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    DPRK agrees to abandon nukes

    Posted by Sean at 07:36, September 19th, 2005

    Okay, we’ll have to see what actually comes of this, but strictly as a gesture, it’s good news:

    In a dramatic turn to six-nation negotiations that have been held since 2003, Pyongyang agreed to abandon the weapons and rejoin international arms treaties in exchange for energy assistance from neighboring nations and sovereignty guarantees from the United States.

    Japan’s envoy to the talks in Beijing, Kenichiro Sasae, said North Korea’s nuclear program poses a serious threat to peace in Asia and welcomed Monday’s outcome for finally settling on common goals. Most of Japan, the world’s second biggest economy and host to about 50,000 U.S. military personnel, lies within range of North Korean missiles.

    Japan’s national broadcaster NHK quoted Chief Cabinet Secretary Hiroyuki Hosoda as calling the agreement a positive step but also saying the nations need to “keep a close eye” on North Korea as negotiations proceed. Hosoda also pressed for a resolution to a dispute about the kidnappings of Japanese nationals by North Korea, calling it a key to improved relations between the countries.

    Having to recognize the DPRK’s “sovereignty” in any formal way is galling, but it’s hardly a change from what we’ve been doing in practice. Of course, the DPRK is famous for reneging on agreements, so I’m with Hosoda on this one. We’ll see.


    Koizumi’s post-election China policy?

    Posted by Sean at 08:32, September 16th, 2005

    Simon links to an interesting article by Yoichi Funabashi, an Asahi senior correspondent who’s now a visiting scholar at the Brookings Institution. It asks the question about how the LDP’s landslide relates to China from the opposite direction I’ve been asking it–namely, how will Koizumi’s victory play out in Japan’s China policy, and what will that mean as the two countries evolve economically?

    Curiously enough, foreign policy was almost totally absent from the pre-election debate. Some may perceive this as a sign that Japan is growing increasingly inward-looking, as Koizumi simply wanted to limit the agenda to the single domestic issue of postal privatization. However, this reading would be wrong. Although very difficult to detect since it was discreetly under the radar, I would nevertheless contend that the China factor was actually one of the largest issues in this election, as more than any other factor, a rising China and its direct challenge to Japan set the context for the debate.

    I’m not 100% sure I’m convinced by every jot and tittle that follows, but Funabashi is right in the main. Foreign policy was brought up only by relatively minor opposition parties, and then almost exclusively with reference to the SDF deployment in Iraq and the proposed revisions to the Japanese constitution. Not even specific policy issues that were the subjects of recent flare-ups–such as the disputed fossil fuel fields in the East China Sea–were given attention, let alone the larger question of how Japan intends to maintain its strategic role in a shifting Asia.

    One part I’m not sure about–not that I disagree, mark you; I just think it could go either way–is this:

    Koizumi’s landslide victory may in time prove to be the last gasp of the LDP, as the public likely holds unrealistic expectations of how much Koizumi will be able to accomplish before he steps down next September.

    Given their shocked reactions to their own party’s staggering victory, that was on minds of quite a few LDP members themselves right after the election, too. I wonder, though. Japan is a conformist society, but the Japanese have personal idiosyncrasies like everyone else. Just about everyone here has had multiple experiences with, say, projects at work that failed because protocol and consensus-building were prioritized over practical decision-making. I think it very possible that Koizumi is clever enough to find a way to blame any further stalling of reforms over the next year on, if not hold-outs in the House of Councillors, then federal bureaucrats. In that case, it could be his successor who’s in big trouble and will need to get used to doing a Margaret Thatcher impression.

    Funabashi doesn’t put it this way, but he does by extension raise another very disturbing question: Is it even possible for Japan to fashion a really workable comprehensive China policy, or have conditions gotten to the point that protecting Japan’s interests will mean constantly shifting in response to this week’s constellation of trade and cultural conflicts? Remember that you have to factor in (something else Funabashi doesn’t weigh) that the US and Japan have become even closer military allies over the last several years. The possibilities are endless. It will be very interesting to see what Koizumi does with his momentum over these next few weeks when the sugar high is over.


