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Passage of postal reforms gives Japan's Koizumi a major victory

TOKYO—Prime Minister Junichiro Koizumi fulfilled his biggest career ambition Friday when proposals to privatize Japan's $3 trillion postal system sailed past their last hurdle in parliament and into law.

The upper house of the Diet, or parliament, approved the proposals 134-100, following approval in the lower house earlier in the week.

The laws will effectively carve up the world's biggest financial institution into separate entities for banking, insurance and postal delivery by 2007, and will completely privatize the insurance and savings divisions by 2017.

A euphoric Koizumi declared the laws "a miracle of politics."

"It is the Japanese people who made this miracle happen," he said.

Friday's approval was the final act in a political drama that began this summer, unfolding with the 63-year-old Japanese leader calling snap national elections last month that some considered political suicide.

Instead of losing the elections, Koizumi won in a landslide, achieving a mandate to forge ahead with economic reforms to meet the challenges of Japan's aging and declining population. Future reforms may tackle red tape in the pension and health-care systems and reduce the burdens they put on government resources.

The summer crisis began when anti-privatization renegades in Koizumi's Liberal Democratic Party joined the opposition in rejecting postal privatization in a key upper house vote Aug. 8. In a response some analysts viewed as rash, Koizumi dissolved the Diet and set elections.

Outflanking the opposition, the shaggy-haired prime minister quickly ejected 37 anti-privatization lawmakers from his party and recast it as a force for reform to uproot lawmakers siphoning money from the postal system for pork-barrel projects.

The strategy worked, reaping Koizumi an overwhelming victory in elections Sept. 11. His ruling coalition captured 327 of the 480 seats in the lower house, a supermajority able to override any opposition in the upper house, allowing him to resubmit the postal bills.

The legislation that passed Friday is essentially unchanged from the summer except for a six-month delay in beginning the privatization process, to October 2007 from April of the same year.

As soon as the chairman of the upper house, Chikage Ogi, announced that the bill had passed, Economics Minister Heizo Takenaka bowed deeply to the chamber.

"This is the start of a new day for Japanese society," Takenaka said later.

Japan Post maintains about 24,700 offices across the archipelago, and its 340,000 employees deliver mail, offer insurance and collect savings deposits.

Opponents of postal privatization fear that services will decline as expected layoffs occur. They say mail carriers in rural areas will stop the visits to homebound and elderly residents that have made their institution widely beloved.

Already, the postal service has introduced competition among employees aimed at rewarding those who sell services over those who take time to chat with the aged and disabled. Under a new system, postal employees will be rated among three levels, indicated by stars on a chest badge. Those deemed to have the highest quality of service and competitiveness will have the greatest number of stars.

"This system is for employees to explain and suggest products and conduct better service. There is no category saying that when customers have a problem, listen to them," said Yositaka Yano, a Japan Post customer satisfaction representative.

Efficient private-delivery services, which abound in Japan, aren't happy about the pending privatization, saying that even a privatized postal service will maintain advantages.

"They will still dominate in letters and personal correspondence," said Masahiro Oba, spokesman for Yamato Transport Co. Ltd., which contracts with 300,000 convenience stores to collect and deliver parcels.

Koizumi is unlikely to see privatization fully carried out. He's pledged to follow ruling party regulations and step down as party leader in September 2006, meaning he'd leave office. Party elders could change the regulations, but Koizumi has said repeatedly that he plans to leave office next year.

Attention is turning to a Cabinet reshuffle expected next month, since Koizumi has made it clear that he intends to give potential successors high-profile portfolios.

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(Doi is a special correspondent.)

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

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