Accessibility links

Japanese Politicians Debate Economic Ramifications of Postal Privatization Scheme


The political battle over the proposed privatization of Japan's postal system continues as the country heads into an election. One of Japan's most recognizable names in cosmetics, along with three of its former top executives, faces fraud charges. And Japan's trade ministry says it will devise a plan next month to crack down on Internet auction scams.

The contentious issue of the privatization of Japan's postal system is continuing to buffet the country's political landscape, with the governing coalition and opposition Democratic Party divided over its potential economic ramifications.

Ahead of the September 11 national elections, the Democrats are proposing changes that would have more of the system's massive store of funds flow into the private sector, but Postal Reform Minister Heizo Takenaka has criticized the Democrats' plan, saying it would mean the loss of 80,000 jobs.

Japan Post employs some 260,000 workers and is a repository of about $3 trillion in personal savings and life insurance accounts.

The issue has prompted four powerful members of the ruling Liberal Democratic Party to form a new party to oppose Prime Minister Junichiro Koizumi. But Mr. Koizumi, the leading proponent of postal reform, is standing firm.

Mr. Koizumi says he is glad the four former allies left the LDP and formed a new party because if they oppose his postal privatization project then there is no place for them in his party.

Japan's Securities and Exchange Surveillance Commission has filed a criminal complaint against cosmetics and textile maker Kanebo and three of its former executives. The company's former president, vice president and managing director were arrested last month for allegedly submitting falsified financial statements to the authorities.

Prosecutors say the doctored financial statements showed the company was in the black, when in reality it had a capital deficit in both fiscal 2001 and 2002 of more than $700 million. Kanebo, established in 1887, was removed from the Tokyo Stock Exchange in June.

Japan's Ministry of Economy, Trade and Industry is devising an action plan to crack down on Internet fraud, following a surge of such crimes in the country. Trade Minister Shoichi Nakagawa says online auction operators will be instructed to bolster their security systems. And sellers in Internet auctions will be required to disclose their addresses when offering items for sale.

Struggling Japanese retailer Seiyu is considering opening Wal-Mart superstores in the country. Seiyu, which has 400 stores, is 42 percent owned by the American company Wal-Mart, the world's largest retailer.

Some analysts question the value of the American brand here in Japan, where it is virtually unknown. Investors, however, appear to believe that the Wal-Mart name would be a plus. Shares in Seiyu surged more than 10 percent on Wednesday, after reports emerged that the first Japanese Wal-Mart could open as soon as next year.

XS
SM
MD
LG