Prime Minister Junichiro Koizumi has told a British financial newspaper that his top priorities for his second year in office are to privatize the postal services and public organizations, including Japan Highway Public Corp., and to accelerate the disposal of banks’ bad loans.

Koizumi told the Financial Times in an interview Friday that structural reform “is proceeding well.” The interview was published Monday.

On the privatization of Government Housing Loan Corp., the paper quoted Koizumi as saying that, contrary to opponents’ worries that the private sector would be unable to provide housing loans, “As soon as we announced we intended to scrap (the public body), those private financial institutions . . . have come up with more favorable products.”

On bad loans, Koizumi said he has ordered financial institutions to accelerate bad-loan disposal, adding that he has been labeled “the Callous Reformer” in Japan because of his efforts.

“But from overseas, I’m criticized for being lukewarm,” he said.

Regarding the privatization of the postal system’s mail, savings and insurance services, Koizumi drew an analogy to an attack on a castle surrounded by moats, suggesting there are several battles to be fought on the way to full privatization of public institutions.

“The postal services are the outer moat,” he said.

Koizumi’s Cabinet last week endorsed the remaining two bills of a set of four on postal services deregulation and plans to submit them to the Diet soon.

The Cabinet endorsed and submitted to the Diet the first two bills, featuring fundamental reforms of postal service-related operations, on April 26, despite opposition from some heavyweights in the ruling Liberal Democratic Party.

The full package is designed to allow private firms to offer mail services and establish a new public corporation to take over the existing postal services — mail, postal savings and “kampo” life insurance — from the government in 2003.

The issue of privatizing the postal services is highly controversial because many ruling as well as opposition party lawmakers have vested interests in them.

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