Gavan McCormack: What Koizumi's Post Office Reform Is All About
[Gavan McCormack is professor in the Research School of Pacific and Asian Studies at Australian National University and visiting professor at International Christian University in Tokyo. He is a coordinator of Japan Focus.]
... The election was called because Koizumi insisted the Post Office must be privatized. Yet nobody in Japan suggested that the service offered by the Post Office was unsatisfactory and Koizumi offered little explanation other than the mantra: “kan kara min e” (from public to private).
The Japanese Post Office is a unique institution, handling not only the management of 25,000 post offices and the nation-wide postal delivery system but also a savings and life insurance system. In that latter capacity it now sits atop the world’s largest pool of funds, a total of around 350 trillion yen (over $3 trillion), made up of 230 trillion in postal savings and 120 trillion in insurance funds (thirty per cent of the Japanese life insurance market). In scale that is roughly two and a half times Citigroup or 20 times Germany’s Postbank (the banking subsidiary of Deutsche Post) [8]. In many remote communities the post office is the central social institution. People entrust their savings to it in preference to private banking institutions despite the low interest (less than one per cent) because of its security, its low fees, and the sense that it constitutes a national fund that is used for national development projects. Koizumi’s plan called for the existing post office entities to be split into four corporations, with full privatization to take place over a ten year period to 2017, and even then government would still hold over one third of the total value of stocks through a holding company.
The Post Office, through its savings and insurance wings in particular, became a central part of the system perfected in the 1970s by Tanaka Kakuei, known sometimes as the “construction state” or doken kokka [9]. The bureaucrats of the Finance Ministry channeled the population’s savings and insurance funds into a wide range of semi-public bodies – constructing highways, airports, bridges, and dams under the over-arching national plan. Wealth was redistributed, both between regions and between social strata. Under Tanaka and his successors, “the doken kokka spread a web of power and corruption throughout the country, substituting interest representation – brokering – for politics in the strict sense, legitimated by its short-term benefits and by the engine for growth that it seemed to provide. [10]” The LDP political machine gained widespread public acceptance, despite the problems, because it functioned to redistribute wealth to the regions and provided a welfare system that was under funded by European standards but still offered a measure of social safety net.
The Post Office thus became a core component of the Japanese bureaucratic developmentalist state, serving “development” by ensuring the flow of investment funds for designated development projects on the one hand, and serving the LDP, especially the Tanaka faction, by vote gathering and influence-peddling on the other. The system provided lucrative amakudari (post-bureaucratic retirement) positions in the semi-public development corporations for faction-favored cronies who moved from managing the flow of funds to enjoying the benefits of the flow. It was a variant of Keynesianism, inclusive and effective, and under it Japan enjoyed its hey day of lifetime employment, universal education and health provision, corporate welfare, and the company loyalty system. Most people felt they were middle class in those years. The system was predicated on growth, however, and, because it was constantly manipulated to serve private advantage as well as public purpose, was intrinsically corrupt. In the 1990s, growth slowed and eventually ground to a halt, prodigious national debt accumulated, and scandals proliferated.
For all its flaws, it was, as one critic put it, a “pastoral capitalism,” in which effort, discipline, skill and care, were rewarded and a sense of social solidarity nurtured, by contrast with Anglo-Saxon “wild capitalism,” in which reward and effort were de-linked and the speculative spirit dominated [11]. As it slowly was discredited, however, its enemies within the LDP became more confident. When Koizumi became party leader and Prime Minister in 2001, he chose to take up the cudgels on the Post Office issue, and thereby to try to right what he saw as the wrong done in 1972, when his original mentor in politics, Fukuda Takeo, a former finance ministry bureaucrat, was defeated in a turf war with Tanaka Kakuei that was dubbed the “Kaku-Fuku War”. 2005 was his year of revenge on the adherents of the Tanaka system.
