Japan PM to press ahead with controversial postal reform

Japanese Prime Minister Junichiro Koizumi reiterated Tuesday the need for planned controversial post office reforms despite differences within his ruling Liberal Democratic Party (LDP).

Koizumi’s pet project to privatize the national postal service has divided the ruling party because his plan risks offending the one million Japan Post workers who traditionally have voted for the LDP.

“With no reform, we will see no growth. Reform is necessary in any era,” Koizumi told an annual convention of the party, which has ruled Japan almost continuously since it was founded about 50 years ago.

“The LDP must continue to push for reform by going back to our founding principle that we are a national party that seeks prosperity of the entire Japanese public,” he said.

The party will submit postal reform bills to parliament after lawmakers return from a recess on Friday but some LDP members have openly said they will try to block their passage.

Koizumi’s postal reform plan calls for spliting the post office into four entities starting in 2007.

The aim is to revitalize the economy by allowing private carriers and financial institutions to compete in huge markets now dominated by Japan Post.

Political analysts said Koizumi was trying to set the stage for the controversial reform before his second term as party president and thus prime minister ends in September 2006.

The post office manages some 355 trillion yen (3.5 trillion dollars) in savings and insurance funds, making it the world’s largest financial institution in terms of assets.

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