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Bills to privatize Japan's sprawling postal system, including the world's largest savings bank, were passed by parliament's lower house yesterday, setting the stage for Prime Minister Junichiro Koizumi to achieve the core of his reform agenda.
Rejection of the bills in August by the upper house, where ruling party rebels joined the opposition to defeat them, prompted Koizumi to call a September 11 election which he cast as a referendum on privatisation, his long-held goal.
A landslide victory in that election by Koizumi's Liberal Democratic Party (LDP)- which won 296 of the 480 lower house seats while its junior partner, the New Komeito party, took 31 - prompted most of the bills' former opponents in the ruling party to back the legislation, which is expected to be passed by the upper house this week, probably on Friday.
Under the legislation, Japan Post, which has 25,000 post offices, 260,000 employees and some US$3 trillion in assets, would be split into four entities and privatised in 2007.
A newly created holding company would sell all shares in the postal savings and life insurance businesses by 2017.
"It's great," Koizumi told reporters.
"They made their judgement following the electorate's will," he said, referring to the passage in the lower house by a margin of 338-138.
Koizumi, 63, has been advocating reform of the postal system for most of his three-decade-long political career.
Privatizing the mail delivery, savings and insurance system fits squarely into his agenda of weaning the LDP from its addiction to wasteful public spending that won votes from vested interests but spawned repeated scandals and inflated government debt.
Japan Post has been a major buyer of Japanese Government bonds as well as a source of funds for public works.
The privatization battle has also had a personal element for Koizumi, a maverick politician who has turned his reputation as a loner and eccentric into an image as a bold reformer since taking office in 2001.
Koizumi began his career as a protege of Prime Minister Takeo Fukuda, arch-rival of "shadow shogun" Kakuei Tanaka, a populist premier who perfected the art of Japanese pork-barrel politics in which postal savings funds played a key role.
Koizumi has vowed to press on with his agenda for change, including reform of semi-governmental financial institutions, before stepping down as prime minister when his term as LDP president expires in September 2006.
(China Daily October 12, 2005)
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