All right, already. I’m not going to start writing to other people’s specifications, but if the post titles are looking self-consciously cryptic, I’ll knock it off. It’s not as if I were aiming to drive people crazy. : )



I wish I were able to come up with succinct and germane headings the way everyone else is, but…see, I’ve only got, like, three subjects, and I can’t very well start calling things “Japan Post privatization, Part the 1045th,” right? The problem is, whenever I try to squeeze in a little distinguishing information, I end up with something unwieldy: “Koizumi says Japan Post privatization must proceed despite old-guard ninnyism he’s been up against since taking office.” Yes, we learned to write snappy headlines in journalism class in high school. No, the lessons clearly didn’t take. Besides, what I’m doing here isn’t journalism. I also toyed with the idea of using random but faux-profound Japanophile stuff (“A lone crane cries in silhouette against a midnight sky”) to see whether people would get the joke, but there’s no point in getting a joke that’s not very funny, anyway.



So if I feel stuck, I go with whatever comes into my head that I’ll be able to recognize when I’m looking at an MT list later; usually, what comes into my head is some line from a pop song, contrived as they are to stick in the memory.



Oh, yeah, on a different but related issue: I do understand that not everyone reads Japanese. I have a few readers who are studying it, though. When I put a post title in Japanese (always an uninteresting reference to the main topic), it’s usually in the hope that they’ll look up the meaning and reading and then be able to associate it with the post content in their memory. When you’re studying Japanese, every little bit of memory aid helps, trust you me. Anyway, no one has written to say that that‘s getting on his nerves, but if it’s helpful, I can…I don’t know, put the English in a roll-over link, or something. I’m not going out of my way to be obscurantist.



Added in the early hours of 2 February: It seems I can’t even leave the title off a post in a way that makes people happy. (Just kidding, Amritas. Glad you’ve got your energy back.)

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.

Japanese language and culture, as you’ve probably heard many times, are full of nuances as impossible to grasp as the wisps of smoke that curl toward heaven from a bowl of incense in a darkened room. Therefore, it may interest you to know that some concepts translate into and from English with no loss of meaning at all.



Consider, as an example, the reform of government programs undertaken by the Koizumi adminstration and the ruling coalition that supports it. The idea is to deregulate and even privatize certain operations in certain spheres–Japan Post reform has gotten the most attention, but the health-care behemoth is on the list, too:

Ministers attending a Cabinet meeting Tuesday agreed to give the report, presented Friday by the Council for Promotion of Regulatory Reform, an advisory body to Prime Minister Junichiro Koizumi, serious consideration.



In another gesture supporting easing government regulations, one of the prime minister’s key structural reform initiatives, the Cabinet approved a plan to revise in March the three-year deregulation promotion program that has been in force since April.



…



In line with Koizumi’s public pledge to push forward with deregulation as an integral part of his reform agenda, in May the government established the Headquarters for Promotion of Regulatory Reform, made up of all Cabinet members.



One of the top discussions in the regulatory reform council was on the idea of lifting the ban on providing mixed medical services, enabling patients to receive a combination of medical treatment covered by government-backed health insurance plans and medical treatment not so covered.



The mixed medical service system currently is limited to hospitals designated by the government as medical institutions with specially advanced medical technology.

The ban, of course, prevents some patients from having access to the best combination of treatments for whatever ails them. Westerners who have swallowed the entire media diet of stories about the self-abnegating Japanese, and thus think of the place as populated by 125 million potential kamikaze pilots, seem to imagine that everything federal employees do is attuned to the greater good. If you’re one such trusting soul, it may interest you to know that Japanese bureaucrats act like…well, bureaucrats:

Objecting strongly to the council’s argument was the Health, Labor and Welfare Ministry, bureaucrats of which were anxious about a decline in the role of government-backed health insurance plans that come under the ministry’s jurisdiction.



In defending its position, the ministry claimed that a mixed medical service system would deprive patients of the right to equal treatment.



Major university hospitals, including those attached to Tokyo University and Kyoto University, meanwhile, pushed for a complete lifting of the ban, arguing that progress in advanced medical technology was being hindered by too many regulations around the government-backed health insurance plans.



…



This resulted in a compromise being hammered out that ensured the ban remained, in return for a ministry promise to expand the current system to extend government-backed insurance coverage to exceptional cases currently not covered, such as heart transplants from brain-dead donors.