The outcome, bruited as a triumph for anti-bureaucratic politics, was rather a triumph of the high-priests of bureaucratic governance in the Ministry of Finance, the one Ministry not challenged by Koizumi’s reformist broom, yet the one at the heart of the amakudari and influence-peddling system [12]. Koizumi’s September victory signaled the regaining of control over the levers of power by his Finance Ministry mentors and the driving out of the party as heretics of proponents of the distributive, egalitarian principles of the Kakuei state. In an unguarded moment, Koizumi even admitted that he had not read through the post office bill that was supposedly indispensable to national salvation.
If Koizumi and the LDP wagered everything on postal reform, remarkably the election passed without discussion, not so speak of serious scrutiny, of the implications of the plan for future delivery of services, especially in remote areas, the prospect of higher charges and increased risks, or the likely consequences of opening the national savings to global market forces. Most likely few especially cared whether their mail was delivered by public servants or private companies, but the security of their savings and insurance was another matter. Koizumi was careful not to raise the matter during the campaign, and opposition leaders and media failed to make it an issue. The claim that privatization would invigorate the Japanese economy also seemed improbable since private banks currently have more funds than lending outlets, demand is weak and major corporations are well cashed-up. Why would fully privatized institutions choose to put their funds in zero to low-interest government bonds (of which they now hold around 105 trillion worth)? And yet, if they stopped doing so, the bonds might either collapse in price or their interest rate rise precipitately, with grave consequences. The precedent of the privatization of the Japan National Railways, carried out in 1987 and involving the freezing and then slow expansion of the former national body’s enormous debt even as all the assets were sold off, was scarcely mentioned in the privatization push.
The Kingdom
Outside the Koizumi theatre, in the streets where the neo-liberal script has to be lived, all is far from well. During his time at the helm of the nation, the economy contracted [13], national debt spiraled [14], and working people’s wages fell steadily [15]. While Koizumi talked incessantly of small government, shifting public sector tasks to the private sector, and deregulating, he poured vast sums of public monies in to shore up private banking institutions and continued public works projects for the construction of largely superfluous new express rail lines, dams, airports, and highways (with five trillion yen plus on a new Tokyo-Nagoya expressway alone).
The “restructuring” that he enthusiastically promoted meant the loss of jobs for many, the further gutting of the already enfeebled “traditional” Japanese employment system, reduction of salaries, increases in social security payments and reductions in benefits for many. Anxiety became widespread, and fears over the possible collapse of the national pension system spread. Young women were turning away from marriage and the society itself was signally failing to reproduce. Over one million households subsist on welfare, and two or three times that number are without resources or reserves and should be on it [16]. Lifetime employment virtually disappeared. The manufacturing sector shed four million jobs in the decade to 2004 [17], many of which were not replaced, being either permanently shifted offshore (mainly to China) or transformed into quasi-jobs, to be “outsourced,” done by temporaries, freeter, (casual labor hired from labor supply companies), or robots. Freeters doubled in the decade to 2004, now over 4 million [18], and are expected to grow to 10 million by 2014, with a growing middle-aged component (aged 35 and more) constituting one in five of them [19]. They are a ”reserve army” of labor, able to be moved about, exploited, and cut loose and sacked when it suits employers, who are not required to make any provision for their health or welfare [20]. They earn about half the salary of regular workers, or over a lifetime about a quarter; they are the new poor. Another group, 2.13 million aged between 15 and 34, are not in school or employment and therefore described as NEET (not in employment, education, or training) [21]. For those who still, for the moment, retain jobs, stress and anxiety levels rise, since for the most part they have reduced job security, reduced income, and increased anxiety over future pension entitlements and tax burdens [22]. The official figure for unemployment (3.13 million) remains relatively low, but only because shame or helplessness deter many from registering for it. Full-time, regular male labor is replaced by part-time, cheap and insecure female labor, and those in under- or quasi-employment grow steadily [23]. Robots proliferate. By 2007, Canon will have one quarter of its domestic production coming from robots that work 24/7, and do not complain or get tired, sleepy, or sick [24].
