The government’s blue-ribbon panel on administrative reform concluded Aug. 21 that the government should be revamped into a Cabinet Office, 10 ministries and two agencies by January 2001.

The Administrative Reform Council, headed by Prime Minister Ryutaro Hashimoto, reached its conclusions after four days of intensive debate on streamlining the bloated government, currently comprising 22 government bodies, including 12 ministries.

The council also drew up a plan to privatize the life insurance system operated by the Posts and Telecommunications Ministry. The plan is part of a highly sensitive political issue.

Two other operations run by the posts ministry — postal savings and mail delivery — will be moved to a new agency.

In addition, efforts should be made to eventually hand over postal savings to private management, according to officials who held a briefing on the council’s discussions. Kiyoshi Mizuno, secretary general of the council, said the panel did not have enough time to talk about whether the private sector should be allowed to enter the postal service.

Kuniko Inokuchi, a panel member and a professor at Sophia University, said the council generally agreed to maintain postal services under the government’s umbrella and to have the nationwide network of post offices handle various additional tasks.

She said the network can better provide the public with services since Japan’s 24,600 post offices reach virtually every part of the country.

The panel agreed to create a postal agency that would be under the jurisdiction of the newly planned General Affairs Ministry; it would handle postal savings and mail deliveryservices.

The question of privatizing state-run postal services has been a focal point in downsizing the post-war administrative system.

The three postal services have long been criticized for affecting the private sector’s business since they are backed by the government and provide a safe haven for deposits that private banks and insurers cannot match.

A recommendation by the panel to keep two of the three services intact was expected to meet fierce criticism from private banks and insurers — the post ministry’s de facto competitors. But it was also likely to meet with rancor from the public since Hashimoto’s reforms were originally intended to take away nonpolicy-related government tasks from the central government.

Concerning reform of the Finance Ministry, the panel suggested the previous day that both fiscal and financial functions remain within the ministry. The suggestion has ignited criticism for going against reform efforts.

A team of 13 experts, together with Hashimoto and Kabun Muto, director general of the Management and Coordination Agency and the minister in charge of administrative reform, had been at a Tokyo hotel since Monday to hammer out the blueprint for a slimmer, more efficient government.

The proposed 13 central government agencies are: the Cabinet Office, the National Public Safety Commission, the ministries of: General Affairs, Justice, Foreign Affairs, Finance, Environment Safety, Employment and Welfare, Industry, National Land Preservation, National Land Development, Science, Technology and Education, as well as a body responsible for national defense.

The panel did not come to a conclusion on whether to upgrade the Defense Agency to a full-scale ministry, opting to leave the decision to lawmakers.

Some members had strongly suggested that the National Public Safety Commission — which would assume the tasks of the National Police Agency, the Maritime Safety Agency and drug-control administration from the Health and Welfare Ministry — be given ministerial status. But the idea was dropped.

The members also considered scaling down the Home Affairs Ministry to an agency with three bureaus for local administration, local finance and local tax. But they concluded that the three should be integrated into the newly planned General Affairs Ministry.

Based on the outcomes of the four-day talks, the two leaders of the panel are expected to draft a preliminary report by Sept. 3.

The ruling alliance of the the Liberal Democratic Party, the Social Democratic Party and New Party Sakigake is expected to discuss the report and help finalize the streamlining plan by November — early enough to submit a package of bills to the next regular Diet session, which convenes in January.

Hashimoto has pledged to introduce the reformed administrative system in January 2001.

The panel members agreed in principle to introduce new quasi-governmental organizations to handle nonpolicy-related matters. But they did not reach a consensus on the status of public servants.

Muto, who is scheduled to report the results of the latest talks to the next Cabinet meeting Tuesday, said that although strong protests against reform from vested interests are expected, the government should not fail to carry reforms out because of the strong demand from the public.

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