It’s the sort of thing that belongs in a textbook, huh? Unelected officials find their authority (and thus their source of influence) threatened, and they justify their opposition by claiming that what they’re worried about is, of course, that reforms will infringe on the rights of citizens. Being career civil servants, they’re much better at strategy than their opponents, who, as the people who have to deal with the day-to-day problem being addressed, don’t make their livelihoods by maneuvering. Then, somehow, their territory is actually expanded by the plan ultimately extruded by the chain of committees, compromise proposals, and negotiations.



I think it’s fair to say that most of the people who go into civil service here are as patriotic and idealistic as their counterparts. The problem isn’t really that Japanese bureaucrats are worse than bureaucrats elsewhere; it’s that the system disproportionately favors them. They get used to having their way as a matter of course, but they still get to see themselves as sacrificing personal gain because of the revolving-door system (that is, you take lower-than-private-sector pay through your normal working life, then get a cushy job in a private or semi-public company on retirement so you can spend the next 20 years making good on the connections you’ve built up). The recent economic troubles have made that system shakier, and the various bureaucracies have, understandably, therefore been clinging all the more to the power they’ve got. Reform is, needless to say, difficult in such an environment. Even a slight loosening of restrictions on treatments people can get is a good thing, though.

The LDP has drafted its Postal Service reform proposal, and having been developed by a committee, the thing appears to have fallen prey to all-things-to-all-people syndrome:

Having duly recorded the multiplicity of opinions [Gulp!–SRK], ranging from the argument that the current single-agent handling of mails, postal savings, and insurance functions should be maintained to opposition to privatization in its entirety, the committee hammered out a proposal in which post offices will be arranged as they are currently and will be uniformly charged with providing postal savings and insurance services nationwide. Mindful of opposing voices within the party, the committee also decided to forgo the use of the word privatization in the proposal.

Later in the (brief, as yet) report, the Nikkei explains that “the summary of points for debate released by the committee last month was predicated on privatization; however, because opposition within the party was so strong, the committee retreated into the wording ‘postal reform,’ which does not imply that the organization will be split into separate corporations or changed in other specific ways.” So we’re not privatizing the thing, just…rearranging it. Somehow. How, exactly, we’ll tell you later.



The plan to priva…ACK!…reform Japan Post has been dragging out for a while now, and with this latest development, painful but necessary changes to its operations don’t look as if they’re going to be coming any time soon. Good thing much of the household wealth of the country doesn’t hang in the balance, or anything!

The LDP’s coalition partner, the New Komei Party, has released a position paper that gingerly revises its former position on the export of weapons. Its new approach may make it easier to relax restrictions on technology transfers to the US.



*******



Koizumi has been somewhat more assertive in ensuring that other proposals by his administration are realized. Or not–the article veers back and forth a lot. It also gives a good indication of the headache-inducing nature of factional politics in the Diet, which you need several flow charts, an almanac, a sextant, and perhaps a rabbit’s foot to navigate through. Suffice it to say that–duh!–the Koizumi administration is hoping that it’s posted enough higher-ups who support its Japan Post privatization plan that there will be pressure on those who don’t to fall in line.



*******



Finally, two consecutively-posted stories over at the English Yomiuri sum up the state of government spending with (surely unintentional?) dark comedy: Most federal ministries are bankrupt by normal accounting standards, but they are eager to maintain the amount they dole out in subsidies. (Note: The River Bureau is part of the Ministry of Land, Infrastructure, and Transport.)



The proposal to cut subsidies is part of the Koizumi administration’s proposals for “three-pronged reform” (which is usually rendered “trinity reform,” but that kind of weirds me out). The idea is to cut federal subsidies to local governments, to lower the amount of money passing through the allocation tax system (whereby federal tax money makes a U-turn and is sent back in specified amounts to local governments), and to make up for the decreased amount of money flowing from federal to local government by localizing more tax collection. Take a wild guess why federal ministries are lukewarm on that idea.

Asahi has a new poll (here’s the original Japanese version) indicating that voters don’t care about Japan Post reform (which is what I should have called it earlier, rather than “Postal Service reform,” which makes it sound as if only the handling of the mails were involved). That’s interesting, if not all that surprising. It may be that people don’t perceive what’s at stake in the management of Postal Savings accounts–or it may be that they do but just think the “reforms” aren’t going to help and therefore aren’t worth fixating on:

Those polled were also asked whether they thought Koizumi would be able to exercise his leadership in realizing privatization of postal services, given that many influential members in the Liberal Democratic Party remain opposed to Koizumi’s privatization plan.

