Japan

Sep 13, 2005

Good news in the mail

TOKYO - The Liberal Democratic Party's landslide victory in Sunday's election will hasten the passage of the postal privatization bills at the upcoming extraordinary Diet session. Twelve of the 28 Liberal Democratic Party upper house lawmakers who voted against the postal bills or abstained from voting had indicated by Sunday that they had changed their minds and will back the bills if they are resubmitted to the Diet. With others expected to join suit following the LDP's spectacular performance Sunday, the number of LDP rebels is likely to shrink to less than the 17 votes needed to re-defeat the bills.

The government and the ruling coalition are looking to convene an extraordinary parliamentary session around September 20 and aim to pass the postal bills in October. "The will of the people, as shown through the election results, needs to be respected," said

a lawmaker, who had previously belonged to a faction headed by former LDP member Shizuka Kamei and voted against the postal bills in the August 8 upper house session.

Junichiro Koizumi and New Komeito chief Takenori Kanzaki will hold a meeting Monday afternoon to confirm that they will maintain the current coalition. Koizumi will launch his third cabinet after he is reappointed prime minister in the extraordinary Diet session. But the cabinet line-up is expected to remain roughly the same as Koizumi places a priority on deliberating the postal privatization bills. A full cabinet reshuffling and the appointment of senior LDP officials are expected to take place after the legislation's passage.

Despite the certainty over the postal bills, the legislation's passage, however, will hinge on three key factors. The first focal point is whether the postal bills will be modified. Koizumi has stated that the bills do not require any changes, suggesting that major revisions are not in the works. But some LDP lawmakers have urged that additional details proposed by Koizumi to persuade postal privatization opponents to change their minds should be reflected in modifications to the legislation. The proposed details include allowing cross-shareholding arrangements among postal entities. There are some concerns, however, that allowing such changes will turn the postal group into a mammoth corporation.

Another key issue is a possible change in the proposed April 2007 start of postal privatization. Citing delays in information systems preparations, some ruling coalition and Japan Post officials have urged a later starting date. Koizumi has also shown a willingness to be flexible on this issue. But if the date is pushed back, the pace of postal privatization could lose some of its current momentum, throwing cold water on the overall reform initiative.

The role of the special postal privatization committee is another focal point. Under the postal bills, the committee, to be launched next spring would be tasked with overseeing the expansion of postal operations from an outsider's perspective. Under the original plan, the committee would be able to make recommendations to the government, but it has since seen that role diminished to an advisory capacity. To avoid creating unfair competition for the private sector, the government needs to ensure that the committee's powers are not diluted any further.

(Asia Pulse/Nikkei)

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