Japan's cabinet has approved a plan to abolish or privatize more than 60 public corporations. The effort is a major accomplishment for Prime Minister Junichiro Koizumi's sweeping structural reform program.
The plan received the final stamp of approval at a cabinet meeting Wednesday. Although it fell short of what Prime Minister Koizumi originally intended to accomplish, he put a positive spin on it when he spoke with reporters.
"We have come far, haven't we? We were able to take a big step forward," Mr. Koizumi said. "The cooperation of the opposition forces has been significant."
He added that his restructuring agenda didn't face as much resistance as he had anticipated.
Key components of the plan include privatizing highway corporations and airports, as well as a dozen other entities and dismantling the government housing loan corporation.
The goal of all this is to significantly reduce Japan's crushing debt and move the country out of recession. Japan spends more than $40 billion a year to support public corporations - many of which have been criticized as moribund and inefficient.
The managing director of J.P. Morgan Japan, Masaaki Kanno, says what the prime minister has accomplished so far is only part of the solution.
"To the extent that the government can save money, which was given to those public enterprises and the subsidies, the government can reduce the deficit," he said. "But the core of this problem is not the financial issue. This is more structural. In different words, this is a problem of efficiency of the whole Japanese structure."
The cabinet has postponed making a decision on the fate of eight state-backed financial institutions, including Japan's main foreign aid agency. The prime minister says he wants a plan in place early next year.