From 1997, the suicide rate leapt from around 22,000 per year to over 30,000 where it has stayed ever since. In 2004 it was over 32,000 (90 per day), roughly double the US rate, and with the increase coming especially among middle-aged and elderly males, for economic reasons [25]. Furthermore, for each “successful” suicide, there are said to be five times as many “failed” attempts [26]. To spend time in Japan in recent years is to hear all too often the chilling announcement on the train or subway about a delay due to a "jinshin jiko" or “accident involving a human body.” The Japan that in the 1970s and 1980s was known for its astonishing degree of worker commitment and identification to the corporation, the land of the corporate warrior, is now the OECD country with the lowest levels of corporate loyalty [27], and one of the highest levels of income inequality [28].
What voters were most concerned about was not the Post Office but pensions and welfare (52 per cent), economy and employment (28 per cent), foreign affairs and defense (9 per cent), with just 2 per cent for postal privatization [29]. Shortly before the election was called, on 6 July, the Yomiuri reported that postal privatization was ranked No. 16 of 17 priorities, 7 per cent, still way below pensions and welfare. Only as the parliamentary crisis built towards the election, however, and Koizumi stepped up his campaign, was a small majority in favor of privatization detected [30]. His popularity surged in response to his bold decision to threaten a national election if his bill were defeated.
Japan’s welfare budget is among the lowest in OECD (14.7 per cent, compared to 14.6 per cent for the US and an OECD average of 24.2 per cent) [31], but the mass retirement of the baby boomer generation expected around 2007, in the context of rapid aging and a declining birthrate means that expenditure will rise vertiginously. With a median age in 2004 of 42.6 and, with over-65s at 19.5 per cent, Japan is leading the OECD into the unfamiliar territory of a “super aged” society [32]. The 2004 welfare budget, at 32 trillion yen already equal to 76 per cent of national tax revenues (42 trillion), is expected to more than double by 2025 [33]. In due course, public services and social protections have to be degraded “in order to oblige the mass of citizens to buy social protection from private finance and insurance houses. [34]” Less than a year before his triumph, individual politicians, including core members of Koizumi’s LDP, were shown to have cynically evaded payments into the compulsory national pension scheme. It was no mean political feat, therefore, for Koizumi to manage to have this crisis dropped from public attention, especially after his cavalier response to a Diet question about his own pension premiums being paid for him (around 1970, before his election to the Diet) by a mysterious political patron for whom he did no work. He replied in the immortal words: “There are all sorts of people, all sorts of companies, and all sorts of employees. [35]”
Books analyzing the transformation of Japanese society in terms of the disappearance of` the 100 million-strong middle class and of the widening split between the super rich and the marginal masses (winners and losers, kachigumi and makegumi) became best sellers. The political events of 2005 were rooted in this deep social malaise.
The Empire
Beyond the kingdom, however, lay the empire. Postal privatization had been pressed upon Japan by the US for decades, and it has long been high on the Washington wish list of Japanese policy changes. Following the Plaza Agreement of 1985, when despite massive yen revaluation the US trade deficit with Japan continued to grow, Japan was assumed to be deriving “unfair” advantage from the “difference” or closedness of its social and economic system. Negotiations to level the bilateral playing field began in 1989 under the name “Structural Impediment Initiative” (SII). To soften the implication of peremptory US intervention in Japan’s internal arrangements conveyed by the term, the Japanese Foreign Ministry deleted the word “impediment” and simply translated it as “structural negotiations” (kozo kyogi). At the second meeting, the US side presented a list of over 200 demands for reform – covering everything from budget, tax system, and joint stockholding rules, to the request that Japanese stop working on Saturdays. It was described by one senior Japanese official as tantamount to a “second occupation. [36]”
Negotiations in similar vein, to remove “impediments” to the US share of the Japanese market resumed under various names thereafter. In the round that was conducted under Clinton and Miyazawa in 1993, Koizumi, as post and telecommunications minister, was actively involved. His personal stake in attacking party and factional enemies coincided with the US government’s view that Japan’s Post Office, like its bureaucratically-regulated banking and insurance system, was a trade barrier, an “impediment,” to be dismantled. When he became Prime Minister, he agreed with George W. Bush to reopen negotiations from June 2001 under the title “U.S.-Japan Regulatory Reform and Competition Policy Initiative” Their scope was breathtaking – including “telecommunications, information technology, energy, medical devices and pharmaceuticals, financial services, competition policy, transparency, legal reform, commercial law revision, and distribution,” in short pretty well everything [37]. Koizumi’s popularity in Washington reflected the appreciation for the enthusiasm with which he embraced his mission of transforming Japan to meet American standards.
