The forces behind the public works spending that eroded the Japanese economy in the twentieth century have resurfaced recently, but the symbol of structural reform initiated by former prime minister Junichiro Koizumi stands on solid ground. On October 1, 2007, the privatization process for Japan’s postal service passed the second and most important milestone in a long-term plan designed to promote greater competition in the Japanese economy. Japan Post, which had been changed from a government agency to a state-controlled corporation back in 2003, was reorganized into four different business units—banking, insurance, mail service, and over-the-counter services—under Japan Post Holdings Co., Ltd., a holding company that will manage those units with indirect government control until complete privatization in 2017. Changing Japan Post’s 136-year-old culture requires patience and a commitment to overcoming both structural and political challenges. There will no doubt be a few bumps in the road, but the potential economic advantages make this process worthwhile. Ultimately, the privatization of Japan Post will not be blocked by domestic politics. [...]
Center for Strategic and International Studies, 1800 K Street, NW, Washington DC, 20006 | Tel: 202-887-0200 | Fax: 202-775-3199
