The Hatoyama administration has made it clear that it will revamp the Japan Post group companies' privatization process, which started Oct. 1, 2007. Privatization was aimed at making postal services efficient and letting the money held by the postal bank and insurance services flow into financial markets, instead of being used solely for the government's fiscal investment and loans program.
The main reason to revamp the privatization process is the fear that privatization will cause difficulty for rural residents. The administration, which attaches importance to the revitalization of rural regions, considers a revamp unavoidable.
At present, four units — Japan Post Bank Co., Japan Post Insurance Co., Japan Post Service Co. (mail delivery) and Japan Post Network Co. (over-the-counter services) — operate under the wing of Japan Post Holdings Co.
A plan to financially strengthen the post offices by operating convenience stores in some branches is not working well. And Japan Post Bank, which continues to support the network of mail delivery and over-the-counter service firms, is not doing well in its finance industry ventures.
The network of some 24,000 post offices is a lifeline in the countryside because they also serve as savings and insurance offices. They are needed all the more by rural residents these days because depopulation in rural regions is driving businesses away.
Under the current plan, there is no guarantee that Japan Post Bank and Japan Post Insurance will continue to let post offices in the countryside serve as their agents after their shares are sold to private investors in and after fiscal 2010. This is because rural post offices' earning power is weak.
The administration thinks that Japan Post Holdings President Yoshifumi Nishikawa's approach of giving priority to economic efficiency leads to negligence of rural regions and that he should resign. It is the responsibility of the government and other political parties to make post offices viable entities that continue to serve residents in the countryside.
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