    新会派

    Posted by Sean at 21:31, September 15th, 2005

    Some of the opponents of Japan Post privatization are forming their own faction in the Diet, or at least proposing doing so:

    Legislators who were dropped by the LDP after voting against Japan Post privatization in the ordinary Diet session but managed to win reelection as unaffiliated candidates have begun working toward the formation of a new faction. Takeo Hiranuma stated to the press on 15 September, “If unaffiliated people of the same way of thinking get together, they can form a single new faction.” There are, however, those among the unaffiliated legislators who are making moves toward uniting forming a united faction with the People’s New Party, so responses may be divided.

    Hiranuma is a former Minister of Economy, Trade, and Industry, BTW. Not a man of mean power and influence.


    What does the PRC think about Koizumi’s victory?

    Posted by Sean at 00:38, September 13th, 2005

    Something interesting I haven’t seen given much play: how did the PRC react to Koizumi’s big win on Sunday? I’ve been looking and Googling, but I haven’t found anything substantive. There’s this from Kyodo about a story in a Singaporean newspaper–which is at least part of the Chinese-speaking world. It says the obvious:

    The Chinese-language Lianhe Zaobao said Koizumi is expected to become even more powerful after this election and could easily win wide support for his views on controversial issues such as his recurring visits to the war-related Yasukuni Shrine. The controversial shrine honors 14 Class-A war criminals along with 2.47 million war dead.

    There’s also a translated Xinhua editorial at The People’s Daily, but it’s pretty muffled, too:

    In terms of foreign policies, the LDP noted the need to improve ties with Asian neighbors. Yet, the points was rarely mentioned in Koizumi’s campaign speeches.

    After the voting, the premier stopped short of dismissing the possibility of paying a visit to the Yasukuni Shrine when he was answering questions on a live program of the public broadcaster NHK.

    His repeated visits to the war criminal-enshrining facility was the major stumbling block in relations with China and South Korea.

    The Yasukuni Shrine issue causes the greatest number of public snits, but there are more important things to think about, trade and energy policy chief among them. It will be interesting to see, and I’m sure we will after everyone’s finished gawking at the numbers and talking about Japan Post privatization.

    Just for a sense of perspective, here’s the section of the DPJ party platform about Japan-China relations; I have no doubt that strategists in Beijing read it:

    The restructuring of Japan-China relations is one of the most important tasks for Japanese diplomacy. [Japan should] build a relationship of trust between the leaders of the two nations, and on that basis, systematize and deepen policy dialogue in fields such as the economy, finance, currency, energy, the environment, maritime activities, and security.

    I looked–pretty carefully, I think–but I didn’t see anything concrete about the big Japan-PRC sticking points. By contrast, the LDP manifesto contained a blandishment or two about mutual prosperity, but there was also this item among its 120 pledges:

    Concerning the Hoppo and Takeshima Islands, we will assiduously pursue a resolution. Further, we will secure the maritime interests of our nation, such as the promotion of the development of natural resources in the East China Sea and surveying of the continental shelf.

    I’m sure the Chinese got that message. The Koizumi administration’s China policy has, after all, not only included refusal to stop visiting the Yasukuni Shrine but also threats to do exploratory drilling in disputed undersea oil and gas fields.

    Added over cold coffee: I asked Simon whether he’d seen anything in the Chinese media, and this is his answer: Why, no, not much. He also notes that such mention as there has been has focused on the Yasukuni Shrine issue.


    開いた口が(まだ)ふさがらない

    Posted by Sean at 22:48, September 12th, 2005

    Koizumi is still saying that he will play by the rules and step down as Prime Minister in 2006, but there are noises about extending his tenure:

    On Sunday, Koizumi reiterated he would step down in September 2006, when his term as LDP president expires, but more and more members of the ruling coalition have floated the idea of possibly extending his term beyond next September.

