Japan: Ministry Concerned About Koizumi's Plan to Privatize Postal Services

From WORLD NEWS CONNECTION, April 25th, 2001

By article Minesuke Nakamura With Junichiro Koizumi, a proponent of the breakup of postal
administration, coming to power, the Ministry of Public Management,
Home Affairs, Posts and Telecommunications, which has jurisdiction
over the postal services, is evidently worried about the future
scenario for privatization. Koizumi stresses that he accepts the policy already in place of
moving to a "state-run public corporation" in 2003. He has, however,
argued that the three postal services of mail, savings, and
insurance should be privatized after that. While his proposals have
recently been toned down to a certain extent, he remains an advocate
of complete privatization. The issue at hand is in the process of moving toward a public
corporation, to what extent the private sector will be allowed to
participate in the postal services when the bill to create the
postal public corporation is presented to the Diet in next year's
regular session. Mail service for letters, postcards, and so forth, which is
currently a state monopoly, is likely to be opened to the private
sector. The Public Management Ministry argues that if this service
is completely opened to private delivery service companies, "the
profitability of the postal services as a whole will suffer, and it
will be impossible to maintain uniform postal charges throughout the
country." Therefore, only part of the mail service, such as bulk
direct mail, should be liberalized. On the other hand, the delivery service companies think that "the
mail service is a huge market for delivery service" and demand an
expansion of the scope of free participation. Coordination is
expected to see much rough sailing. While the Public Management Ministry is supposed to deliberate on
the scope of private sector participation, if Koizumi, who has
indicated he would "think of methods to do this," exercises his
leadership, the ministry may be forced to modify its position. Specific ideas on the wage scale, taxation, or other management
details of the "state-run public corporation" have not been
presented yet. It is believed that if Koizumi gives strong
consideration to privatization after postal administration is moved
to the public corporation, he will reduce special tax treatment for
the corporation in order to create a competition environment similar
to the private sector. To that extent, the public corporation will
be hard pressed in its business operations, and intense resistance
from the Public Management Ministry can be expected. The breakup of postal savings, with a deposit balance of 250
trillion yen and criticized for oppressing private business, is a
pet project of Koizumi. While he has not been making unequivocal
statements on this subject like before, it can be expected that he
may come up with ideas to reduce the volume of postal savings, such
as by lowering the maximum limit of deposits (presently set at 10
million yen). Furthermore, the possibility that Koizumi may draw up
a concrete scenario for privatization in his effort to push forward
his reform policy cannot be discounted. In such a case, he is bound
to clash fiercely with the Public Management Ministry. [Description of Source: Sankei Shimbun (Internet version-WWW) —
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Commerce. Source : World Reporter (Trade Mark)WORLD NEWS CONNECTION, 25th April 2001