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Privatizing the Post Office

Privatizing the Post Office

Japanese politics expert Patricia Maclachlan identifies the challenges to the future privatization of the Japanese post office.

By Vincent Lim
Staff Writer

"The postal system has become a symbol of tradition," Maclachlan said.

Although Japan's postal system will be gradually subjected to market forces beginning in 2007, the commissioned postmasters and their political allies are mobilizing to soften the effects of the privatization of the post office, argued Japanese political scholar Patricia Maclachlan at a Nov. 13, 2006 talk sponsored by the Paul I. and Hisako Terasaki Center for Japanese Studies. Maclachlan discussed the historical roots of Japan's postal system and the political power of the Zentoku, the national association of commissioned postmasters.

The Liberal Democratic Party (LDP) that has held power in Japan since 1955—except for a brief period in the 1990s when a coalition of opposition parties formed a majority in government—has received significant voting support from Zentoku. In Japan, the postmasters are responsible for collecting approximately one-quarter of household savings and perform a number of important social services for local communities.

In spite of this longstanding political alliance, then-Prime Minister Junichiro Koizumi took aim at Zentoku and its supporters within the LDP in August 2005, dissolving the lower house of the Diet and calling a snap election after his proposal for the large-scale reform and privatization of the postal system was rejected by the upper house. After expelling LDP candidates who had voted against him, Koizumi's LDP won in a landslide and went on to pass the privatization bill. But he may never fully achieve his goal, according to Maclachlan, an associate professor in the Asian Studies and Government departments at the University of Texas at Austin.

"A political alliance [was born] between the postmasters through Zentoku and the Liberal Democratic Party from 1955 on that was to remain in place into the 21st century," said Maclachlan. "Despite Koizumi's successes in late 2005, there is still room for that alliance to remain significant in Japanese politics."

One obstacle to the future of postal reform will be Japanese citizens' general lack of interest in it.

"Once [this] issue moves out of the political and into the implementation processes of change, it moves off the radar screen of the media and therefore of ordinary citizens," Maclachlan said.

Maclachlan claimed that "what the voters were voting for was Koizumi" and argued that citizens were more interested in seeing the LDP win than seeing the postal system reformed.

Although the reforms passed, it remains unclear how they will be implemented under new Prime Minister Shinzo Abe because many of the details have not yet been worked out.

Maclachlan added that there remains strong support in rural areas of Japan for the postmasters and LDP politicians who still see the benefits of a public postal system.

History of the Post Office

Maclachlan said the history of the Japan's public postal system helps to explain why Zentoku has become one of the most influential interest groups in Japanese politics.

The government monopolized the postal system in 1871 by wresting power away from private courier companies that handled mail for elite officials, in a bid to reduce the overall cost of mail delivery. It said that all citizens would receive the same service at the same price regardless of where they lived.

"The post office was a misunderstood, but nevertheless very important harbinger of modernization," Maclachlan said. "Postmasters helped ordinary Japanese become more in tune with the rhythms of modern life."

The postal savings system was created soon after, in 1875, to introduce the Japanese to modern savings techniques. The savings system was instrumental in allowing new businesses to develop, and citizens came to trust the postal system and postmasters to take care of their money. Japan's postal savings system today is among the world's largest financial institutions—with nearly 331 trillion yen ($3 trillion) of assets.

"In part because of the trust that was given to ordinary postmasters," Maclachlan said, the postal savings system grew rapidly during the late 19th century. Many postmasters also became social pillars in their communities and occasionally sought election to local public office.

"By the end of World War II, there were roughly 13,000 commissioned postmasters—of that number 2,000 were occupying positions in town, city or village government," Maclachlan said. "For the post-war period, this positioned them to become allies of the ruling Liberal Democratic Party."

After World War II, the postmasters and their employees assumed a number of social welfare functions in their local communities—focusing on the specific needs of the elderly. As a result of these services, and of the post office's image as both a "harbinger of modernization" and symbol of traditional values, many ordinary Japanese have been less than enthusiastic about reform.

"The postal system has become a symbol of tradition," Maclachlan said.

Terasaki Center for Japanese Studies

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