    “That’s an important matter we have to think about,” LDP Secretary General Tsutomu Takebe said Sunday night about the possible extension.

    “The LDP’s rule [that Koizumi’s term expires next September] is one thing, but on the other hand there’s the question of how we should interpret the people’s will expressed [in the landslide victory] in this election,” said LDP Acting Secretary General Shinzo Abe, who is frequently cited as a possible successor to Koizumi.

    New Komeito representative Takenori Kanzaki also hinted his support for extending Koizumi’s term. “I’ll be speaking about [term extension] on various occasions from now on. Winning this many seats also comes with a certain responsibility for the prime minister,” Kanzaki said Sunday.

    Yeah, Koizumi has a “certain responsibility,” all right. Having finally returned the LDP to complete and utter domination, he’s going to have the party leadership anxious to squeeze whatever remaining gains from him it can. It seems to me that, overall, it would be good for him to groom a successor over the next year and leave office as planned. If Koizumi gets through a few more key policy changes and is able to say, next year around this time, “Thank you, Japan, for giving me the opportunity to do my job. It’s finished. Time to move on to [say, Abe],” it would help to counter the LDP’s image as a party full of people who seek the greatest amount of power they can amass and then keep a death-grip on it well into their dotage.

    Speaking of which, people are already starting to say that it’s scary that the LDP won so many seats because now it’s going to turn into some big, scary juggernaut. Maybe. Let’s remember a few things, though: a lot of government power rests in the appointed officials in the federal ministries, and the elected officials know it. And some of the key public employees don’t even work for the federal ministries. Recall that one of the toughest parts about getting Japan Post privatization through was the resistance of the postal workers’ unions, which threatened not to use their rural outposts to drum up the support of voters for LDP candidates. Koizumi rode into office on a wave of popularity the first time, too; but we all saw soon enough that that wasn’t enough for him to get everything he wanted by a long shot.

    Hell, the Japan Post privatization package itself has already been watered down considerably; in fact, the watering down started quite a while ago. (Once again, the analogy is not perfect, but check the potential parallels with the California power privatization fiasco.) Koizumi’s next project is said to be the integration of the government’s two pension systems: the one for civil servants and the one for the rest of us salaried types. Worryingly, he’s been quoted as saying, “It will necessary to listen to a variety of opinions while formulating the plan.” Sound familiar?

    In any case, it is true that the LDP focused hard on Japan Post privatization during the run-up to the election. It’s ridiculous, though, to say that that means that voters, in practice, were voting on that single issue and thus can’t be said to have expressed support for Koizumi’s overall policy platform. Note that, if it’s the DPJ we’re talking about, its opposition to the LDP’s Japan Post scheme was very well-conceived.

    No, the Japanese public has not lost its ambivalence toward the SDF deployment in Iraq or the possible amendment of the constitution to allow for combat participation in collective-defense missions. But please. The other parties were all over those issues. They had plenty of opportunities to make their case. Japanese voters, in turn, had the opportunity to, say, vote in a lot of LDP candidates in single-seat districts but “balance” them with more proportional-representation seats from the opposition. They failed to do so. They failed to do so in a big, bad way. They failed to do so even in Tokyo, which is not generally an LDP stronghold. They failed to do so in such a big, bad, Tokyo-included way that it’s hard to interpret the election results in any way but that the electorate wants Koizumi and his crew of upstarts to do what they say they’re going to do.


    Japan to DPJ: “Get lost”

    Posted by Sean at 23:02, September 11th, 2005

    Yesterday was the birthday party of a very close friend, so from 19:00 on I was pretty much away from sources of news, except when I talked to Atsushi at midnight-ish. He told me then that it was 自民党大勝利 (jimintou daishouri: “big victory for the LDP”), but I spent the rest of the night carousing and have just awakened.

