Japan Post - Postal Privatization

Postal Privatization

The company was born on April 2, 2003, as a government-owned corporation, replacing the old Postal Services Agency (郵政事業庁, Yūsei Jigyōchō?). Japan Post's formation was part of then prime minister Junichiro Koizumi's long-term reform plan which would culminate in the full privatization of the postal service. The privatization plan encounters both support and opposition across the Japanese political spectrum, including the two largest parties, LDP and DPJ. Opponents claim that the move would result in the closure of post offices and in job losses at the nation's largest employer. However, proponents contend that privatization would allow for a more efficient and flexible use of the company's funds that would help revitalize Japan's economy, which is still recovering from a series of four recessions since 1991. Proponents also claim that Japan Post has become an enormous source of corruption and patronage. Koizumi calls the privatization a major part in his efforts to curb government spending and the growth of the national debt. Most opposition parties support postal privatisation, but not Koizumi's bill. Many consider the bill deeply flawed with too long a time for full implementation and too many loopholes that might create a privatization in name only.

In September 2003, Koizumi's cabinet proposed splitting Japan Post into four separate companies: a bank, an insurance company, a postal service company, and a fourth company to handle the post offices as retail storefronts of the other three. Each of these companies would be privatized in April 2007. In 2005, a bill to complete this reform passed the lower house of the Japanese legislature by a handful of votes, with many people from Koizumi's LDP defecting. The bill was subsequently defeated in the upper house (which cannot be dissolved) because of scores of defections from the ruling coalition. Koizumi immediately dissolved the lower house and scheduled nationwide elections to be held on September 11, 2005. He declared the election to be a referendum on postal privatization. Koizumi subsequently won this election, gaining the necessary supermajority and a mandate for reform, and in October 2005, the bill was passed to privatize Japan Post in 2007.