Koizumi’s postal reform bill was discussed on many occasions between the two governments. The office of the USTR (US Trade Representative) insisted that privatization be implemented “based on market principles only,” and that the Japanese government withdraw completely from postal savings and life insurance [38]. Koizumi’s policy was acclaimed as “an important step” in that direction. An October 2004 letter from US Trade Representative Robert Zoellick (who was shortly to become Deputy Secretary of State) to Japan’s Finance Minister Takenaka declaring US enthusiasm and readiness to help pursue postal privatization was tabled in the Diet on 2 August [39]. It included a handwritten note from Zoellick commending Takenaka for the splendid job he was doing and offering assistance if required. Challenged to explain this apparent US government intervention in a sensitive and contentious Japanese matter, Prime Minister Koizumi merely expressed his satisfaction that Takenaka had been befriended by such an important figure. When President George W Bush raised the question with Koizumi himself in New York in September 2004, Koizumi is said to have replied: “I will do my best” (shikkari yatte ikitai). It was tantamount to an absolute commitment, and the president duly expressed his satisfaction [40].
Koizumi’s government had already contributed enormously towards stabilizing the US economy by its purchases of US treasury bonds and notes, and postal privatization would be a further, large step in sustaining Washington’s Iraq mission and related imperial policies. It was a prospect for the Bush administration to relish.
US private investment institutions, for their part, were also excited over the prospect of access to the Japanese pool of savings. According to the Wall Street Journal (August 26) Citigroup expected US treasuries, European bonds and Japanese and foreign stocks to be “the big winners. [41]” Currently, while about 50 per cent of the population in the US own and 36 per cent trade stocks, the figure in Japan is around 10 per cent owning and 3 per cent trading them. “It’s ... a big space for us to grow into," as one broker put it....
Read entire article at Japan Focus
... The election was called because Koizumi insisted the Post Office must be privatized. Yet nobody in Japan suggested that the service offered by the Post Office was unsatisfactory and Koizumi offered little explanation other than the mantra: “kan kara min e” (from public to private).
The Japanese Post Office is a unique institution, handling not only the management of 25,000 post offices and the nation-wide postal delivery system but also a savings and life insurance system. In that latter capacity it now sits atop the world’s largest pool of funds, a total of around 350 trillion yen (over $3 trillion), made up of 230 trillion in postal savings and 120 trillion in insurance funds (thirty per cent of the Japanese life insurance market). In scale that is roughly two and a half times Citigroup or 20 times Germany’s Postbank (the banking subsidiary of Deutsche Post) [8]. In many remote communities the post office is the central social institution. People entrust their savings to it in preference to private banking institutions despite the low interest (less than one per cent) because of its security, its low fees, and the sense that it constitutes a national fund that is used for national development projects. Koizumi’s plan called for the existing post office entities to be split into four corporations, with full privatization to take place over a ten year period to 2017, and even then government would still hold over one third of the total value of stocks through a holding company.
The Post Office, through its savings and insurance wings in particular, became a central part of the system perfected in the 1970s by Tanaka Kakuei, known sometimes as the “construction state” or doken kokka [9]. The bureaucrats of the Finance Ministry channeled the population’s savings and insurance funds into a wide range of semi-public bodies – constructing highways, airports, bridges, and dams under the over-arching national plan. Wealth was redistributed, both between regions and between social strata. Under Tanaka and his successors, “the doken kokka spread a web of power and corruption throughout the country, substituting interest representation – brokering – for politics in the strict sense, legitimated by its short-term benefits and by the engine for growth that it seemed to provide. [10]” The LDP political machine gained widespread public acceptance, despite the problems, because it functioned to redistribute wealth to the regions and provided a welfare system that was under funded by European standards but still offered a measure of social safety net.
