-strains in mice. Cell host & microbe 29:650-663.
  18. Sleator RD. 2010. The human superorganism - of microbes and men. Medical hypotheses 74:214-5.
  19. Song EJ, Shin JH. 2022. Personalized Diets based on the Gut Microbiome as a Target for Health Maintenance: from Current Evidence to Future Possibilities. J Microbiol Biotechnol 32:1497-1505.
  20. Di Domenico M, Ballini A, Boccellino M, Scacco S, Lovero R, Charitos IA, Santacroce L. 2022. The Intestinal Microbiota May Be a Potential Theranostic Tool for Personalized Medicine. J Pers Med 12.

 

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SRG Applications for FY2024 to be Accepted from May

April 8, 2024

The Sylff Association secretariat will begin accepting applications for Sylff Research Grant (SRG) awards for fiscal year 2024 in May 2024.

SRG provides financial assistance to doctoral students and postdoc researchers to enable them to advance their academic careers by conducting high-quality research with high potential for advancing academic discourse.

The official call for applications will be made in May, but information about the program in fiscal year 2024 is available on the Sylff website: https://www.sylff.org/support_programs/srg/.

Be sure to check the Sylff website and newsletter for the official announcement of the program’s launch.

Please note that the Sylff Association secretariat is unable to answer questions about eligibility, application procedures, application documents, and other details of SRG FY2024 until its official launch in May 2024.

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Farewell to Religious Freedom: Persecution of Christians and Muslims in Hindu India

April 4, 2024
By 28804

The ruling Bharatiya Janata Party of Prime Minister Modi has fanned the flames of Hindu nationalism to reap political gains at the expense of India’s religious minorities and the ideals of secular democracy and cultural diversity, writes Amit Singh (University of Coimbra, 2020–21), who notes that religious intolerance could also lead to the curtailing of academic and press freedom.

*     *     *

Alarm about an impending genocide of Muslims and the persecution of Christians in India has been sounded, triggering a crisis in human rights. Why has a nation known for religious diversity and cultural unity turned against its own citizens—particularly Christian and Muslim minorities? The answer lies in the ideology of Hindu nationalism (also known as Hindutva) that has guided the government of Narendra Modi, who came to power in 2014 seeking to transform secular India into a Hindu state. The rise of Modi as prime minister has emboldened Hindu extremists to carry out violence against religious minorities with tacit government approval. Hindu nationalists employ religion and nationalism to polarize the masses and capture political power.

Hindu nationalism is an ethnic ideology that seeks to achieve the dominance of the Hindu religion and culture over religious minorities. It is often associated with the belief that Indian Muslims and Christians are not loyal to the state and should thus be seen as foreigners. Hindu nationalists accuse them of defiling the purity of the country and Hindu culture and have promoted violence from time to time, such as the communal riots in Gujrat (2002), Orissa (2008), Delhi (2020), Gurugram (2023), and more recently Manipur (2023–24).

When India gained independence in 1947, it chose to become a secular state, rather than a Hindu nation. Secularism was considered essential to Indian democracy in order to prevent the Hindu majority from dominating religious minorities. Some Hindu nationalists who believe in the supremacy of the Hindu religion were troubled, however, by the idea of religious equality, which granted the same constitutional rights to Muslim minorities. The Indian Constitution guarantees the freedom of religion to all religious minorities, including Christians and Muslims. It affirms that all Indian citizens are equal, irrespective of their religion, and that the State shall maintain an equal distance from all religions, denying any role of religion in state affairs.

A Changed Situation

On January 22, 2024, Prime Minister Modi crossed the line separating religion and state by participating in the inauguration ceremony for a controversial Hindu temple in Ayodhya. This, at least metaphorically, made India a Hindu state. The visit to the Ayodhya Ram temple, built where a mosque was demolished in 1992 by Hindu fundamentalists, was a stark warning to all who still believed in religious equality and cultural diversity in secular India.

The Ram temple premises in Ayodhya (photo taken by the author).

What does a Hindu India mean for Christian and Muslim minorities? It means “subordination to the Hindu majority and living as second-class citizens, just like the Jews under Nazi Germany,” a Christian priest in the north Indian district of Varanasi told me, adding, “Religious persecution of Christian minorities by Hindu fundamentalists has reached a critical stage.”

Musa Azmi, a Muslim activist in Varanasi, expressed concern that large-scale riots against Muslims may be organized by Hindu fundamentalists before the national election in 2024. “Even the local courts are taking decisions that favor the Hindu majority,” he complained. Indian religious minorities feel that they no longer enjoy the religious freedom and rights they had under the secular Congress Party until 2014. 

In the first eight months of 2023, there were 525 attacks against Christians in India. Manipur has experienced several incidents of targeted violence against Christians amid ongoing civil unrest. According to a report by the United Christian Forum (UCF), Christians are also legally harassed, as the police have failed to prosecute perpetrators of mob violence. Statements made by ruling party leaders appear to have acted as a force multiplier, leading to greater impunity. The ruling Hindu nationalists party, Bharatiya Janata Party (BJP), has threatened Catholics in Goa with calls to “wipe out” the history of Portuguese presence.

Hijacking Religion for Political Gain

Most of the religiously motivated attacks have been carried out by ultranationalist, right-wing Hindu groups, such as Hindu Yuva Vahini, Hindu Jagran Manch, Rashtriya Swayamsevak Sangh (RSS), Bajrang Dal, and Vishva Hindu Parishad. These groups are linked to the ruling BJP, which uses the Hindu identity and religion to turn the sentiments of the majority against not only Christian and Muslim minorities but also the core of principles of the Indian Constitution, such as secularism, religious pluralism, and respect for cultural harmony and diversity. The Modi government has hijacked Hinduism and the national media to demonize religious minorities and the political opposition, who are portrayed as enemies of the Hindu religion.

