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In Japan, postal service debate sparks rival visions of nation's future

MISAKUBO, Japan—By many accounts, Japan has the best postal service in the world. At the most far-flung of its 24,700 post offices, such as in this mountain village, mail carriers make house calls to wrap packages, deliver cash and even arrange insurance.

Service is so quick and reliable that Japanese commonly use the mail to send fruit, fresh seaweed and cut flowers as gifts. Parcels are delivered three times a day.

But Japan Post is in the political crosshairs. As a combination postal service, insurance behemoth and savings bank, it locks up assets greater than $3 trillion, making it effectively the world's largest savings bank.

Breaking up Japan Post is a cornerstone of Prime Minister Junichiro Koizumi's campaign to win re-election Sunday. He asserts that it must be dismantled to halt politicians from siphoning off near-limitless funds for public works, colluding with construction firms to build roads to nowhere.

By putting the postal service's assets to more rational use, Koizumi says, Japan can stimulate growth and better confront the challenges of a rapidly aging population and shrinking work force.

The debate is turning the election into a test of competing visions of the future. While Koizumi preaches smaller government, others say rolling back service to rural areas would shake a nation that relies heavily on the postal system.

The privatization campaign has stirred apprehension in rural villages such as Misakubo. Employees offer a level of service that U.S. residents could hardly imagine. Postal carriers commonly lend a hand to the weak and elderly. They also go to people's home to collect savings deposits.

"When I go to collect money, people ask me, `What's going to be the future of the post office?'" postal employee Toru Ito said.

"If there's an old lady who needs something taken off the shelf, and the postman comes by, she asks him to help," said Robert A. Feldman, Morgan Stanley's chief economist for Japan, noting that such service doesn't come cheaply for Japan's taxpayers. Civil servants cost "about double" what private-sector employees do, he said.

Under Koizumi's plan, the insurance and banking businesses would be severed from Japan Post by 2007, but would wait until 2017 for full privatization. Some economists say Japan Post may end up axing as many as half of its 260,000 employees.

It might seem that the ruling Liberal Democratic Party is shooting itself in the foot. It once guarded the interests of public employees, such as postal workers, in exchange for political backing. Some rural postal jobs are hereditary, and postmasters mobilize support for regional LDP politicians and help get out the vote.

But now the party is at war with itself. When 37 LDP legislators in the lower house of parliament voted against a postal privatization bill on Aug. 8, Koizumi booted them from the party and called snap elections. He's said he aims to purge pork-barrel LDP politicians who oppose small, efficient government.

Critics describe Japan Post as part of an "iron triangle" among politicians, bureaucrats and construction companies that's rife with corruption and needless spending.

The huge assets the postal service collects finance low-interest government debt that allows politicians to spend vast sums on tunnels and bridges of little utility.

The size of California, Japan uses as much concrete each year as the United States. Some 6 million Japanese work in construction, 12 times higher as a percentage of the work force than in the United States, said Jeff Kingston, a historian at Temple University Japan who's studied links between politicians and construction firms.

"They pour a whole lot of concrete here ... for boondoggles and white elephants," Kingston said.

At the heart of the dispute are Japan Post employees, who are far more than mail carriers. They also serve as insurance salesmen and bank tellers.

Employees greet and bow to anyone who enters the post office in this town in coastal Shizuoka prefecture. Carriers on motorbikes deliver mail along winding mountain roads. If residents don't have wrapping material for packages, carriers arrive to help.

As rural youths have migrated to the industries that cluster near cities, towns such as Misakubo have been hollowed out. Its population stands at 3,392, down from more than 10,000 several decades ago. Forty percent of the town is 65 or older, and deeply reliant on postal delivery for contact with family.

"This is rice my daughter-in-law's family has sent to us!" said a beaming Sueko Takagi, a spry 81-year-old, as Ito walked into her unlocked home with nary a knock and announced a delivery.

Several Misakubo banks have closed, leaving the post office as a key institution in which to save, transfer and receive money.

"People are worried," local postmaster Shigeru Takamura said. "They hear that the mail service, the savings system, the insurance system will be separated, and if one isn't profitable, it will be shut down."

Opposition politicians scoff at Koizumi's assertions that a postal overhaul is fundamental to Japan's eventual transformation.

"I don't believe that the people are naive enough to accept the prime minister's assertion that foreign affairs and other issues will be resolved if the postal services are privatized," Katsuya Okada, the head of the Democratic Party of Japan, said last week.

Even so, some rural residents, such as Hiroyuki Okuyama, a legal clerk, said any change to the system might have a heavy impact on remote rural residents, who live so far away that no commercial delivery service will bring them parcels.

"The post office delivers deep into the mountains. Even private couriers leave parcels here and pay the post office to deliver them," Okuyama said.

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(c) 2005, Knight Ridder/Tribune Information Services.

PHOTOS (from KRT Photo Service, 202-383-6099): JAPAN-POST

GRAPHIC (from KRT Graphics, 202-383-6064): 20050906 Japan Elect

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