> I'm not sure what they're doing with the postal savings banks.
----------------------------------------
Postal privatization is the most pressing objective of Japanese and
international investors and the IMF in relation to the Japanese economy
today - deemed important enough for an election to have been called and
fought over it. The Japanese post office, through its banking and insurance
arms, currently sits on $3 trillion in assets, representing a quarter of
household savings in the country. The government and private sector see the
measure redirecting this immense pool of capital towards corporate bonds and
equities, giving a powerful lift to the slowly-recovering Japanese financial
and manufacturing sectors. The Wall Street brokerages also see themselves
getting a big piece of this action.
Privatization boosters also claim it will reallocate capital more efficiently and end the politically-sponsored propping up of zombie companies - to which they attribute the long slump resulting from the failure of of the economy to cleanse itself through mass bankruptcies. The big financial houses are probably also anticipating it will also provide the wherewithal to establish the individual medical and retirement accounts they favour across all of the advanced capitalist countries. Postal privatization has often been cited in the context of the "demographic" problems posed by Japan's aging population.
For so long as the post office has been publicly-owned, the savings have been controlled by state officials and legislators, and have famously been a source of pork for all of the dams, highways, bridges, and other infrastructure dotting the Japanese countryside. Apart from that, the savings have been mainly used to purchase Japanese government bonds to finance the ballooning deficits.
The well-founded expectation is that when the banking and insurance departments of the post office become private corporations starting in 2007, their managers will chase higher-yielding corporate bonds, equities, and other financial instruments rather than purchase plain vanilla government bonds.
The big losers will be the close to 300,000 postal workers who will experience layoffs and see their standards decline, and residents in the rural areas, who will see branches close and post-office supported infrastructure projects dry up. I had some experience with postal privatization in the early 80's. Canada didn't fully privatize its post office - it only turned it into a crown corporation, and it was not a bank - but the net effect of even that relatively modest move was to bring the postal system more into alignment with business, to dramatically cut back service to the rural areas, and to bring greater pressure on workers' pay and benefits. What is planned in Japan is much more sweeping.
MG