06-07-2005 04:04									#1
	Defeating the financial godzilla Support Apolyton buy from Amazon

Koizumi is only one step away from it.

http://news.ft.com/cms/s/a9b444ba-e...000e2511c8.html

quote: Koizumi wins parliament vote on postal reform >By David Ibison in Tokyo >Published: July 5 2005 08:40 | Last updated: July 5 2005 08:40 Junichiro Koizumi, Japan’s prime minister, fought off a rebellion from within his own party and scored the most significant victory in his 30-year political career on Tuesday after the powerful lower house of parliament approved the privatisation of the state-owned post office. Mr Koizumi had described the ballot as a vote of confidence in his leadership and threatened to dissolve parliament if lawmakers rejected the privatisation bills. Such a move would have triggered an immediate political crisis and prompted a snap election. The bills will now go to the upper house of parliament, where a similarly difficult fight is expected. If approved, they will become law. Japan’s post office is the largest state-owned financial services organisation in the world, overseeing Y350,000bn ($3,130bn) of funds. Its privatisation is a symbol of Mr Koizumi’s drive to reform Japan’s public sector and reduce the government’s paternalist role in the economy. There was deep opposition from anti-reform elements of the ruling Liberal Democratic Party ahead the vote, culminating in the resignations of a number of senior lawmakers on Tuesday morning in protest against Mr Koizumi’s leadership. LDP faction leader Mitsuo Horiuchi said he would resign, as did Seiichi Eto, senior vice minister of health, labour and welfare, Masahiro Morioka, parliamentary secretary at the same ministry, and Makoto Taki, senior vice minister of justice. In an attempt to quell the rebellion, Mr Koizumi warned his cabinet at a meeting on Tuesday morning that the vote was “crucial”. Chief cabinet secretary Hiroyuki Hosoda delivered a more direct threat, saying cabinet members who voted against the bills would be “severely punished”. Despite the threats, around 40 LDP members voted against the bills and the final approval was only secured by a narrow margin of 233 votes in favour and 228 against. The LDP holds 250 seats in the 480-seat lower house. Under Mr Koizumi’s plan, the post office would be split into four units – savings, insurance, mail delivery and counter services – from 2007, with stakes in the units gradually floated in the 10 years to 2017. The privatisation is controversial within the LDP, which has been using postal savings to fund pet projects and soak up the government’s massive bond issuance, as well as relying on its nationwide network as an unofficial vote-gathering machine.

This is pretty significant considering the massive size of its assets and the misallocation of funds it has been causing. It may well be Japan's single biggest millstone to growth.

	06-07-2005 04:34									#2
	Support Apolyton, buy Civilization: The Boardgame

Is that $3 billion or $3000 billion?

If it's the former, it's peanuts, if it's the latter it's as big as whole Japanese economy

	06-07-2005 04:37									#3
	Support Apolyton or Terrorists Win

$3,000 billion or $3 trillion is the correct figure. What the hell is the Post Office doing with this you might ask? Only in Japan.

	06-07-2005 04:51									#4
	Support Apolyton, buy Call to Power 2

quote: Originally posted by VetLegion Is that $3 billion or $3000 billion? If it's the former, it's peanuts, if it's the latter it's as big as whole Japanese economy

Countries usually have savings several times the size of a single year's GDP. You cannot really directly compare savings with GDP since the latter is a flow, and national savings are accumulated over the years. What's so unusual that so many of Japan's savings are concentrated in a single firm, and one that's prone to meddling from politicians.

	06-07-2005 04:54									#5
	Increase Your PM Length

The post office?

	06-07-2005 04:57									#6
	Support Apolyton, buy Civilization III: Complete

In Japan, the Post Office is everyone's savings account. Pretty wierd, eh?

	06-07-2005 05:06									#7
	Support Apolyton or Terrorists Win

Japan isn't the only country where the Post is also a bank.

	06-07-2005 06:20									#8
	Support Apolyton, buy Civilization III: Complete

Uh, I hope that they intend to break it apart into little bits before privatizing...

	06-07-2005 06:43									#9
	Support Apolyton or Terrorists Win

The post office is the best bank here, mainly because its national. My pay has to be deposited into a local bank, which doesn't have ATM machines outside of the prefecture. Most banks are like this. The post office, otoh, has ATMs everywhere, so its by far the most convenient option.

As for the reforms...

quote: Uh, I hope that they intend to break it apart into little bits before privatizing...