Public acts of violence against Muslims appeal to core Hindu nationalist supporters. In their efforts to restore India’s lost glory, Hindu nationalists pursue such policies as securing the site of the Babri mosque for a Hindu temple and renaming places with Hindu names (often replacing Muslim names). The identities of religious minorities are being erased, and past events are being retold to create an “official” Hindu state history. Simultaneously, they have been stripping Jammu and Kashmir of its special status through the dilution of Article 370, and moving towards a new Citizenship Law with the potential to exclude Muslims from Indian citizenship.

Studies have shown that religious strife politically benefits the Hindu nationalist party, and this has encouraged violence against religious minorities and their sacred sites. Now that the Ram temple has been inaugurated, the controversial Gyanvapi Mosque in Varanasi appears to be the BJP’s next target in an effort to win the national election in 2029. This means that religious polarization and the vilification of religious minorities are likely to increase in the coming years.

The author published a study on the impact of Hindutva on secular democracy and human rights in 2024.

The use of the Hindu religion under the Modi government has reached new heights, leading to an increase in the Hindu majority’s hostility toward religious minorities. Not only religious freedom but academic and press freedom have also been severely curtailed in India. With the growing influence of Hindu nationalism on Indian society, the religious persecution of minorities is likely to escalate in tandem with a decline of secular democracy.

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SLI Call for Applications Updated

April 1, 2024

The Call for Applications for Sylff Leadership Initiatives (SLI) has been updated with tips on how eligible fellows can improve their chances of winning an award.

SLI aims to support current and graduated fellows who are committed to taking the small steps that can make a big difference for the benefit of society. A maximum of US$10,000 is provided for two categories of activities with high social value: (1) a social action project or (2) a forum, conference, seminar, or workshop. Fellows may apply for SLI any time of the year.

To apply, each applicant must submit a concept paper summarizing the proposed project and the social issue it seeks to address in a concise and convincing manner. Because the concept paper is a crucial component of the selection process, we have added some tips on what the concept paper should contain in the “4. Selection Criteria” section of the Call for Applications.

We hope the additional information will be helpful when applicants are preparing their project proposals. If you are planning an initiative that can benefit society, be sure to check the updated Call for Applications at: https://www.sylff.org/support_programs/sli/.

We look forward to receiving your application.

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The Role of Cooperatives in Promoting Interethnic Dialogue and Peaceful Coexistence

March 12, 2024
By 28817

Given their emphasis on collective work, democratic decision-making, and dialogue in promoting members’ economic and social well-being, cooperatives encourage an openness to others, which can also enable different ethnic groups to work together toward common goals and achieve peaceful coexistence. Rui Lora (University of Coimbra, 2020-21) writes that in Bosnia and Herzegovina, cooperatives were a major factor in overcoming discrimination and fostering reconciliation.

*     *     *

The economic, social, and political benefits of the cooperative movement—launched with the founding of the Rochdale Society of Equitable Pioneers in 1844—have long been recognized. In recent years, such benefits have also been observed in such fields as international relations, diplomacy, and even peace studies (Macpherson and Paz 2015; Emmanuel and Macpherson 2007; Cooperatives Europe 2019). One way of identifying the nature of these contributions is to analyze the movement through the lens of what is called diatopic hermeneutics. This allows cooperativism to be perceived as an actor in international relations from the perspective of “cosmopolitanism”—which views all people as being entitled to equal respect and consideration, regardless or citizenship or other affiliations.

The concept of diatopic hermeneutics was first presented by Panikkar (1982) and later expounded by Santos (1997). It is based on the principle that one culture cannot understand another from just its own viewpoint. Rather, it is “necessary to understand the other without assuming that it has our same self-knowledge or knowledge base” (Santos 1997). Diatopic hermeneutics thus seeks to “bring into contact radically different human horizons” in order to achieve true dialogue and the interaction of cultures (Santos 1997). It can be understood as the reciprocal translation of values, knowledge, and beliefs and is needed because the commonplace rhetoric of a given culture or tradition is often incomplete, incompatible, or potentially challenging from the perspective of another tradition. There must be dialogue between diverse cultural perspectives to enable the reciprocal translation of values, knowledge, and beliefs.

An examination of traditional principles of cooperativism reveals that they have much in common with diatopic hermeneutics. In fact, the cooperative might even be regarded as a practical instrument of the concept. The principles of cooperativism, for example, emphasize the importance of collective work, democratic decision-making, and dialogue in promoting the economic and social well-being of members. Such principles are aligned with the approach of diatopic hermeneutics in implying an openness to understanding the other and valuing cultural diversity.

Expanding Scope of Cooperatives

Historically, cooperativism has been a movement that, from the beginning, sought to build alternative economic models to capitalism through its emphasis on collective ownership and democratic management, while at the same time avoiding a state-centered economic model (Namorado 1999). Since its emergence after the Industrial Revolution, cooperatives have addressed a plurality of community needs, including in times of crisis (Vieta and Lionais 2015). In addition to making economic contributions, cooperativism is usually and directly related to many aspects of the social and solidarity economy (Singer 2018).

However, over the years, and particularly more recently, the scope and performance of cooperatives have expanded to other spheres. This has prompted the need to discuss the role of cooperatives from a cosmopolitanist perspective, as the globalization of the world economy and commercial liberalism have, according to some theoretical perspectives, deepened exclusion and wealth concentration, thereby threatening democracy and peace (Rodrigues 2008). In this context, cooperatives began to assume an increasingly prominent economic and political role with the emergence of an independent civil society around the world (Laville 2009).

