Neoliberal reforms arrive in the mail

The hundred-year-old principle of a postal service for all and at an accessible price is being threatened by the advance of economic liberalization, say experts gathered here for the "strategy conference" of the Universal Postal Union (UPU).

Even the venerable UPU, with its 128-year history, risks disappearing — or at least losing its intergovernmental status – – in the wave of private groups that are seeking to exploit postal services.

UPU director-general Thomas E. Leavey pegged technology as one of the factors that "threatens the financial foundation of the postal service" and, as a result, the capacity to sustain the universal network of the service.

"Technology, through substitution and lower prices, continues to drain demand away from letters, which remain the core activity of the postal service," said Leavey.

With the new technologies emerged "a rich stream of alternative communications," which are often faster, more convenient and cheaper than the physical letter, acknowledged the chief of an organization that was founded in 1874 to unite all postal systems worldwide.

The figures of the UPU, a body that is part of the United Nations system, reflect the contraction of the traditional postal "market," indicating that the number of post offices scattered worldwide, with most in the developing world, dropped from 712,000 in 1995 to 660,000 in 2001.

The number of postal employees has also fallen, from 6.1 million to 5.2 million in the same six-year period. Letter traffic had grown to 8.54 billion in 1990, but fell to 8.17 billion in 1995, and was 7.48 billion last year.

Meanwhile, domestic parcel traffic saw 3.2 billion packages delivered in 1990, 4.3 billion in 1995 and 4.7 billion in 2001. International parcels totalled 53.7 million in 1990, 41.9 million in 1995 and 38.1 million in 2001.

These figures do not include the flow handled by private companies, which are very active in the delivery of letters in more than 50 countries and in parcels in more than two-thirds of the world's nations.

Leavey, in his report presented during the UPU strategy meeting under way this week in Geneva, admitted that "the traditional approach of a 'one size fits all' postal service is no longer appropriate."

"Increasingly, governments and postal operators alike are accepting the fact that they must go beyond the provision of a basic, predominantly uniform universal service," he noted.

On another front, the postal community must face up to the challenge of the postal development gap between industrialized and developing countries.

Not only is access to quality postal services much more limited in the developing world, but also the existing services are "often not of high quality," said the director-general of the Bern-based UPU.

"In still far too many countries, postal infrastructure is either non-existent or in desperate need of repair," said Leavey.

In 2001, an average of 73 units per world inhabitant were dispatched, but 415 units per inhabitant corresponded to the industrialized North and just 17 to the developing countries.

This disparity is also reflected in the bodies created by the countries of the North and South. While the developing South is trying to reinforce the role of UPU, the industrialized nations of the North — Europe and North America — have united in the International Post Corporation (IPC) to defend their interests.

Paul Jackson, head of the Triangle Group, a private consulting company that provides assessments in the postal industry, told the meeting in Geneva, "The UPU and IPC should be merged."

The IPC is a cooperative association of 23 national postal operators, which handle about 65 percent of international postal traffic.

Among these operators are some traditional postal companies that have adopted the laws of the market and are expanding to other countries, though without renouncing their status as state enterprises.

The four largest postal companies in Europe are Germany's Deutsche Post, the TPG Group of the Netherlands, the French La Poste and Britain's Consignia. In addition to providing postal services they work in more profitable areas like parcels, express delivery, logistics, financial services and banking.

One of the heads of Deutsche Post, Gunther Bohm, predicted that within a few years, "the majority of UPU member countries will have reformed postal services oriented to market principles."

In these times, the UPU cannot play the role of an umbrella organization for postal companies operating according to the principles of market economy, Bohm stated.

Jackson, of the Triangle Group, argued that the UPU should no longer be part of the UN system because the reality today is that international mail "is not driven by national government organizations."

On average, national post offices have already lost 30 to 40 percent of their outbound business. As such, said the expert, governments no longer have a positive role to play.

The German postal executive, meanwhile, noted that the UPU does not gain any advantages by belonging to the UN system, and that "it is not taken especially seriously by some of the 'strong' U.N. organizations."

Bohm mentioned the case of the World Trade Organization (WTO), which has not accepted the UPU as a participant in sessions in which international delegates are negotiating the liberalization of the General Agreement on Trade in Services (GATS).

Talks began at the WTO in January 2000 to deepen the liberalization of markets in the services arena, which covers sectors like telecommunications, finance and banking, tourism, transportation, health and education, among others.

Rubens Ricupero, secretary-general of the UN Conference on Trade and Development (UNCTAD), underscored to the UPU members that they would not be able to discuss the future of postal services without addressing the links between that sector and the trade negotiations on services.

In addition to providing its specific services, postal enterprises also utilize services from other sectors, "for instance, transportation — air or maritime transport," Ricupero said.

However, these two areas of transport services are "lagging behind in trade negotiations," noted the UNCTAD chief. In the case of air transport, a series of aeronautics accords exist that regulate that area.

Maritime transport, meanwhile, has its own "curious situation," said Ricupero, pointing out that the world leader in trade liberalization, the United States, is the major obstacle to liberalizing maritime traffic because of its domestic laws that prohibit it.