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Koizumi Cabinet E-mail Magazine No. 160 (October 21, 2004)

[Lion Heart -- Message from Prime Minister Junichiro Koizumi]
(Provisional Translation)

Prime Minister Junichiro KoizumiProfile

Privatization of the postal services: "entryway" to reform

Junichiro Koizumi here.

Since the start of the extraordinary session of the Diet last week, many questions are being raised and discussed. On the domestic front, the issue of politics and money, privatization of the postal services, reform of the social security system, three-part reform package of "leaving to the regions what they can do," revitalization of the economy, measures against disasters and public safety issues have been discussed. On foreign policy and security, reconstruction assistance to Iraq and North Korea have been taken up.

I have received comments from readers that, "According to public surveys, the majority of the people of Japan wants the Koizumi Cabinet to place emphasis on the reform of the social security system, centering around pension funds. Only a very small number of people are interested in the privatization of the postal services," as well as, "It looks as if Prime Minister Koizumi intends to carry out only the privatization of the postal services."

I have mentioned several times in this e-mail magazine that "the privatization of the postal services is at the heart of reforms."

Many criticisms have been raised about special public corporations on their careless operations. Although we have been advancing the reform of the special public corporations, this reform is logically at the "exit" end of our stream of reforms.

The money that people have put into their postal savings, postal life insurance and the pension fund has been used as operating funds for special public corporations. However, when inefficient operations run by special public corporations fall into the red, the government cannot ask the people who have placed trust in the postal savings to cover the loss. In the end, therefore, the government has no choice but to turn to tax to make ends meet.

In order to reform this practice, there is a need to change the overall structure of the flow of funds. Currently the funds are collected at the "entrance," or the postal services, channeled through the Fiscal Investment and Loan Program, and eventually allocated into the hands of special public corporations, at the end of the flow or "exit." My aim is to push through a grand-scale reform covering the whole path from "entrance" to "exit" of funds, and to change the flow of funds to "from public sector to private sector" and for the private sector to efficiently and effectively utilize these funds.

Concerning the Fiscal Investment and Loan Program, the old structure in which the government managed all the postal savings and pension funds has already been abolished. Since taking office, I have advanced reforms to abolish and privatize special public corporations. These efforts include privatizing highway public corporations and abolishing the Government Housing Loan Corporation while having the private financial agencies provide housing loans in its place.

The privatization of the postal services, which are the "entrance" of funds, is therefore the biggest reform that is yet to be carried out.

I am convinced that we do not need 400,000 civil servants to operate the three postal services. There are post offices located throughout the country. They currently provide the three services of mail delivery, savings and insurance. But, once they are privatized, many more new services can be offered.

In the course of advancing structural reform, the privatization of the postal services is a key measure for administrative and financial reforms and to vitalize the economy.

Since last week, we started a special series in the Japanese version of this e-mail magazine featuring the privatization of the postal services. Minister of State for Privatization of the Postal Services Heizo Takenaka contributed an article to this last week, and this week I have asked President of Japan Post Masaharu Ikuta to express his thoughts. I plan to share in this e-mail magazine the broad range of opinions from people both for and against the privatization of the postal services, the users of the postal services as well as postal workers. I also intend to talk about the importance of postal services privatization on various occasions in a comprehensible manner in the hope of gaining people's understanding on this matter.

Yesterday, on October 20, I met with President Tarja Halonen of Finland.

Finland is famous as being home to Santa Claus and Moomin. Recently, however, they have also gained prominence for their IT industry, such as cellular phones. Finland has long been a close friend to Japan, and at the dinner President Halonen and I never ran out of topics to talk about covering culture, science and technology, to the great Finnish composer Jean Sibelius, in addition to politics, economy and the international situation.

Leaders from various countries will be visiting Japan, including Prime Minister Ferenc Gyurcsany of Hungary next week, and the presidents of Kenya and Nigeria early in November.

I will strive to deepen friendly bilateral relations and cooperative relations through summit meetings with those countries to expand the sphere of international cooperation.

* The title of this column "Lion Heart" is a reference to the Prime Minister's lion-like hairstyle and his unbending determination to advance structural reform.

[What's up around the Prime Minister]

- Japan-Finland Summit Meeting
Prime Minister Koizumi held a meeting with Ms. Tarja Halonen, the President of the Republic of Finland.

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General Editor: Prime Minister Junichiro Koizumi
Chief Editor: Deputy Chief Cabinet Secretary Hiroyuki Hosoda
Publication: Cabinet Public Relations Office
1-6-1 Nagata-cho, Chiyoda-ku, Tokyo 100-8968, Japan

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