About 39 percent said no, while about 37 percent said yes.

So people may understand the import of the issue but feel that nothing substantive can be accomplished. The English version leaves out the part specifically about Heizo Takenaka’s new position as head of Japan Post privatization (39% think his appointment was a good idea; 25% do not). Predictably, most people chose pensions/welfare as the most important issues, with more general economic and employment issues next.

One of the big news items here in Japan over the last several months has been the reform and privatization of the Postal Service. I haven’t avoided it for fear of boring you–though it’s not the sort of topic likely to make you a hit at dinner parties. It’s just that there’s been so much back-and-forth. It is, though, a very, very important issue here in Japan, because Postal Savings accounts hold a lot of the wealth of Japanese households and put it at the disposal of Ministry of Finance project managers. This editorial (subscription only–sorry) from last week’s Nikkei English on-line edition delineates pretty well how things have developed:

The privatization plan will divide Japan Post into four companies respectively operating the mail, savings and insurance services as well as the nationwide network of post offices, but the four operators will remain under the integrated management of a holding company.

The holding company will sell its shares in the savings and insurance units to turn them into private businesses, but it is not clear what percentage of the stock will actually be sold. Moreover, the government will continue to own at least one-third of the holding company, allowing it to maintain its involvement in the savings and insurance companies, at least to some extent, unless the holding company sells its entire interest in them.

The mail and network management entities, which will remain under the full ownership of the holding company, will be required to provide uniform services nationwide in exchange for receiving special treatment, including a continued monopoly in the mail delivery business.

The branch network management company will inherit post offices and workers from Japan Post. The government appears to be intent on ensuring that the other three new postal companies will use the offices and workers of the network firm to protect these politically important jobs. Such forced dependence on the existing post office network will frustrate the new companies’ efforts to refashion themselves into more efficient and profitable players.

This scheme — creating an entity to take over Japan Post’s infrastructure and virtually forcing the other postal companies to use it — seems to be simply a ploy to avoid radical changes in postal operations while making the reorganization look like a reform, just as the plan adopted to privatize public road corporations based on a two-tier structure was merely a scheme to keep building new roads.

The envisioned savings and insurance companies are unlikely to achieve management independence as long as they are tethered to the infrastructure operator, which will not be freed completely from government control. This is not a formula that lends itself to independent and transparent accounting at the postal companies.

The basic design of the privatization will certainly cause this crucial reform initiative to go awry and it will do nothing to further privatization’s primary goal: ending the government’s stranglehold on a big chunk of private savings that is causing serious distortions in the financial markets and undermining fiscal discipline. Achieving this goal requires a swift and complete end to the government’s involvement in the privatized postal companies.

If you’ve got a sense of déjà vu here, you may be thinking of what happened to California’s energy providers, which taught us all the difference between privatization and deregulation. (And I must note, in fairness, that unlike the USPS, the Japanese Postal Service provides mail handling of pretty much unexceptionable quality.)

Added an hour later: Because I’m distracted by the Vertigo DVD and am also a scatterbrained idiot, I forgot to note why I’m finally bringing up the Postal Service reform in the first place: It’s what drove the selection of new appointees in the cabinet reshuffle Prime Minister Koizumi announced today. Heizo Takenaka, who’s going to end up with more joint appointments than Stanley Fish soon, will still be in charge of economic policy and fiscal administration, and he’s also been named the head of Postal Service privatization and reform. That’s a new, ad hoc post, of course.

Foreign Minister Yoriko Kawaguchi, who has distinguished herself largely by not having a big mouth like her predecessor Makiko Tanaka, is outgoing; she’d been reappointed in the last cabinet change. Her replacement is MP Nobutaka Machimura, who apparently has lots of connections in the US. He was Minister of Education back when (1) that’s what the position was called and (2) there was last a flap over Japan’s government-approved social science textbooks. More directly related to diplomacy, he was State Secretary of Foreign Affairs under…uh…Obuchi? Japanese PM’s sprang up and died like Mayflies in the late ’90’s, so I don’t remember. I wonder whether he was picked not just for his US ties but also because he’s somehow seen as being a good figure to guide the Japanese push for permanent membership on the UN Security Council? I mean, he would almost have to have been, but I haven’t seem him cast in that light in the preliminary reports.