The globalization process has greatly modified the way people interact in society in recent years. It has made possible the compression of time and space, reducing distances and speeding up information, and the promotion of the universalization of laws. But it has also highlighted differences in sociocultural identities in response to social homogenization, causing conflict between different human groups (Ioris 2007). This makes discussions of the tools and procedures that allow different segments of society—those with different worldviews—to communicate and meet the challenges of social and political coexistence quite important. Expanding the concept of diatopic hermeneutics with the aim of contributing to this discussion, especially with respect to diversity, may help bring together human groups that are isolated or in conflict due to globalization.

The author, top left, speaking with members of a multiethnic cooperative in Bosnia and Herzegovina as part of his SRG project.

Seeing cooperatives as an international actor reveals significant local and even global contributions that can be made by the cooperative movement in allowing actions and initiatives to transcend various disparities. Santos suggests that globalization can be understood through the lenses of “globalized localisms” and “localized globalisms,” referring to global perceptions of local customs and the impact of transnational practices on local conventions, respectively (Santos 1997, 14). These dynamics, characterized by asymmetries between central and peripheral countries, underscore the potential of cooperatives to contribute to regional integration by addressing such disparities.

An Actor in International Relations

In this context, cosmopolitanism emerges as a concept that enables actors, including regions, classes, and subordinate social groups, to interact transnationally in pursuit of common interests (Santos 1997). Cooperatives, rooted in cooperation among themselves and in contributing to the community, are connected to a global network through the International Cooperative Alliance (ICA), for example. They play a crucial role in inclusive socioeconomic development and can also serve as a tool for subaltern and insurgent cosmopolitanism, addressing the aspirations of oppressed groups and fostering global solidarity.

Cooperatives can thus be understood as an actor in international relations from a cosmopolitanist perspective, advocating for common interests shared by marginalized, excluded, and subordinated groups globally. When viewed as part of cosmopolitanism, moreover, the principles and values of cooperativism acquire a practical dimension, enabling dialogue and the exchange of experiences among cooperatives and members. The organizational structure of cooperatives, both locally and regionally, as well as their international representation through bodies like the ICA, empowers marginalized groups in global governance mechanisms and contributes to addressing asymmetries in integration processes.

To avoid overly idealistic conclusions, though, it is essential to identify specific situations and contexts where this relationship between cooperatives and cosmopolitanism can be verified, even tangentially. This approach can ensure a more nuanced understanding of cooperatives’ role in fostering regional integration, such as in the Western Balkans. According to the report by Cooperatives Europe (2019), two projects in Bosnia and Herzegovina have demonstrated the capacity of cooperatives to promote interethnic dialogue and economic development of the region: the “Fruits of Peace” project of the Insieme Cooperative in the Bratunac region and the creation in Doboj of multiethnic cooperatives as a consortium of rural producers.

At a meeting with a cooperative in Bosnia and Herzegovina.

The main success of both projects was the establishment of a flexible and progressive process for forming cooperatives, allowing exchange between different ethnic groups to develop within the cooperatives. The increased dialogue helped to overcome discrimination and promote peacebuilding, providing opportunities to correct misunderstandings and find a path toward peaceful coexistence. By promoting collective work, both projects also enabled the revitalization of sustainable rural economies and contributed to reconciliation by overcoming long-established divisions. Major factors behind their success were that the cooperative ensured continuous training and promoted constant dialogue for both its employees and producers.

An Analytical Lens for Understanding Global Dynamics in Local Contexts

Analyzing these cases from a cosmopolitanist perspective, one can argue that cooperatives have the potential to promote interethnic dialogue and build coexistence in diverse environments. By embodying such principles as cooperation, solidarity, and democracy, cooperatives provide a space for members of different ethnic groups to come together, work toward common goals, and build understanding to achieve reconciliation. The principles of cooperativism thus also incorporate the idea of diatopic hermeneutics, especially in seeking to understand cultural and legal diversity in different geographical contexts, as highlighted in examples like those observed in Bosnia and Herzegovina.

If, on the other hand, cooperatives are conceived within the framework of globalized localisms and localized globalisms, they can become subject to a complex and unequal power dynamic, which can manifest as oppression, exploitation, and marginalization. This may occur when global influences benefit dominant centers at the expense of those on the periphery. Diatopic hermeneutics can help us understand how these global processes are reinterpreted and experienced locally, and how communities like cooperatives resist and respond to these power dynamics.

In this context, the role of diatopic hermeneutics would be to offer an analytical lens for understanding how global dynamics are interpreted and experienced in specific local contexts, especially by the cooperatives in this case. In other words, diatopic hermeneutics allows an analysis sensitive to cultural, historical, and social differences in different places, recognizing that experiences and interpretations of globalism and localism vary according to geographical and cultural context. It helps us to understand how global influences are reinterpreted and adapted locally, and how these adaptations reflect and shape power relations, resistance, and identity.

Using diatopic hermeneutics to understand cooperativism in a cosmopolitanist scenario thus enables us to capture the nuances of the relationships between globalism, localism, and subalternity, providing a more holistic and contextualized approach to analyzing issues of justice, power, and social transformation in a globalized world and supporting the argument that cooperatives can contribute to interethnic dialogue.

 

References

Charles, Lorraine, and Kate Denman. 2013. “Syrian and Palestinian Syrian Refugees in Lebanon: The Plight of Women and Children.” Journal of International Women’s Studies 14.5: 96-111.

Cooperatives Europe. 2019. Cooperatives and Peace: Strengthening Democracy, Participation and Trust. A Case Study Approach. Cooperatives Europe and Cooperatives Europe Development Platform.

Emmanuel, J., and MacPherson, I., eds. 2007. Co-operatives and the Pursuit of Peace. British Columbia: New Rochdale Press.