As far as I know, Koizumi's plan is to seperate the different functions of the post office (mail, banking, insurance, etc.) before privatization.

	06-07-2005 06:46									#10
	Support Apolyton, buy GURPS/ Alpha Centauri

I suppose they'll at least seperate the banking from the mail delivery.

So far as post office / bank combinations, it's not such a bad idea for rural areas.

	06-07-2005 08:00									#11
	Enter the AD-FREE zone

If they actually do it, this indeed would be a significant positive change. To be honest, I never thought the Japanese government was capable of such a significant change without a crisis pushing them to it.

	06-07-2005 08:17									#12
	Increase Your PM Length

They are in a crisis.

	06-07-2005 09:08									#13
	Full PM-box? Change here!

Not really.

	06-07-2005 11:23									#14
	Put an end to popups!

A crisis for the government as they haven't been able to resolve the decade long recession.

	06-07-2005 12:02									#15
	Full PM-box? Change here!

This is stupid. It seems that the problem with this is that the post office is politicized, not that it's government owned. Many a bank in the world are government owned and don't suffer this direct intervention by politicos in their management.

	06-07-2005 19:08									#16
	Enter the AD-FREE zone

Examples?

	06-07-2005 19:26									#17
	Support Apolyton

The majority of the Israeli banking system, from the mid-80s, when it was nationalized, after the banks bloated their own stock by making their own pension funds buy their stock, which was followed by a crash - and the government had to bail them out. This situation remained till the recent years, when they were mostly privatized.

	06-07-2005 19:37									#18
	Support Apolyton, buy Civilization: The Boardgame

Umm...a 3 tril dollar post office?

why doesn't japan have multiple nationwide banks?

	06-07-2005 19:40									#19
	Full PM-box? Change here!

It has, and from what it seems, teh 3v1l guvmnt post office is competing with them just fine - Neo liberal agenda: "break everyworking government project - say it doesn't work - privatize - repeat".

	06-07-2005 23:36									#20
	Put an end to popups!

From The Economist:

quote: Like bank deposits, postal savings are fully protected by the government; unlike the banks, however, Japan Post will not have to pay any deposit-insurance premiums. This, complains the Japanese Bankers Association, has saved the post office around ¥4.5 trillion in the past decade. Life insurers are miffed too. Japan Post will not have to pay into the industry's policyholder-protection fund. Its policies, unlike the private sector's, are guaranteed by the government. The private industry has not recovered from the 1980s, when the post office, which did not have to worry about profitability, started raising rates of return on its policies. Prodded in part by the finance ministry, private life insurers followed suit. The burden of these high payout rates has pushed six life insurers into collapse in the past four years, and has left others struggling to survive.

And I doubt you can compare a bail-out of private banks by temporarily nationalising them. Little opportunity to politicize them, big incentive for the management to keep operating with profitability in mind, as they know they'll go private again.

	07-07-2005 05:15									#21
	Avatar Enlargement: We've got the solution

quote: A crisis for the government as they haven't been able to resolve the decade long recession.

Koizumi's government is the most popular and long-lived Japanese government in a long time. It's certainly not in a crisis.

	07-07-2005 13:19									#22
	Support Apolyton buy from Amazon

quote: And I doubt you can compare a bail-out of private banks by temporarily nationalising them. Little opportunity to politicize them, big incentive for the management to keep operating with profitability in mind, as they know they'll go private again.

Little opportunity to politicize them? you mean during almost two decades of government ownership?

I agree that the Postal Office' government guarantee is unfair, though.

	08-07-2005 23:14									#23
	Support Apolyton, buy Galactic Civilizations: Deluxe Edition

Well I can't discuss with you about Israeli banking since I know nothing about it, but I don't see what's the point in keeping banks in gov't ownership if the gov't cannot influence the management.

	08-07-2005 23:20									#24
	Remove this text

Using profits for public use? It becomes increasingly important with the falling corporate tax rates...

	08-07-2005 23:26									#25
	Increase Your PM Length

You might also argue that a gov't can pay down chunks of their debt with receipts from privatisation.

Last edited by Colon on 08-07-2005 at 23:48

	13-07-2005 00:49									#26
	Support Apolyton buy from Amazon

...necromancing thread....

quote: You might also argue that a gov't can pay down chunks of their debt with receipts from privatisation.

It's like selling your profitable grocery store to pay off gambling debt....