The Hindu : International : Koizumi wins a round in reform battle

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Tuesday, Jul 12, 2005

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International

Koizumi wins a round in reform battle

P. S. Suryanarayana

"Agenda of reforms needed to give a thrust to economic superpower"

SINGAPORE: Japanese Prime Minister Junichiro Koizumi is bracing himself for a tough challenge in the upper chamber of Diet or Parliament after successfully piloting in the House of Representatives a bill on the privatisation of postal services.

The passage of the politically sensitive bill was seen as a feather in the cap of Mr. Koizumi who has pledged to "ensure this bill is enacted." In his view, an agenda of reforms is needed to give a thrust to the sluggish economic superpower.

Postal services reform, entailing the management of about 340 trillion yen in postal savings and life insurance alone, "is at the heart" of the economic agenda. Nearly 400,000 civil servants run these two services and the mail network.

With some members of his own Liberal Democratic Party voting against the bill, it was adopted by a slim margin: 233 to 228. The passage was preceded by 110 hours of heated debate in the relevant special committee itself.

Mr. Koizumi has persistently advocated "structural reforms" in the face of opposition from power-brokers, famously dubbed by critics the "shadow shoguns," and other groups with a stake in the state's control of some major economic activities.

While the planned reforms of the banking and financial sectors too have sparked controversies, Mr. Koizumi and his critics see postal privatisation and the foreign policy of supporting the ongoing U.S.-led war in Iraq as the defining aspects of his administration.

The postal bill, he argues, "is an important pillar that will support the revitalisation of the economy" by bringing into existence a "small government." He prefers to "leave to the private sector what it can do" and "leave to the localities what they can do."

As for the support for the U.S. in Iraq and Afghanistan, Mr. Koizumi's line is that Tokyo should remain friendly towards "allies in need" and begin to play international roles commensurate with its political aspirations and economic contributions at the U.N.

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