The Cabinet this week decided to revamp the two-year-old privatization process for Japan Post group. The decision, which responds to fears among some people that Japan Post group may curtail services in the countryside, emphasizes the public role of Japan Post group.

The privatization begun on Oct. 1, 2007, was aimed at making Japan's postal services, including banking and insurance services, more efficient; ending the practice of using funds deposited in postal savings accounts for wasteful government projects; and, instead, increasing the flow of those funds to the private sector.

Under the government decision this week, Japan Post will be required to make not only postal services but also banking and insurance services available nationwide on an equitable basis. The government also plans to use the network of some 24,000 post offices as bases to help narrow economic gaps and protect the rights of weaker members of society. Post offices would thus serve as outlets for administrative services such as nursing care.

To ensure "universal services" throughout the country, the government plans to reorganize the current setup of Japan Post group. Currently, Japan Post Bank Co., Japan Post Insurance Co., Japan Post Service (mail delivery) and Japan Post Network Co. (over-the-counter services) operate under the wing of Japan Post Holdings Co. The Cabinet decision is expected to help dispel complaints that this complicated setup has contributed to lowering the quality of services at post offices and thus making it impossible for elderly people in remote areas, for example, to rely on mail carriers to act as agents for postal banking and insurance services. The sale of government-held shares in the firms will be frozen.

The government must consider how to pay for the implementation of its plan. The key is finding how to increase the efficiency of Japan Post group, including making it profitable through the development of new revenue-making services. The government also should make sure that Mr. Jiro Saito, a former vice finance minister chosen to serve as Japan Post Holdings' new president, will not pursue a policy line that costs taxpayers.