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Last Updated: Monday, 1 October 2007, 05:43 GMT 06:43 UK
Japan begins post office reform
A postman leaves the Nihonbashi post office in Tokyo (file image)
Postal privatisation has been a controversial issue in Japan
Japan has begun the long process of privatising its huge state-run post office, after years of intense political wrangling over the issue.

Over 10 years, Japan Post will split into four entities; banking, insurance, mail delivery and counter services.

The new bank will become the world's largest commercial banking entity, with US$3 trillion (1.5tn) in assets.

The move follows a campaign by former PM Junichiro Koizumi, who made postal reform the key to his economic agenda.

A ceremony was held at Japan Post's headquarters in Tokyo to mark the start of the privatisation process.

New Prime Minister Yasuo Fukuda described the post office network as an "important asset" for the people of Japan.

The privatised entity "will further effectively utilise the network and will improve convenience", he said.

More competition

JAPAN POST IN NUMBERS
Manages 25% of Japan's personal assets
25,000 offices and 260,000 employees
330 trillion yen (nearly $3 trillion) in savings and deposits
85% of population has postal savings

The issue of postal reform has dominated Japanese politics for several years.

In September 2005 Mr Koizumi called a snap election when members of his own party blocked his privatisation package in the upper house.

He won a landslide victory and secured passage of his proposals when he took the bills straight back to parliament after the polls.

Proponents of the plan argue that the reforms are essential to stimulate growth and open up government-dominated sectors to greater competition.

But critics have said that the reforms will reduce services, particularly in rural areas, and could trigger job cuts for some of the post office's more than 250,000 employees.



SEE ALSO
Japan unveils post shake-up plan
01 Aug 06 |  Business
Japan MPs approve postal reforms
11 Oct 05 |  Asia-Pacific
Koizumi's gamble pays off
12 Sep 05 |  Asia-Pacific
Japan post office's rural redoubt
08 Sep 05 |  Asia-Pacific

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