    My loverman was not exaggerating. The ruling coalition won over 300 seats. And the LDP alone–without its coalition partners–has an outright majority:

    The 44th lower house general election, in which the major point of contention was which party would control the government, was held on 11 September, with vote counting beginning immediately [after the polls closed]. The LDP won overwhelmingly in both single-seat districts and proportional representation blocs, and together with the Komeito topped 300 seats. It appeared to be an expression of confidence in the trajectory of party president Jun’ichiro Koizumi’s reforms, and it is probable that the Japan Post privatization bills will be passed in a special diet session at the end of this month.

    The LDP will control the chairs of, and won more than the 269 seats necessary to form an absolute majority of members in all of, the lower house’s standing committees.

    In the morning print edition of the Nikkei, the numbers are updated:

    LDP: 295
    New Komeito: 30
    DPJ: 113
    Social Democrats: 6
    Communists: 9

    The rest of the seats that have been counted went in handfuls to unaffiliated candidates or those with the People’s New Party, which was founded by rebel LDP legislators who voted against Japan Post privatization. DPJ leader Katsuya Okada has already announced officially that he’s stepping down. Prime Minister Koizumi looks as if he really enjoyed swallowing that canary.

    A 2/3 majority! I can’t even wrap my head around that–and I like Koizumi and was rooting for him. Of course, there’s a lot to think about. The LDP made Japan Post its focal point for the election, but the opposition parties were very vocal about Article 19, the SDF in Iraq, and social welfare policy. Those are issues on which the Japanese are deeply divided, and the election results surely don’t signify an unqualified mandate for all aspects of Koizumi’s foreign policy. Nevertheless, the voters had a chance to reject the Koizumi government, and it means something that they didn’t. (It’s worth noting, though, that coalition partner New Komeito is much more pacifist than the LDP–certainly than the Koizumi cabinet–but despite its new dominance in the lower house, the LDP still needs the New Komeito to maintain its upper house majority.)

    The English editions of the major dailies have their stories so far here: Asahi, Mainichi, Yomiuri, Japan Times. (Does the Sankei even have an English edition?)

    Added at 17:11: Another interesting aspect of the snap election was the use of 刺客 (shikaku: “assassin,” lit., “specialized stabber”) candidates. These were the high-profile candidates fielded by the LDP in single-seat districts against those (formerly) in its own party who had voted against Japan Post reform. Most of the assassin candidates won.

    Added at 18:31: Okay, just one more link to the Mainichi, whose English reports are most closely reflecting what we’re seeing in non-linkable broadcast media. This one quotes a series of hilariously stunned LDP members all saying, essentially, “Whoa!” The original Japanese article is here, and its lead paragraph is far funnier:

    As day broke the morning after lower house election day in the Nagatacho district of Tokyo, the LDP was having an attack of “296-seat shock.” “We won so many seats, the prospect of the next election is frightening.” With the LDP victorious and jubilant, and the DPJ soundly defeated and dazed, the blessed and the cursed were sharply distinguishable.

    BTW, that former cabinet member quoted in the English article actually said this: “勝ったのにどうかと思うけど、怖い。ものが言えなくなってしまう。ファッショだよ。” (“We won, but I wonder whether this is for the best. It’s frightening. I’m just dumbstruck. It’s fascistic.”) Yes, that last sentence is a literal translation, but since the quotation ends there, I’m not sure whether the official was referring to the cult of personality that can be said to surround Koizumi or to the high percentage of seats won or what.

    Added at 19:24: Riding Sun calls the success of the Koizumi administration’s strategy to field high-profile women candidates a vindication of the “Japanese Babe Theory.” I think he’s right–it’s not a joke. Most of the women “assassins” seemed smart and lively and, dare I say, sassy. They stood in clear visual contrast to the stereotypical LDP politician. At the same time, I believe the move was also smart because the women candidates suggested a connection to the social and family issues–employment and pension figures, especially, but also education and child and elder care–that the party PR machine was deemphasizing but that most voters care the greatest deal about.