Gijselinckx, Caroline, and Matthias Bussels. 2014. “Farmers’ Cooperatives in Europe: Social and Historical Determinants of Cooperative Membership in Agriculture.” Annals of Public and Cooperative Economics 85.4: 509-530.

Ioris, Rafael Rossotto. 2007. Culturas em choque: a globalização e os desafios para a convivência multicultural. Annablume.

Larkin, Craig. 2012. Memory and Conflict in Lebanon: Remembering and Forgetting the Past. Routledge.

Laville J. L. 2009. A economia solidária: um movimento internacional. Revista Critica de Ciencias Sociais 84.

MacPherson, Ian, and Yehudah Paz. 2015. “Concern for Community: The Relevance of Co-operatives to Peace.” Joy Emmanuel, ed. Victoria: Turning Times Research and Consulting.

Madulu, Ndalahwa F. 2003. “Linking poverty levels to water resource use and conflicts in rural Tanzania.” Physics and Chemistry of the Earth, Parts A/B/C 28.20-27: 911-917.

Menashri, David. 2001. Post-Revolutionary Politics in Iran: Religion, Society, and Power. Routledge.

Namorado, Rui. 1999. Estrutura e Organização das Cooperativas. Oficina do Centro de Estudos Sociais de Coimbra 138.

McNally, D., 1993. Against the Market: Political Economy, Market Socialism and the Marxist Critique. London: Verso.

Panikkar, Raimundo. 1982. “Is the Notion of Human Rights a Western Concept?” Diogenes 30.120: 75-102.

Rodrigues, Roberto. 2008. “Cooperativismo: Democracia e Paz – surfando a segunda onda.” OCB.

Santos, Boaventura de Souza. 1997. “Uma concepção multicultural de direitos humanos.” Lua Nova 39: 105-124.

———. 2004. “Para uma sociologia das ausências e uma sociologia das emergências.” In Santos, B. de S, comp., Conhecimento Prudente para uma Vida Decente: ‘Um Discurso sobre as Ciências’ revisitado. São Paulo: Cortez, p. 777‐821.

Singer, Paul. 2018. Ensaios sobre economia solidária. Leya.

Vergalito, Esteban. 2009. “Acotaciones filosóficas a la ‘hermenéutica diatópica’ de Boaventura de Sousa Santos.” Impulso 19.48: 19-29.

Vieta, Marcelo, and Doug Lionais. 2015. “The Cooperative Advantage for Community Development.” Journal of Entrepreneurial and Organizational Diversity 4.1: 1- 10.

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How Hungary Came to “Accept” the Global Minimum Tax

March 5, 2024
By 31304

Hungary found itself isolated in the EU when it initially blocked the implementation of the OECD agreement on a minimum corporate tax rate for multinationals. In an article adapted from a paper that was submitted to Pázmány Péter Catholic University Budapest, Tamás Zoltán Wágner (Hungarian Academy of Sciences, 2022) writes that rather than stonewalling the agreement, the government wisely shifted its strategy, enabling it to embrace the deal while maintaining its tax sovereignty and competitiveness.

*     *     *

Following the October 2021 agreement on a global minimum tax within the OECD framework on base erosion and profit shifting (BEPS), the focus in the European Union shifted to the question of how this should be implemented in national and EU legal systems. This became an issue because member states with low corporate tax rates, such as Ireland and Hungary, feared losing their competitiveness and were critical of the implementation efforts, triggering heated debate.

Hungary initially strongly opposed the implementation of the tax in the EU and anticipated vetoing it if necessary. Later, though, the Hungarian government adjusted its position and focused its efforts on how it could avoid implementing an actual tax increase. In the following, after briefly presenting the rules on the global minimum tax, I will examine whether Hungary’s fear was justified and then analyze the reasons for the change in the Hungarian position, which evolved from initial rejection to a search for a compromise.

Discouraging Tax Planning

Regarding the OECD agreement, it is important to point out that it is a two-pillar solution. The first pillar addresses the largest and most profitable multinational enterprises (MNEs) with a global turnover of more than €20 billion (€10 billion from 2028) and a pretax profitability ratio exceeding 10%. In countries where they sell their products and services and where they have consumers, these companies will need to pay 25% of their profits. By implementing this tax, countries that introduced or planned to introduce a digital tax will abandon it and commit to not introducing it in the future.

The second pillar is the global minimum tax, which aims to ensure that multinationals pay a minimum of 15% on all their profits in each jurisdiction where they have subsidiaries or establishments. According to pillar two rules, it is necessary to examine on a country-by-country basis whether the taxation of a given multinational reaches the effective tax rate. The global minimum tax applies to MNEs with an annual consolidated group revenue of €750 million operating in at least two of the four years preceding the current year and in two jurisdictions. States have the option of including for minimum taxation groups of companies operating in their own territories even if they do not have foreign subsidiaries or establishments. Not subject to the minimum tax, though, are government departments, international organizations, nonprofit organizations, pension or investment funds that are the ultimate parent companies of a group of companies, and the assets held by such entities.

The rate of the global minimum tax is not a nominal but an effective tax rate: only the taxes actually paid matter. Thus, if the effective tax rate of one of the subsidiaries in a given jurisdiction is less than 15%, then an additional tax is levied, to be paid by the parent company or the subsidiary. According to the three-element scheme developed by the OECD, the income inclusion rule (IIR) provides for the imposition of a top-up tax to make up for any difference in the taxes paid, or, if there is no IIR in the relevant jurisdiction, the undertaxed payments rule (UTPR) operates as a backstop to ensure that the tax rate for an MNE group is achieved by prohibiting cost deductions for group members or through similar mechanisms. The third element of the regulation is the subject to tax rule (STTR), a treaty-based rule that allows certain states to tax intra-group payments when the tax rate for such payments is below the minimum rate. This had been prohibited under the double taxation convention.