The Post Office thus became a core component of the Japanese bureaucratic developmentalist state, serving “development” by ensuring the flow of investment funds for designated development projects on the one hand, and serving the LDP, especially the Tanaka faction, by vote gathering and influence-peddling on the other. The system provided lucrative amakudari (post-bureaucratic retirement) positions in the semi-public development corporations for faction-favored cronies who moved from managing the flow of funds to enjoying the benefits of the flow. It was a variant of Keynesianism, inclusive and effective, and under it Japan enjoyed its hey day of lifetime employment, universal education and health provision, corporate welfare, and the company loyalty system. Most people felt they were middle class in those years. The system was predicated on growth, however, and, because it was constantly manipulated to serve private advantage as well as public purpose, was intrinsically corrupt. In the 1990s, growth slowed and eventually ground to a halt, prodigious national debt accumulated, and scandals proliferated.
For all its flaws, it was, as one critic put it, a “pastoral capitalism,” in which effort, discipline, skill and care, were rewarded and a sense of social solidarity nurtured, by contrast with Anglo-Saxon “wild capitalism,” in which reward and effort were de-linked and the speculative spirit dominated [11]. As it slowly was discredited, however, its enemies within the LDP became more confident. When Koizumi became party leader and Prime Minister in 2001, he chose to take up the cudgels on the Post Office issue, and thereby to try to right what he saw as the wrong done in 1972, when his original mentor in politics, Fukuda Takeo, a former finance ministry bureaucrat, was defeated in a turf war with Tanaka Kakuei that was dubbed the “Kaku-Fuku War”. 2005 was his year of revenge on the adherents of the Tanaka system.
The outcome, bruited as a triumph for anti-bureaucratic politics, was rather a triumph of the high-priests of bureaucratic governance in the Ministry of Finance, the one Ministry not challenged by Koizumi’s reformist broom, yet the one at the heart of the amakudari and influence-peddling system [12]. Koizumi’s September victory signaled the regaining of control over the levers of power by his Finance Ministry mentors and the driving out of the party as heretics of proponents of the distributive, egalitarian principles of the Kakuei state. In an unguarded moment, Koizumi even admitted that he had not read through the post office bill that was supposedly indispensable to national salvation.
If Koizumi and the LDP wagered everything on postal reform, remarkably the election passed without discussion, not so speak of serious scrutiny, of the implications of the plan for future delivery of services, especially in remote areas, the prospect of higher charges and increased risks, or the likely consequences of opening the national savings to global market forces. Most likely few especially cared whether their mail was delivered by public servants or private companies, but the security of their savings and insurance was another matter. Koizumi was careful not to raise the matter during the campaign, and opposition leaders and media failed to make it an issue. The claim that privatization would invigorate the Japanese economy also seemed improbable since private banks currently have more funds than lending outlets, demand is weak and major corporations are well cashed-up. Why would fully privatized institutions choose to put their funds in zero to low-interest government bonds (of which they now hold around 105 trillion worth)? And yet, if they stopped doing so, the bonds might either collapse in price or their interest rate rise precipitately, with grave consequences. The precedent of the privatization of the Japan National Railways, carried out in 1987 and involving the freezing and then slow expansion of the former national body’s enormous debt even as all the assets were sold off, was scarcely mentioned in the privatization push.
The Kingdom
Outside the Koizumi theatre, in the streets where the neo-liberal script has to be lived, all is far from well. During his time at the helm of the nation, the economy contracted [13], national debt spiraled [14], and working people’s wages fell steadily [15]. While Koizumi talked incessantly of small government, shifting public sector tasks to the private sector, and deregulating, he poured vast sums of public monies in to shore up private banking institutions and continued public works projects for the construction of largely superfluous new express rail lines, dams, airports, and highways (with five trillion yen plus on a new Tokyo-Nagoya expressway alone).