    I don’t want to downplay the capabilities of any of the candidates. They may, in fact, have expertise in hard policy issues that hasn’t been given much attention yet. (At least one, Yuriko Koike, has already been Minister of the Environment.) But image matters, especially when the key issue in an election is an unsexy topic such as Japan Post privatization.

    NHK’s political yak show has all the party leaders on right now, BTW. No one is saying anything even slightly more interesting than you’d expect. Takebe is, of course, in his cool-biz shirt, looking as if he were headed off to the club for a few whiskeys the minute the lights go down; he appears very somber, but maybe he’s just tired. Okada has regained some of his color, but of course he looks very unhappy, and it seems somewhat unkind for NHK to be showing him in extreme close-up when he talks.

    LOL. Tamisuke Watanuki, a leader of the Japan Post opponents who were abandoned by the LDP, is talking. The expression on Takebe’s face across the table! He looks as if he wanted to vault across the studio and throttle him.


    投票日

    Posted by Sean at 22:46, September 10th, 2005

    Today is the snap election here. We’ll see whether Koizumi’s conviction that the electorate supports his reforms–or supports the way he’s going about them–is justified. Atsushi voted last week while he was here. The street was a madhouse yesterday when I got my haircut. (For those who follow my hair-related travails, yesterday found me being massaged with some cinnamon/ginger-y oil and then washed down with apple-scented shampoo. I half-expected to be loaded onto a platter, garnished with mint leaves, and served for dessert with hard sauce and whipped cream.) The Komeito flacks were, indeed, focusing exclusively on Japan Post privatization as they walked by and shook hands. The communists went by in a van blaring about health care and Article 9. We’ll see who gets what when the results come in.


    Campaigning continues

    Posted by Sean at 00:26, September 3rd, 2005

    Leaders of the major parties showed up on NHK this morning to discuss their platforms for the election on 11 September. Koizumi appeared alone for the LDP, still doing the cool-biz thing. He spoke with conviction as he always does, but I’m not sure that if I didn’t already agree with most of his policies he would have convinced me (not that it matters much, since I’m not a Japanese citizen).

    The two women who appeared to speak for the Social Democratic Party were clearly aiming for the housewife/working woman vote. They played up the number of people with at-will contract and part-time jobs instead of full-time regular positions. (One of their proposals is legislation to guarantee that part-time workers are compensated exactly the same as “comparable” company workers.) They talked about the SDF’s non-combat involvement in Iraq as a dangerous blow to Japan’s vow of non-aggression in the constitution. Their conversation was clearly rehearsed, but sounding artificial is not the sin in Japan it is in America.

    The DPJ was next. Man, has Katsuya Okada slept at all this year? He looked green. He was sunken-cheeked and hollow-eyed. He was accompanied by Ho Ren, who was well-spoken but has a smile that the television camera made look like Mother Bates’s grinning skull at the end of Psycho. From the looks of things, they were representing the Cadaver Party. Even so, it must be admitted that Okada presented the DPJ’s opposition to Japan Post privatization in a way that was pointed and internally coherent. What needs to be done to stop the wasteful use of so much capital that goes through Japan Post is to (1) change the way money is allocated in the government and (2) shrink the amount of household wealth citizens can pour into postal savings accounts and insurance policies. He succeeded in presenting it in a way that made Koizumi sound as if he were obsessed with proving a political point rather than interested in fixing the government. Very shrewd. Too bad he looked as if he’d had to be exhumed for the occasion. The next week will be interesting.

    FWIW, the Nikkei‘s latest web-based poll indicates that 54% of decided voters who responded plan to vote for LDP candidates for single seats. Of course, only 55% of respondents were decided, so WIW may not be much.