In the light of the above, it is clear that, contrary to the OECD BEPS Action Plan, adopted in 2013, the global minimum tax does not place emphasis on protecting the tax base but on eliminating the cause of tax planning: its basic philosophy assumes that MNEs will not use tax avoidance techniques if the tax advantage is taken away. It also aims to prevent a “race to the bottom” based on continuous decline in corporate tax rates and to reduce divergences between national tax systems, which also facilitate tax avoidance techniques.

An image generated by Craiyon (https://www.craiyon.com/).

Backlash from Hungarian Officials

Low-tax countries like Ireland and Hungary initially sharply criticized the concept because they feared losing their competitiveness and becoming less attractive to foreign investors. They also complained that the introduction of a global minimum tax would limit their tax policy, since it would essentially force them to raise their corporate tax rates: even if they apply lower tax rates, other states will collect the difference anyway. This fear seemed justified because, as Hindriks and Nishimura showed, the introduction of a global minimum tax would reduce the gap between high-tax and low-tax countries, which would also affect the ability to attract capital: large companies would be less likely to move their profits to low-tax countries.

Overall, countries with low tax rates can expect a decrease in tax revenues, while countries with high tax rates can expect an increase in tax revenues. In the longer term, the loss of a tax advantage could also jeopardize the very existence of tax havens and other preferential tax regimes. For this reason, these countries need to pursue one of the following strategies:

  • Maintain the status quo (for states that do not levy a corporate tax)
  • Raise the corporate tax rate to the level of the global minimum tax
  • Introduce a corporate tax system that applies to all companies
  • Introduce a threshold-based corporate tax system, which means that only companies subject to a global minimum tax must pay the higher corporate tax rate

Another strategy is for the state, in order to avoid an effective tax increase, to include as many types of tax as possible in the effective tax burden. This, in my view, is the best way forward, and it was, in fact, the choice made by Hungary.

Hungary, like other low-tax countries, was initially very skeptical about the global minimum tax. The proposed legislation triggered the following preliminary remarks from governmental officials:

  • “We should avoid a war of competition among tax systems in the global fight against harmful tax competition.”
  • “It is essential to respect the fiscal sovereignty of states regarding the taxation of income generated locally, and profits attributable to real economic activity shall be exempted to the greatest possible extent.”
  • “The situation should be avoided where the regulation penalizes differences between different methods of calculating the tax base instead of low taxation, which could substantially restrict the free movement of capital even between states applying tax rates close to the average.”
  • “A set of rules applicable only to subsidiaries would create a significant competitive disadvantage for capital-importing countries and, in many cases, lead to the relocation of headquarters to low-tax states.

These remarks were later supplemented by criticisms, such as:

  • “This reduces the sovereignty of the Hungarian tax system and would result in a competitive disadvantage for the European Union, which is unacceptable in the particularly sensitive economic situation caused by the Russo-Ukrainian war.”
  • “The Hungarian corporate tax rate (9%) is much lower than that of all our trading partners, which is the cornerstone of the Hungarian economic policy.”
  • “It would endanger hundreds of thousands of jobs in our country and would mean a return to the situation of 2010 in terms of corporate tax.

A Threat to Competitiveness

These comments indicate that the Hungarian government viewed the issue of the global minimum tax from a sovereigntist, tax competitiveness perspective. This was understandable, given the logic of Hungary’s economic policy: the implementation of an actual tax increase would endanger the competitiveness it had enjoyed thanks to low corporate tax rates. At the same time, the Hungarian government was under great pressure to support the adoption of the EU directive. After all, even if it did not introduce a global minimum tax, the tax difference would simply be collected by other governments. In other words, companies operating in Hungary will have to reckon with an increase in the tax burden no matter how Budapest decided, and moreover, by not implementing the tax, the government would be voluntarily forgoing sources of revenue that it could otherwise have claimed.

The situation of the Hungarian government became more difficult by the fact that on September 9, 2022, the EU’s largest economies—France, Germany, Italy, Spain, and the Netherlands—announced that if the EU directive was not adopted, they were ready to introduce the global minimum tax unilaterally. This step would have meant tens of billions of forints in additional tax liability just for German companies operating in Hungary, whose average effective corporate tax rate, due to various tax breaks, barely reached 3%. Hungary also faced concrete pressure owing to the termination of the US-Hungary double taxation avoidance treaty in early July 2022 and the decision of the European Parliament on national vetoes undermining the global tax agreement, also in early July.

Regarding the former, it is worth pointing out that this was not unexpected: even before the Ecofin (Economic and Financial Affairs Council) meeting in June 2022, US Treasury Secretary Janet Yellen warned Hungary to change its position on the global minimum tax or face the termination of the bilateral double taxation treaty. Although the treaty did not expire until January 2024, the United States showed no intention of concluding a new treaty with Hungary. In Tibor Pálszabó’s opinion, the potential implications for private individuals include the following:

  • If they become residents in both countries, their world income would become taxable in both states.
  • Even without multiple residence, they may become liable for taxation in the country of income in situations where they had previously been exempt, that is, a double taxation situation may arise.
  • The conventional exemptions that would have resolved such double taxation issues will be abolished.

In the case of businesses, there will be a negative change mainly in relation to the withholding tax: dividends, interest, and royalties will be subject to a withholding tax of 30% instead of the previous 5%. The Hungarian economy will experience the negative effects even in the short term (such as through a direct tax revenue loss of 70 billion to 80 billion forints due to the reorganization of the investment structure of US companies), but in the long term the situation is more serious: there could be a significant decline in the economy’s ability to attract capital and retain its labor force.

