Japan’s parliament has approved a retreat from plans to privatise the huge banking and insurance arms of the national postal system, formally repudiating a flagship reform pushed through by liberalising former prime minister Junichiro Koizumi.
A revised postal system reform law, enacted on Friday after a landslide vote by the upper house of the Diet, scraps a requirement for Japan Post’s postal and insurance businesses to be fully privatised by 2017.
It also clears the way for the two businesses –among the world’s biggest financial institutions –to offer new services even if the state sells only half of its stake in them.
The law, passed by the upper house by a vote of 216 to 17, underscores Japan’s dramatic turn away from policies pushed by Mr Koizumi, who had made postal privatisation his highest profile policy for a 2005 general election that his Liberal Democratic party won by a landslide.
1. Mr. Koizumi's party won the 2005 election by a landslide,
but of the 87 "Koizumi Children" who were newly elected to the lower house of the Diet in 2005 on Koizumi's coattails, only 10 are still in the lower house. According to Yoshitada Konouike, an upper house member who in 2005 had repudiated the decision to privatize "Yucho", as the postal savings system is known in Japan, "The Koizumi Children are almost extinct. We are seeing the results of a change in the political winds."