    Sometimes the sun goes ’round the moon

    Posted by Sean at 07:26, August 28th, 2005

    Prime Minister Koizumi is taking a modest view of the significance of his efforts to privatize Japan Post:

    Prime Minister Koizumi has christened his recent dissolution of the House of Representatives the “Japan Post-Galileo Dissolution,” borrowing the name of Galileo Galilei, the Italian physicist who advanced the idea that the Earth was not the center of the universe.

    In response, Shizuka Kamei, a member of the group of Representatives who banded together to vote against the Japan Post privatization bill, shot back, “That guy? He’s the Ptolemaic!” What do Galileo scholars think about all of this?

    “As a researcher, I wouldn’t trot out Galileo comparisons too lightly–that’s my unvarnished opinion,” said Professor Ichiro Tanaka, a science and technology historian at in the graduate department of natural science research at Kanazawa University and author of Galileo.

    The Japanese words here, incidentally, are 地動説 (chidousetsu: “Earth” + “moves” + “argument” –> “heliocentric theory”) and 天動説 (tendousetu: “sky” + “moves” + “argument” –> “geocentric theory”).

    So–is Koizumi about to be excommunicated? Whatever outcome you want from the election, you can, of course, find a poll that supports it. The Yomiuri has this summary of where things stand at this point, which should cheer supporters of the Koizumi cabinet:

    “If the LDP continues to do well, we might well end up with fewer than 150 seats out of a total 480,” a senior DPJ member said.

    “The LDP’s divisions over postal reform, led us to believe we were on the eve of grabbing power. But if we lose by a big margin this election, it’ll be us, not them, that will be split,” he admitted.

    The DPJ’s fate, as in previous elections, is believed to lie with floating voters. Since the party has long depended on them, DPJ members know that such voters are fickle at best.

    Koizumi and the LDP have insisted postal reform is the dominant campaign issue. “We’d like to get pensions back into the limelight. We’ll ask people, ‘Which is more important, postal services or pensions?’ and then win back their attention and support,” a senior DPJ member said.

    A Yomiuri Shimbun poll Friday found the DPJ had an edge of nearly three percentage points over the LDP among floating voters.

    Asked which party they would vote in the election, 11.5 percent of those with no party affiliation said they would vote for the DPJ while 9.2 percent said they would vote for the LDP.

    In a Yomiuri survey conducted on Aug. 9, the DPJ was ahead of the LDP by 10.9 percent to 5.6 percent. But the most recent poll, released on Aug. 19, found the LDP ahead of DPJ, 12.5 percent to 11.2 percent.

    Of course, there are still two weeks until the election, so there will be plenty more blustering and polling between now and then.

    It’s interesting that that DPJ guy was talking about potential rifts in his own party. Just today there was this exchange:

    LDP Secretary General Tsutomu Takebe said that, assuming the ruling coalition maintained its majority in the House of Representatives, “there will inevitably be a major shift in the political landscape, given that there are many in the DPJ who also support Japan Post privatization.” He indicated that his perception was that such developments could cause the DPJ to split. Responding, DPJ leader Katsuya Okada countered, “That’s an extremely rude thing to say. Impossible!”

    The DPJ also pointed out, naturally, that the LDP also has members who didn’t go along party lines.

    Much is being made of the fact that the LDP is focusing obsessively on Japan Post privatization, with the opposition parties figuring they can use it to their advantage and win voters over by shifting the discussion to other issues. Perhaps. Not all of Koizumi’s policies have been popular, and the communists and social democrats, for example, are trying to capitalize on the possibility that Article 9 of the constitution could be amended to allow for collective self-defense and on the increasing number of workers without positions as regular company employees.

    The LDP has some potential tricks up its sleeve, though. It’s use of “assassin” candidates is described by the Mainichi here:

    The LDP is reportedly planning to place its high profile candidates, referred to in Japanese as “shikaku,” or “assassins,” high on the party’s proportional representation list, basically ensuring them victory in the election.