The European Parliament, meanwhile, criticized the unanimity requirement for decision-making in the field of taxation, calling on the European Commission and the Council to find alternative ways for the EU to fulfil its OECD/G20 commitments, such as through “enhanced cooperation,” unilateral implementation by member states, and transition to qualified majority voting. It also demanded that Hungary lift its veto and urged the Commission and member states to block approval of Hungary’s recovery and resilience plan unless all the criteria were fully complied with.

A Shift in Strategy

Based on the above, it was apparent that by the end of 2022 the Hungarian government found itself in a very difficult situation: it was isolated in the EU and risked being lumped together with conventional tax havens. The Hungarian position, which seemed rigid at first, thus gradually shifted to another strategy: including as many domestic taxes (such as the local business tax) as possible in the effective tax burden in order to avoid actually raising the corporate tax. In this respect, negotiations were successful, as Hungary achieved the following goals:

  • The inclusion of the local business tax in the global minimum tax
  • Exemption of real economic activity
  • Simultaneous introduction of rules in all countries adopting the global minimum tax (so that Hungary does not suffer a competitive disadvantage)
  • The likely collection of the tax difference from target MNE groups in the form of differentiated domestic taxes so that there is no need to change the corporate tax rate of 9%.

Subsequently, on December 12, 2022—after Hungary lifted its veto—EU member states reached an agreement on the directive submitted by the European Commission at the end of 2021 to ensure a global minimum level of taxation for MNEs, which entered into force on December 14, 2022.


The example of Hungary highlights that, contrary to initial fears, the introduction of the global minimum tax does not necessarily entail an increase in the corporate tax burden or restrict the tax sovereignty of low-tax countries if other types of domestic taxes (like the local business tax) are included in the effective tax burden. Therefore, the right strategy for the global minimum tax is not rigid resistance, as it can easily lead to international isolation and reputational loss (such as by being branded a tax haven), but to negotiate a compromise so that competitiveness can be maintained even after implementing the global minimum tax.

References

OECD/G20 Base Erosion and Profit Shifting Project. “Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy.” https://www.oecd.org/tax/beps/statement-on-a-two-pillar-solution-to-address-the-tax-challenges-arising-from-the-digitalisation-of-the-economy-october-2021.pdf.

Czoboly, Gergely. “Globális minimumadó bevezetésének lehetséges hatásai a klasszikus adóstruktúrákra” [Possible Effects of the Introduction of a Global Minimum Tax on Classical Tax Structures]. Miskolci Jogi Szemle, 2021/5. (3. különszám).

Nobilis, Benedek. “Globális minimumadó: ez nem csak Magyarországnak fájhat” [Global Minimum Tax: This May Hurt Not Just Hungary]. Portfolio. https://www.portfolio.hu/gazdasag/20210413/globalis-minimumado-ez-nem-csak-magyarorszagnak-fajhat-477960.

Hindriks, Jean and Yukihiro Nishimura. “The Compliance Dilemma of the Global Minimum Tax.” LIDAM Discussion Paper CORE, 2022/13. https://dial.uclouvain.be/pr/boreal/object/boreal%3A259159/datastream/PDF_01/view.

Essid, Colleen. “The Global Minimum Tax Agreement: An End to Corporate Tax Havens?” SLU Law Journal Online, 73. https://scholarship.law.slu.edu/lawjournalonline/73.

Deloitte Insights. “Global Minimum Corporate Income Tax. How Might Countries with ‘Low’ or ‘No’ Taxation Respond?” https://www2.deloitte.com/xe/en/pages/tax/articles/global-minimum-corporate-income-tax.html.

Prinz, Dániel and Eszter Kabos. “Miért van szükség globális társasági minimumadóra?” [Why Do We Need a Global Minimum Tax?]. Qubit. https://qubit.hu/2021/08/02/miert-van-szukseg-globalis-tarsasagi-minimumadora.

Hungarian National Assembly. “Az Országgyűlés 24/2022. (VI. 21.) OGY határozata a globális minimumadó bevezetésére vonatkozó európai uniós irányelv elfogadásának elutasításáról” [24/2022 (VI. 21) Decision of the Hungarian National Assembly Rejecting the Adoption of an EU Directive Introducing a Global Minimum Tax].

Kiss, Rajmund. “Kerékbe tört versenyképesség? A globális minimumadó súlyos kockázatairól” [Competitiveness in Tatters? The Serious Risks of the Global Minimum Tax]. Mathias Corvinus Collegium. https://corvinak.hu/gazdasag/2021/05/19/kerekbe-tort-versenykepesseg-a-globalis-minimumado.

Government of Hungary. “A globális minimumadó jelentené a kegyelemdöfést az európai gazdaságnak” [A Global Minimum Tax Would be a Coup de Grâce for the European Economy]. https://kormany.hu/hirek/a-globalis-minimumado-jelentene-a-kegyelemdofest-az-europai-gazdasagnak.

Pardavi, László. “Néhány gondolat a globális minimumadó történetéről, bevezetésének okairól és lehetséges magyarországi hatásairól” [A Few Thoughts on the History of the Global Minimum Tax, the Reasons for Its Introduction, and Its Possible Impact on Hungary]. In Barna Arnold Keserű, Katalin Szoboszlai-Kiss, and Richárd Németh, eds., Salus Vocalis. Csegöldi indulás - Győri érkezés. Ünnepi tanulmányok Fazekas Judit tiszteletére. Győr, Universitas-Győr Nonprofit Kft, 2023.