The “restructuring” that he enthusiastically promoted meant the loss of jobs for many, the further gutting of the already enfeebled “traditional” Japanese employment system, reduction of salaries, increases in social security payments and reductions in benefits for many. Anxiety became widespread, and fears over the possible collapse of the national pension system spread. Young women were turning away from marriage and the society itself was signally failing to reproduce. Over one million households subsist on welfare, and two or three times that number are without resources or reserves and should be on it [16]. Lifetime employment virtually disappeared. The manufacturing sector shed four million jobs in the decade to 2004 [17], many of which were not replaced, being either permanently shifted offshore (mainly to China) or transformed into quasi-jobs, to be “outsourced,” done by temporaries, freeter, (casual labor hired from labor supply companies), or robots. Freeters doubled in the decade to 2004, now over 4 million [18], and are expected to grow to 10 million by 2014, with a growing middle-aged component (aged 35 and more) constituting one in five of them [19]. They are a ”reserve army” of labor, able to be moved about, exploited, and cut loose and sacked when it suits employers, who are not required to make any provision for their health or welfare [20]. They earn about half the salary of regular workers, or over a lifetime about a quarter; they are the new poor. Another group, 2.13 million aged between 15 and 34, are not in school or employment and therefore described as NEET (not in employment, education, or training) [21]. For those who still, for the moment, retain jobs, stress and anxiety levels rise, since for the most part they have reduced job security, reduced income, and increased anxiety over future pension entitlements and tax burdens [22]. The official figure for unemployment (3.13 million) remains relatively low, but only because shame or helplessness deter many from registering for it. Full-time, regular male labor is replaced by part-time, cheap and insecure female labor, and those in under- or quasi-employment grow steadily [23]. Robots proliferate. By 2007, Canon will have one quarter of its domestic production coming from robots that work 24/7, and do not complain or get tired, sleepy, or sick [24].
From 1997, the suicide rate leapt from around 22,000 per year to over 30,000 where it has stayed ever since. In 2004 it was over 32,000 (90 per day), roughly double the US rate, and with the increase coming especially among middle-aged and elderly males, for economic reasons [25]. Furthermore, for each “successful” suicide, there are said to be five times as many “failed” attempts [26]. To spend time in Japan in recent years is to hear all too often the chilling announcement on the train or subway about a delay due to a "jinshin jiko" or “accident involving a human body.” The Japan that in the 1970s and 1980s was known for its astonishing degree of worker commitment and identification to the corporation, the land of the corporate warrior, is now the OECD country with the lowest levels of corporate loyalty [27], and one of the highest levels of income inequality [28].
What voters were most concerned about was not the Post Office but pensions and welfare (52 per cent), economy and employment (28 per cent), foreign affairs and defense (9 per cent), with just 2 per cent for postal privatization [29]. Shortly before the election was called, on 6 July, the Yomiuri reported that postal privatization was ranked No. 16 of 17 priorities, 7 per cent, still way below pensions and welfare. Only as the parliamentary crisis built towards the election, however, and Koizumi stepped up his campaign, was a small majority in favor of privatization detected [30]. His popularity surged in response to his bold decision to threaten a national election if his bill were defeated.
Japan’s welfare budget is among the lowest in OECD (14.7 per cent, compared to 14.6 per cent for the US and an OECD average of 24.2 per cent) [31], but the mass retirement of the baby boomer generation expected around 2007, in the context of rapid aging and a declining birthrate means that expenditure will rise vertiginously. With a median age in 2004 of 42.6 and, with over-65s at 19.5 per cent, Japan is leading the OECD into the unfamiliar territory of a “super aged” society [32]. The 2004 welfare budget, at 32 trillion yen already equal to 76 per cent of national tax revenues (42 trillion), is expected to more than double by 2025 [33]. In due course, public services and social protections have to be degraded “in order to oblige the mass of citizens to buy social protection from private finance and insurance houses. [34]” Less than a year before his triumph, individual politicians, including core members of Koizumi’s LDP, were shown to have cynically evaded payments into the compulsory national pension scheme. It was no mean political feat, therefore, for Koizumi to manage to have this crisis dropped from public attention, especially after his cavalier response to a Diet question about his own pension premiums being paid for him (around 1970, before his election to the Diet) by a mysterious political patron for whom he did no work. He replied in the immortal words: “There are all sorts of people, all sorts of companies, and all sorts of employees. [35]”
Books analyzing the transformation of Japanese society in terms of the disappearance of` the 100 million-strong middle class and of the widening split between the super rich and the marginal masses (winners and losers, kachigumi and makegumi) became best sellers. The political events of 2005 were rooted in this deep social malaise.
