Japan Post privatisation takes fresh hit
The government’s effort to break up and privatize Japan Post, the postal monopoly that includes huge financial-services operations, is quickly losing steam, hit by the recession and political instability, reports Wall Street Journal.
The government’s effort to break up and privatize Japan Post, the postal monopoly that includes huge financial-services operations, is quickly losing steam, hit by the recession and political instability, reports Wall Street Journal.
The article continues:
In the latest development, a fight over who should head the company led to the forced resignation of Internal Affairs Minister Kunio Hatoyama, after he lost a battle to force out Yoshifumi Nishikawa, Japan Post’s chief executive.
The political maneuvering comes as financial turmoil has rekindled interest in safe postal deposits and fuelled doubts about private banks. Also, with national elections on tap, Japanese politicians are closely attuned to rural voters, who fear the privatization will result in losses of services and jobs.
Even as the government stands by privatisation, an increasing number of politicians are advocating slowing or reversing the effort.
The opposition Democratic Party of Japan — a party headed by Hatoyama’s brother Yukio and the favorite to win general elections this year — has pledged a “drastic revision” of the postal-privatization plan. Even Prime Minister Taro Aso once let it slip that he was actually against the privatization, drawing criticism from members of his own party.
“No matter which party wins the elections, postal privatization will not move forward,” said Kazuo Ishikawa, a senior research fellow at the Tokyo Foundation, a private think tank. “What we are seeing is a movement to roll back what [former Prime Minister Junichiro] Koizumi tried to do.”
Postal financial institutions world-wide are attracting renewed interest as the financial crisis revealed the vulnerability of commercial banks. In France and the U.K., politicians have called for revising postal-privatisation plans.
Postal banks in nations such as Switzerland, France and Germany have seen sharp increases in deposits and the number of new accounts since last year, according to the Universal Postal Union. UPU director general Edouard Dayan said in an interview such a phenomenon reflects the “image of trust and stability” that postal financial institutions enjoy, adding that postal networks can help stabilize the financial market, in part by offering basic services to households excluded by commercial banks.
Hatoyama’s departure is another blow to Aso. Leaders of the DPJ, which already holds a majority in one of the two chambers in parliament, were quick to blame Aso.
The government’s plan, launched in 2006, calls for Japan Post to be broken up and privatised in a decade-long process. Nishikawa, a powerful banker, was appointed by former prime minister Koizumi to help carry out his signature policy.
