Japan Post grabs election spotlight

By Duncan Bartlett
BBC World Service business reporter

Junichiro Koizumi is hoping to capitalise on economic revival

Japan's general election on 11 September is likely to be the most exciting one for decades.

The prime minister, Junichiro Koizumi dramatically called the poll at short notice after members of his own party flatly refused to accept his plan to privatise the post office.

This may sound like a small issue - but in Japan it is seen as a crucial test of Mr Koizumi's determination to overhaul the whole economy.

After all, Japan Post does far more than deliver letters and sell attractive sets of stamps.

It is also a state-owned savings bank with more than $3 trillion in assets, making it by some measures the largest financial institution in the world.

It has 24,700 branches including many in remote locations, and is particularly popular with people in the countryside - especially the older generation, who have been going to local branches for years to pay in their hard earned savings.

Another large part of its business is selling insurance. In fact, it is by far the largest provider of life insurance in the country.

Prime Minister Koizumi claims Japan Post is outdated and needs to be changed. He says privatising it will help modernise Japan's whole economy.

His opponents claim the privatisation would cause hardship to the post office's customers and deprive the government of a valuable source of cash.

Party split

The issue has caused civil war within Mr Koizumi's party, the Liberal Democrats.

How does Japan Post relate to the LDP?

The Liberal Democrats have been in power almost without a break since the end of the Second World War.

But this year LDP candidates will have to fight it out at the polls against a group of rebels who were expelled from the party by Mr Koizumi in the summer after they opposed his reforms.

The future of Japan Post is not the only issue on which they are attacking their former leader: they also complain about his autocratic style of leadership, which has been at odds with the traditional consensus-driven approach to decision-making within Japanese politics.

So Mr Koizumi has turned to supporters from outside the traditional political sphere to help him fight back.

Many of the people he has asked to stand as candidates in favour of reform are women. The Japanese media has dubbed them the "female assassins" as their job is to wipe out Mr Koizumi's opponents in the polls.

Female participation in politics is low in Japan, so the women's activities receive a great deal of attention from the press.

Economic reforms

In addition, Mr Koizumi is keen to take credit for the improvement in Japan's long-stagnant economy.

The country has been in and out of recession for the past 15 years, but this year is expected to grow by about 2%.

Kuniko Inoguchi is one of the LDP's 'female assassins"

Unemployment is falling and most families have seen their incomes rise, and Mr Koizumi hopes he will be duly rewarded at the polls.

But the main opposition group, the Democratic Party, finds fault with Mr Koizumi's economic approach. It claims his reforms do not go far enough and that the government continues to spend too much money on unnecessary projects, such as building new dams and roads.

The Democrat party wants faster and more radical change. Its leader Katsuya Okada keeps a collection of frog figurines in his office in Tokyo to emphasise the message. In Japanese, the word kaeru means both frog and change.

All that has given the media a feast of lively issues to debate. Even voters bored of the traditional political scene have been roused by the contest, stirred by the opportunity to make big decisions about Japan's future.