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Koizumi Wins Postal Reform Battle in Japan


Japan's prime minister has scored a huge political victory after three decades of calling for reform of Japan's cash-rich postal system, which has long been a source of wasteful government spending. Friday's passage of postal reform legislation may now allow Prime Minister Junichiro Koizumi to focus on pressing domestic and diplomatic issues that have been pushed to the sidelines.

Japan's upper house of parliament, which rejected the postal privatization bills two months ago triggering national elections, did an about-face on Friday.

Upper House president Chikage Ogi announcing that the package of bills has passed by a vote of 134 to 100.

It was a huge reversal from August. At that time, 22 members of Prime Minister Junichiro Koizumi's own Liberal Democratic Party failed to support the package.

On Friday, there was only one such dissenter among the governing ranks. The others were cowed back into the fold after the September 11 election, which was seen as a resounding public mandate for Mr. Koizumi and his pet project of postal privatization.

Mr. Koizumi on Friday called the legislation the first big step towards reforming Japan's economy.

The prime minister says a miracle in the political world has been realized thanks to those who supported him and pulled him up from the bottom. He says he is grateful to his supporters from the bottom of his heart.

At present, Japan Post runs 25,000 post offices and has some three trillion dollars in assets. The pool of money has served as a giant source of government spending, sometimes resulting in corruption scandals and inflating government debt.

The new law will, starting in 2007, gradually privatize and split Japan Post into a number of companies including a mail delivery service, a savings bank and a life insurance company.

Mr. Koizumi has called for postal privatization through his decades of public service. With his pet project accomplished, he is now expected to have more time for other pressing issues, such as reform of a health care system that has to deal with a rapidly aging society.

The prime minister may also now pay more attention to diplomacy. He has generally been given low marks in that area since taking office in 2001, and while he was distracted by postal reform, relations with Japan's neighbors, especially China and South Korea, have deteriorated significantly.