Japan’s lower house approves plan to privatize $3 trillion postal system | VailDaily.com

Japan’s lower house approves plan to privatize $3 trillion postal system

TOKYO – Japan’s powerful lower house of parliament on Tuesday approved a plan to privatize the country’s $3 trillion postal system and create the world’s largest bank, plowing ahead with the prime minister’s reform platform following the ruling party’s landslide electoral victory.The bills met little opposition. Prime Minister Junichiro Koizumi’s ruling Liberal Democratic Party and its coalition partner New Komei Party clinched a two-thirds majority in the 480-member lower house in Sept. 11 elections.The lower house apparently voted along partisan lines, 338-138.The closely watched legislation now goes to the upper house for approval. That chamber rejected the proposal in August, prompting the elections, but government officials say the election results had convinced some former opponents to support the bills.The legislation would split up Japan Post’s delivery, insurance and savings deposit services and sell them off by 2017. The privatization process would begin in late 2007 and create the world’s largest private bank.Proponents argue that the reform would make more efficient use of the Japan Post’s $3 trillion in savings and insurance deposits, while streamlining the country’s enormous delivery service.”We can pave the way for a huge fund … to move from the public sector to the private sector, and about 260,000 full time workers will be employed by private sector without firing a single person,” said Shigeo Oshima, an LDP lawmaker. “This enables us to create a small government.”U.S. Treasury Secretary John Snow, in Tokyo for talks with Japanese finance officials, praised Koizumi for pushing through reforms that he said are helping revive the world’s second-largest economy. Japan is just emerging from more than 10 years of stagnant, inconsistent growth.”It offers the opportunity for far-reaching structural reforms,” Snow said of the postal privatization plan. “We trust and hope that the measure will be successful.”The main opposition Democratic Party of Japan offered an alternative bill that would keep mail delivery and bill payment services under government control, but reduce the savings and insurance deposits controlled by the state.But the DPJ’s legislation was rejected. The Democrats have only 113 seats in the 480-member lower house.Reform opponents fear the bills will lead to job losses and would put ordinary people’s savings in the hands of untrustworthy private investors. They also argue that privatization will lead to a reduction in delivery services in sparsely populated rural areas.Vail, Colorado

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