The Empire
Beyond the kingdom, however, lay the empire. Postal privatization had been pressed upon Japan by the US for decades, and it has long been high on the Washington wish list of Japanese policy changes. Following the Plaza Agreement of 1985, when despite massive yen revaluation the US trade deficit with Japan continued to grow, Japan was assumed to be deriving “unfair” advantage from the “difference” or closedness of its social and economic system. Negotiations to level the bilateral playing field began in 1989 under the name “Structural Impediment Initiative” (SII). To soften the implication of peremptory US intervention in Japan’s internal arrangements conveyed by the term, the Japanese Foreign Ministry deleted the word “impediment” and simply translated it as “structural negotiations” (kozo kyogi). At the second meeting, the US side presented a list of over 200 demands for reform – covering everything from budget, tax system, and joint stockholding rules, to the request that Japanese stop working on Saturdays. It was described by one senior Japanese official as tantamount to a “second occupation. [36]”
Negotiations in similar vein, to remove “impediments” to the US share of the Japanese market resumed under various names thereafter. In the round that was conducted under Clinton and Miyazawa in 1993, Koizumi, as post and telecommunications minister, was actively involved. His personal stake in attacking party and factional enemies coincided with the US government’s view that Japan’s Post Office, like its bureaucratically-regulated banking and insurance system, was a trade barrier, an “impediment,” to be dismantled. When he became Prime Minister, he agreed with George W. Bush to reopen negotiations from June 2001 under the title “U.S.-Japan Regulatory Reform and Competition Policy Initiative” Their scope was breathtaking – including “telecommunications, information technology, energy, medical devices and pharmaceuticals, financial services, competition policy, transparency, legal reform, commercial law revision, and distribution,” in short pretty well everything [37]. Koizumi’s popularity in Washington reflected the appreciation for the enthusiasm with which he embraced his mission of transforming Japan to meet American standards.
Koizumi’s postal reform bill was discussed on many occasions between the two governments. The office of the USTR (US Trade Representative) insisted that privatization be implemented “based on market principles only,” and that the Japanese government withdraw completely from postal savings and life insurance [38]. Koizumi’s policy was acclaimed as “an important step” in that direction. An October 2004 letter from US Trade Representative Robert Zoellick (who was shortly to become Deputy Secretary of State) to Japan’s Finance Minister Takenaka declaring US enthusiasm and readiness to help pursue postal privatization was tabled in the Diet on 2 August [39]. It included a handwritten note from Zoellick commending Takenaka for the splendid job he was doing and offering assistance if required. Challenged to explain this apparent US government intervention in a sensitive and contentious Japanese matter, Prime Minister Koizumi merely expressed his satisfaction that Takenaka had been befriended by such an important figure. When President George W Bush raised the question with Koizumi himself in New York in September 2004, Koizumi is said to have replied: “I will do my best” (shikkari yatte ikitai). It was tantamount to an absolute commitment, and the president duly expressed his satisfaction [40].
Koizumi’s government had already contributed enormously towards stabilizing the US economy by its purchases of US treasury bonds and notes, and postal privatization would be a further, large step in sustaining Washington’s Iraq mission and related imperial policies. It was a prospect for the Bush administration to relish.
US private investment institutions, for their part, were also excited over the prospect of access to the Japanese pool of savings. According to the Wall Street Journal (August 26) Citigroup expected US treasuries, European bonds and Japanese and foreign stocks to be “the big winners. [41]” Currently, while about 50 per cent of the population in the US own and 36 per cent trade stocks, the figure in Japan is around 10 per cent owning and 3 per cent trading them. “It’s ... a big space for us to grow into," as one broker put it....