Adó Online. “Niveus: Magyarország a globális minimumadóról szóló csatát hamarosan elveszítheti [Niveus: The Battle over the Global Minimum Tax Could Soon Be Lost for Hungary]. https://ado.hu/ado/niveus-magyarorszag-a-globalis-minimumadorol-szolo-csatat-hamarosan-elveszitheti/.

Government of Hungary. “Az Egyesült Államok nyomást akar gyakorolni Magyarországra” [The United States Wants to Put Pressure on Hungary]. https://kormany.hu/hirek/az-egyesult-allamok-nyomast-akar-gyakorolni-magyarorszagra.

Pálszabó, Tibor, Veronika Oláh, and Dániel Bajusz. “USA-magyar adóegyezmény felmondása: mi lesz veletek expatok?” [Termination of the US-Hungarian Tax Treaty: What Will Happen to Expats?]. EY. https://www.ey.com/hu_hu/tax/usa--magyar-adoegyezmeny-felmondasa--mi-lesz-veletek-expatok-.

Dajkó, Ferenc Dániel. “Sérülnek az amerikai-magyar kapcsolatok? – Szakértők a kettős adóztatás felmondásáról” [Are US-Hungarian Relations Damaged? Experts on the Termination of Double Taxation]. novekedes.hu. https://novekedes.hu/interju/serulnek-az-amerikai-magyar-gazdasagi-kapcsolatok-szakertoket-kerdeztunk-mi-varhato-a-kettos-adoztatas-egyezmeny-felmondasa-utan.

European Parliament. “European Parliament Resolution of 6 July 2022 on National Vetoes to Undermine the Global Tax Deal (2022/2734(RSP)).” https://www.europarl.europa.eu/doceo/document/TA-9-2022-0290_EN.html.

Mattiassich, Enikő and Károly Szóka. “Impact of the Introduction of A Global Minimum Tax.” In Mustafa Göktuğ Kaya and Haldun Soydal, eds., International Congress of Finance and Tax. March 10–11, 2023, Konya, Türkiye.

Council of the European Union. “Council Directive (EU) 2022/2523 of 14 December 2022 on Ensuring a Global Minimum Level of Taxation for Multinational Enterprise Groups and Large-Scale Domestic Groups in the Union.” Official Journal of the European Union, L 328, 22.12.2022, pp. 1–58. https://eur-lex.europa.eu/eli/dir/2022/2523/oj.

 

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Rice Bran and Gut Health: Unravelling the Molecular Mechanisms behind Colitis Suppression

February 26, 2024
By 30578

Rice bran has been shown in recent studies to help reduce inflammation in the digestive tract, but the mechanisms by which it affects the body have yet to be clearly elucidated. Using an SRG award, Kazuki Tanaka (Keio University, 2020 and 2021) isolated individual bacteria with the potential to produce colitis-suppressing substances and hopes to commercialize an anti-inflammatory agent in cooperation with a startup.

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Japanese dishes like sushi and ramen are famous worldwide. And many Japanese foods are known for making us healthier, notable examples being natto (fermented soybeans), miso (fermented soybean paste), and matcha (green tea powder),[1][2][3] which feed our gut’s good bacteria to help us stay in shape.[4] Think of them as helping the water in our inner fish tank stay clean.

Another such food is rice bran[5]—the outer layer of brown rice—which has been shown in recent studies to help reduce inflammation in the colon, which is a part of the large intestine.[6][7][8][9] Rice bran is rich in fiber, vitamins, and antioxidants—nutrients that work like a multivitamin pill[7][8][10][11] to not only nourish the body but also to make our gut happy and potentially reduce inflammation. Science, though, is still trying to figure out exactly how rice bran affects the body.

Inflammatory bowel disease (IBD) is a debilitating condition characterized by inflammation of parts of the digestive tract. Many of the genes linked to this disease have been identified, yet the number of people getting IBD in Japan has skyrocketed in recent decades.[12] This suggests that the disease is not just about genetics; something else is at play—many scientists believe that an imbalance in the gut’s bacteria population might be a big factor. Using advanced DNA techniques, various studies have tried to pinpoint which bacteria trigger IBD and which ones inhibit it. But understanding the world of bacteria is like solving a giant jigsaw puzzle without knowing what the final picture looks like.[13]

The gut is always changing, and this makes studying it tricky—it is like trying to figure out the story of a movie by only seeing random scenes. Plus, everyone’s gut movie is different because of discrepancies in our diet,[14] lifestyles,[15] and environments.[16] So, to fully understand the many bacterial stories, scientists believe we need a big-picture approach.

Isolating Colitis-Suppressing Bacteria

In my research that was funded in part by SRG, I used a special mouse model to dig deeper into how eating rice bran might affect our gut, particularly whether rice bran might hold the key to keeping inflammation at bay. I adopted a technique that allowed me to look at a lot of data from multiple angles to get the clearest story possible.

Thus far, I have been able to identify a specific group of gut bacteria that seem to have a suppressive effect on colitis. Initially, I conducted a replication experiment to determine whether this bacterial group truly had a suppressive effect on colitis. For this, I compared the suppressive effect in germ-free mice and mice that were administered this colitis-suppressing gut bacterial group. As a result, mice with the colitis-suppressing gut bacterial group indeed showed a suppressive effect on colitis.

To understand which bacteria within this group were responsible for suppressing colitis, I attempted to isolate the different strains. I cultivated bacteria from this group under various conditions, using different media and under anaerobic states, and managed to isolate approximately 200 individual bacteria. Upon further investigation of their metabolic capabilities crucial for colitis suppression, five of these bacteria were found to potentially have the ability to produce substances vital for suppressing colitis. When I extracted and analyzed the genomic DNA of these five bacteria using next-generation sequencing, it turned out that all five were from the same bacterial species.

