Tuesday, July 5, 2005

Japanese lower partliament votes for privatization

by Brian Turner

In Japan on Tuesday, the lower house of parliament voted to go ahead with privatization of the nation’s state-owned post office.

The vote, which must be followed by approval by the upper house of parliament, was widely seen as a vote of confidence in prime minister Junichiro Koizumi.

Koizumi’s own party, the Liberal Democratic Party, opposed his plan, which would divide the post office into four parts: savings, insurance, mail delivery, and counter services beginning in 2007.

From that date, shares would be offered for sale to the public gradually through 2017.

Mr. Koizumi had said earlier that if his plan did not pass, he would dissolve parliament and call elections, and cabinet members were warned again before Tuesday’s vote that the consequences of opposing the prime minister’s plan would be very serious.

About 40 of the 250 members of the LPD in the lower house voted against the measure, and after the vote was taken several LDP leaders resigned their positions.

The Japanese post office is the largest state-owned financial services institution in the world, with responsibility for ¥350,000 billion ($3,130 billion) in funds.

 

 

 

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