Japan Post whatchamacallit once again called “privatization”
Speaking of problems in Japan that need addressing: Japan Post (you know, that agency that sells commemorative stamps, delivers mail and packages, and just happens to control a REALLY HUGE AMOUNT of the household savings of the second-largest economy in the world?) is still in the crosshairs of Prime Minister Koizumi’s privatization gun:
The prime minister explicitly said he would stick to the basic privatization policy adopted by the Cabinet in September. One of the key planks of the policy is the creation of four entities–mail and parcel delivery, insurance service, savings service and an over-the-counter services network–under a holding company.
“The Fiscal Investment and Loan Program must be reformed because it’s the connection between the entrance of funds, postal savings and kampo postal insurance, and the exit of funds to public corporations. The flow of funds should be shifted from public to private,” Koizumi said. [You know the patronage and revolving-door systems that your econ professors said drive Japan? You’re looking at the monetary engine right in this paragraph. All that’s missing is explicit mention of the federal ministries involved.–SRK]
“The privatization is an indispensable administrative and fiscal reform to realize a smaller government,” Koizumi added.
Regarding opposition to privatization within the Liberal Democratic Party, the prime minister said: “They say the number of public servants should be decreased, but they oppose the privatization. That’s like instructing someone to swim but tying his arms and legs.
For all the bravado of that soundbite, there are critics who say the privatization plan in fact doesn’t go far enough. In my favorite (in a bad way) analogy, it could create the sort of California-electricity fiasco in which bureaucrats still get to make all the rules while the new private owners get all the accountability. In committee, the proposal predictably got bogged down in the usual attempts to shut up everyone with a complaint. But that was December; this Yomiuri piece says, “The prime minister explicitly said he would stick to the basic privatization policy adopted by the Cabinet in September,” which means not the further ground-down version from the very end of last year.
For those who are interested, the Yomiuri article leads with Japan Post privatization but gives a rundown of the issues the Diet hit in its first 2005 session.
Here you also have the reason for Japanese people’s huge savings rates relative to the US. The kampo accounts pay little to no interest. If your money earns no interest, you’ve got to save a huge amount. The other contributing factor is that few Japanese ever own property. Americans by and large own their own houses by retirement, and that is part of their savings, which is not reflected in bank savings comparisons.
Japanese stock market practices also squeeze out the little guy. For the most part, you have to buy stock in 100 to 1000 share transactions, reducing people’s ability to diversify, or indeed purchase stock at all.
Speaking of stock, apropos of one of your previous posts, did you know that, by law, the Ministry of Finance owns 67% of Japan Tobacco?
I didn’t know the 2/3 figure for tobacco, but the mortgage and property-buying problems are the sort of topic here that generates heated discussion the way sex education does at home. Atsushi recently went to the bank to get the mortgage shortened (to two decades!), since we can afford higher monthly payments, and he was stonewalled. (He got results eventually, but it took a full business day.) We have friends who were about to close on an apartment whose families wept and begged them to reconsider because the market was so bad. We’ll be paid off by retirement, but only because my Atsushi is a planner.
Savings accounts? If it weren’t for the convenience of having Tokyo-Mitsubishi ATM’s all over, I’d probably keep my savings in the proverbial shoebox under the bed. Calling what accrues “interest” is idealistic tact of the most delicate.
As far as stock goes, the individuals I know who buy it do so mostly as recreation. It’s nigh unto inconceivable to expect to make any money off it as in the States. Fixing all that needs fixing on that score is going to take quite a bit of effort.
I figure that, no, Koizumi isn’t entirely the maverick everyone thought he was when he was first campaigning, but it counts for something that he hasn’t morphed into a total stay-in-power-at-any-cost operator, as he could have at any time. He’s trying to get the machine moving in a particular direction, and to the extent that it works, more power to him.
But the demographic implosion means that your property value is not likely to increase with time as mine will here in the US, in fact the reverse is quite likely. That fact keeps a lot of Japanese out of the real estate market, and, perversely, keeps rents at ridiculous rates.
Why don’t you use Citibank? They actually do give you a little interest, and their ATMs, while not as ubiquitous as Sumitomo-Mitsui (or whatever the old Sakura morphed into) and Tokyo-Mitsubishi, are open 24 hours a day and on weekends. Have the Japanese banks started keeping their ATMs open after hours?
Don’t make the mistake of thinking that Citibank Japan is a member of Citibank’s Rest-of-the-World operations though. You can’t move money between accounts the way you can between a Citibank Germany and Citibank US account, for example, and Citibank Japan bank cards are only good in Japan.
Oh, my, we have no illusions of rising property value. Japan has stiff penalties for drugs, remember? We’re just not the sort who like debt. There are enough people being pursued by sarakin as it is.
And I do, in fact, have a Citibank account, and I keep more of my cash there than at BTM. What you say of Citibank is only partially true, though–the ATM cards work in every country I’ve been to. I believe, however, that transactions are processed by Plus System (or Cirrus, maybe), so you pay fees you wouldn’t have if your card were recognized as a Citibank card. You also can move your money if you have an account in the States, though it’s (naturally) a pain. BTM works as you describe, though. Try going to the New York branch and trying to get to your money here in Japan, and watch the stares of incomprehension.
By the way, if you still have a Citibank account here, did you get a load of all those letters we got when JDIC forced them to close their private banking service? Too funny. Not for the people who’d gotten shafted, of course, but as apologies and reassurances that our money was safe.
Then they’ve upgraded, or I got an incompetent in NY.
Asia by Blog
Asia by Blog is a twice weekly feature, usually posted on Monday and Thursday, providing links to Asian blogs and their views on the news in this fascinating region. Previous editions can be found here. The round-up has four key areas of focus: China, …
Asia by Blog
Asia by Blog is a twice weekly feature, usually posted on Monday and Thursday, providing links to Asian blogs and their views on the news in this fascinating region. Previous editions can be found here. The round-up has four key areas of focus: China, …