    But candidates standing for re-election to the Lower House, who are likely to face a tough battle in the election, are complaining that the preferential treatment of such candidates is unfair.

    The LDP has pitted the high-profile candidates against rival candidates opposed to the postal privatization bills promoted by Prime Minister Junichiro Koizumi.

    The party’s proportional representation list will be released on Aug. 29. If the “assassins” are placed high on the list as expected, the party’s leadership is likely to come under fire from party members seeking re-election.

    There have been plenty of complaints that the LDP’s funkier high-profile candidates are inexperienced politically; pushing them to the top of the proportional representation roster (the list of districts is here in Japanese, BTW) is seen as a kick in the teeth to party loyalists who supported Japan Post privatization but may not win seats in their individual districts. The proportional representation list is to be released tomorrow, so we’ll see what it looks like.

    BTW, proportional representation, for those who find the Mainichi explanation confusing, involves setting aside 180 lower house seats and 98 upper house seats to be divided among 11 zones (large regions of Japan such as Hokkaido, Tohoku, and Tokyo) rather than little individual districts. Voters select a party to get the proportional representation seats for their zones; each party gets the same proportion of seats as it got votes. The idea is to keep parties that have significant support but didn’t win any seats with individual candidates from being shut out of the Diet entirely.


    Lesser of two evils

    Posted by Sean at 04:07, August 21st, 2005

    This editorial from the Nikkei raises good, albeit depressing, questions about the plans the two major parties have for Japan Post:

    The DPJ plan would maintain Japan Post as a semi-public corporation but lower the cap on savings account balances for a single depositor from the current 10 million yen to 7 million yen by next year, and from there down to 5 million yen over several years, so that the approximate 220 trillion yen now held in postal savings would shrink by half. There would also be some sort of method used to decrease the number of new policyholders for insurance. The party touts its plan as a way of realizing a more definite transfer of capital from the post offices to private banks and insurance companies than the LDP plan would: “A change in the flow of capital from public to private.”

    That’s one way of thinking, but it leaves more than one question open. If the amount of capital contracts greatly, not all of the 26000 regular employees of Japan Post will be needed, but the DPJ plan doesn’t say anything clear about personnel reductions. The party says, “Personnel levels will, of course, be adjusted as more workers reach mandatory retirement age,” but to the extent that the Japan Post unions and other organizations, which are antipathetic to personnel reductions, are expected to form a layer of support for the party, the plan lacks persuasiveness without concrete proposals for personnel management.

    The DPJ plan maintains Japan Post as a semi-governmental corporation but says that it will investigate the full spectrum of options, including integration with federal financial institutions. Privatization is also included among the options. However, if the option of not privatizing Japan Post outright is not selected for now, then there will be no choice but to use money from the profitable deposit and insurance divisions to make up for losses by the postal services division if it once again becomes unprofitable as trends such as e-mail cut into its business. In extreme cases, it’s possible that tax money will need to be used to rescue postal services.

    Of course, it’s not a sure thing that the LDP’s privatization plan is going to bring us salvation, either:

    On the other hand, the privatization bill to be resubmitted by the LDP would split postal services, savings, and insurance into three separate corporations, then establish a fourth for counter services that would absorb the majority of current post office employees. A holding company would manage these four organizations. Government guarantees on postal savings and insurance would be abolished.

    This is privatization in outline, but as a result of compromises with the former Mori faction, added provisions mean that in substance, the three divisions will continue to function as a single monolithic body, and furthermore, and significant government interests will remain.

    For example, the holding company is a public entity for which the government will provide more than a third of its capital. On top of that, the holding company will be able to continue to hold shares in the savings and insurance corporations even after March 2017, when the transition to privatization is to be completed. That means there is a real worry the flow of capital from public to private hands will not be effected: government interests in the organizations’ financial operations, including where capital is allocated, will remain all along.

    This isn’t new–I’ve discussed everything in the above paragraphs in scattered posts from time to time, but it’s a good summary.