 

The inflammation-suppressing bacterial candidate strains on a plate medium.

A microscopic image of inflammation-suppressing bacterial candidate isolate.

 

Subsequently, I administered this colitis-suppressing bacterium to germ-free mice to evaluate its suppressive effect. However, a single species of the colitis-suppressing bacterium did not show any suppressive effect on colitis. That no significant increase in substances crucial for colitis suppression was observed in the intestines of these mice suggests that the presence of other gut bacteria is also necessary. Moving forward, I aim to isolate other gut bacteria that are needed for this colitis-suppressing bacterium to be effective.

Lastly, I conducted a whole genome analysis of the colitis-suppressing bacterium. Given that no previous reports suggested that gut bacteria produce substances vital for colitis suppression, this finding could be of great academic significance. However, despite several attempts under different conditions, I was unable to extract DNA of adequate quality for analysis. External agencies also faced challenges when trying to extract it. In the future, I plan to explore the conditions appropriate for DNA extraction.

Achieving High Impact

I expect that the detailed molecular mechanism by which rice bran intake leads to colitis suppression can eventually be clarified. In conventional nutritional science, importance is placed on the components contained in foods, and little has yet been elucidated regarding the mechanism of gut microbiota. In my research, I hope to promote a fuller understanding of the role gut microbiota plays in how food intake affects the body. Such findings can be expected to have a high social and academic impact, and I hope to publish them in a well-known international scientific journal. In addition, an application for an international patent will be filed to develop a new therapeutic drug for colitis based on the findings of the colitis suppression mechanism. I thus believe that my research will be able to contribute to patients with unmet medical needs.

Research results must be commercialized in order for them to be disseminated to the public. A patent for an anti-inflammatory agent is scheduled to be granted next year. A new patent is pending in collaboration with a startup company, and our research team is currently in discussions with the company to commercialize the product. We have presented our findings at conferences to promote food developments not only for rice bran but also for many other foods worldwide, and we will be writing papers this year to disseminate our findings.

 

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[2] Nakata T, Kyoui D, Takahashi H, Kimura B, Kuda T. Inhibitory effects of laminaran and alginate on production of putrefactive compounds from soy protein by intestinal microbiota in vitro and in rats. Carbohydr Polym. 2016;143:61–9.

[3] Shirosaki M, Koyama T. Laminaria japonica as a food for the prevention of obesity and diabetes. Advances in Food and Nutrition Research. 2011;64:199–212.

[4] Kanai T, Matsuoka K, Naganuma M, Hayashi A, Hisamatsu T. Diet, microbiota, and inflammatory bowel disease: Lessons from Japanese foods. Korean J Intern Med. 2014;29(4):409–15.

[5] Yano JM, Yu K, Donaldson GP, Shastri GG, Ann P, Ma L, et al. Indigenous bacteria from the gut microbiota regulate host serotonin biosynthesis. Cell. 2015;161(2):264–76.

[6] Al-Fayez M, Cai H, Tunstall R, Steward WP, Gescher AJ. Differential modulation of cyclooxygenase-mediated prostaglandin production by the putative cancer chemopreventive flavonoids tricin, apigenin and quercetin. Cancer Chemother Pharmacol. 2006;58(6):816–25.

[7] Islam MS, Murata T, Fujisawa M, Nagasaka R, Ushio H, Bari AM, et al. Anti-inflammatory effects of phytosteryl ferulates in colitis induced by dextran sulphate sodium in mice. Br J Pharmacol. 2008;154(4):812–24.

[8] Komiyama Y, Andoh A, Fujiwara D, Ohmae H, Araki Y, Fujiyama Y, et al. New prebiotics from rice bran ameliorate inflammation in murine colitis models through the modulation of intestinal homeostasis and the mucosal immune system. Scand J Gastroenterol. 2011;46(1):40–52.

[9] Shafie NH, Esa NM, Ithnin H, Saad N, Pandurangan AK. Pro-apoptotic effect of rice bran inositol hexaphosphate (IP6) on HT-29 colorectal cancer cells. Int J Mol Sci. 2013;14(12):23545–58.

[10] Choi JY, Paik DJ, Kwon DY, Park Y. Dietary supplementation with rice bran fermented with Lentinus edodes increases interferon-γ activity without causing adverse effects: a randomized, double-blind, placebo-controlled, parallel-group study. Nutr J. 2014;13:35.

[11] Islam J, Koseki T, Watanabe K, Ardiansyah, Budijanto S, Oikawa A, et al. Dietary supplementation of fermented rice bran effectively alleviates dextran sodium sulfate-induced colitis in mice. Nutrients. 2017;9(7):747.

[12] Jostins L, Ripke S, Weersma RK, Duerr RH, McGovern DP, Hui KY, et al. Host-microbe interactions have shaped the genetic architecture of inflammatory bowel disease. Nature. 2012;491(7422):119–24.

[13] Ridenhour BJ, Brooker SL, Williams JE, Van Leuven JT, Miller AW, Dearing MD, Remien CH. Modeling time-series data from microbial communities. ISME J. 2017;11(11):2526–37.

[14] Sonnenburg JL, Bäckhed F. Diet–microbiota interactions as moderators of human metabolism. Nature. 2016;535(7610):56–64.

[15] David LA, Materna AC, Friedman J, Campos-Baptista MI, Blackburn MC, Perrotta A, et al. Host lifestyle affects human microbiota on daily timescales. Genome Biol. 2014;15(7):R89.

[16] Cervantes-Barragan L, Chai JN, Tianero MD, Di Luccia B, Ahern PP, Merriman J, et al. Lactobacillus reuteri induces gut intraepithelial CD4 + CD8αα + T cells. Science. 2017;357(6353):806–810.