Full privatization of Japan Postal Services difficult

An adviser to Japan’s Prime Minister Junichiro Koizumi on Thursday suggested that it would be difficult to fully privatize Japan’s gigantic postal services.

A planned public postal corporation should eventually be transformed into an entity with part of its equity held by the government, Satoru Matsubara, a member of a panel on postal services advising Koizumi, said in an interview with Jiji Press.

The corporation’s full privatization would be difficult as the assets it will inherit from the Postal Services Agency are too huge to sell to the private sector, said Matsubara, also an economics professor at Toyo University. The assets to be carried over by the corporation, slated to come into being in April 2003, include “yucho” postal savings and “kampo” insurance premiums. It will also inherit the Postal Services Agency’s mail business.

The panel is expected to come up with its conclusion on the nation’s postal services possibly in August.

Matsubara stressed that there would be few other options than letting the government partly own the entity to be transformed from the public corporation in privatizing the currently state-run postal services. Privatizing the postal services is a pet idea of the reform-minded prime minister.

He indicated that the set of four bills to deregulate the postal businesses, which were enacted Wednesday, were far from sufficient. Koizumi has gained little ground in his battle over the bills with postal tribe lawmakers of his ruling Liberal Democratic Party who have special interests in the postal businesses, Matsubara said.

He cast doubt over Koizumi’s leadership in wrapping up other bills to further advance structural reforms.