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Wednesday, March 3, 2004

Koizumi eyes postal reform chief

Prime minister wants privatization completed by 2007


Staff writer

Prime Minister Junichiro Koizumi said Tuesday he will appoint a special minister this summer to oversee privatization of the postal services, hoping the appointment will help complete the reform by 2007.

"It is a big reform. Considering Diet debate on bills, a minister in charge of it should be appointed," Koizumi told reporters.

He stopped short of mentioning the exact timing of the appointment and said he will make a decision in light of progress made in drawing up related bills.

But speculation has been rife that Koizumi may reshuffle his Cabinet after the July Upper House election and appoint economic commentator Naoki Tanaka or Financial Services Minister Heizo Takenaka as postal privatization minister.

Koizumi said he has " several candidates" in mind but did not elaborate.

Privatization of mail delivery, postal savings and postal insurance services is one of Koizumi's key policy initiatives.

The new minister is expected to face a tough task because many lawmakers in the ruling Liberal Democratic Party openly oppose the idea.

Koizumi has tasked the Council on Economic and Fiscal Policy, an advisory panel to the prime minister, to draw up the framework of the privatization plan by fall.

The three services are currently offered by Japan Post, a government corporation created in April to take over the postal services from the governmental Postal Services Agency. The government plans to privatize the entity in 2007.

FSA talks to continue

Talks between the posts ministry and the Financial Services Agency over a bill to allow Japan Post to sell investment trusts will continue until the end of next week, the posts minister said Tuesday.

"Adjustment with the FSA -- now under way -- will likely continue until the end of the second week of March," Taro Aso, minister of public management, home affairs, posts and telecommunications, told reporters.

The FSA has reportedly sided with the banking industry in criticizing the ministry's plan as a means of further enlarging Japan Post's financial operations.

The posts ministry has been seeking to submit the bill at an early date, saying it will precipitate a boost in the number of individual investors buying investment trusts.

"Debate about the plan is not about whether Japan Post would gain or lose large profits. I think the plan would produce favorable effects on the stock market," Aso said.

Japan Post, created last April as a state corporation to take over the functions of the Postal Services Agency, handles a huge amount of assets in the form of postal savings and "kampo" life insurance policies.

But its financial dealings have often been criticized by private-sector financial companies, as well as other countries, as having unfair government backing.



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