Parliamentary Panel approves postal reform bills in Japan

A parliamentary committee on Friday approved one of Prime Minister Junichiro Koizumi’s key economic reforms to open Japan’s postal services to competition.

The step makes it likely that the legislature will formally approve the bills next week.

Koizumi had to overcome opposition from conservatives within his own party to submit the legislation, which would allow private companies into mail delivery and shift control of the postal service from the state to a public corporation.

The development came en a hole in the state’s monopoly on the postal industry,” he was quoted as saying by Kyodo News Agency.

The lower house of Parliament’s 40-member Public Management committee endorsed the bills Friday afternoon, and they will go to a vote in the full chamber on Tuesday, said parliamentary spokesman Hajime Nakasone.

Postal system reform is an emotionally charged issue in Japan because of the role postmasters play in communities, particularly in remote rural areas. They not only deliver mail, but also manage savings accounts and even run errands for elderly people.

The postal reform bills require newcomers to set up 100,000 postboxes across the country _ a hurdle that prompted Japan’s biggest transport company, Yamato Transport, to drop its interest.

Critics also note that the legislation bars any reductions in the network of 25,000 state-run post offices and limits the type of mail that competing companies can handle.

Crucially, it also won’t loosen government control over Japan’s postal savings system, which _ with dlrs 2.1 trillion in deposits _ is the world’s biggest savings bank.

Koizumi’s compromises to ruling party conservatives caused the Asahi newspaper, a leading Japanese daily, to question his commitment to reform.

Citing the prime minister’s boast last year that “Privatization is no longer taboo with me in power,” the Asahi wondered in an editorial: “Was that all a dream?”