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.

The DPRK may be preparing to test-launch another missile:

The United States and Japan have detected signs that North Korea is preparing to launch a ballistic missile capable of reaching almost anywhere in Japan, Japanese government sources said on Thursday.



The preparations were detected after the reclusive communist state refused to take part in a fourth round of six-party talks on ending its nuclear ambitions and said it would never give up its nuclear deterrent.



Tokyo and Washington had detected the signs after analyzing data from reconnaissance satellites and radio traffic, the Japanese government sources said.

The Nikkei Japanese edition also reports that the North Korean central news agency was published as saying, “If the US brings about a nuclear war (on the Korean Peninsula), it is inevitable that US bases in Japan will draw Japan into the same nuclear war as well.*” Don’t you love that? The DPRK regime was just sitting there south of the Yalu, minding its own business, getting on with the quiet domestic tasks of deciding which citizens to imprison and which to let starve to death from its incompetent economic policies, when the US swaggered by and forced it to get all bellicose.



Fortunately, no one’s certain that there’s a launch planned; everyone’s just on watch. We’ll see. As far as the blow it might deal to the six-member talks goes, who seriously believes the DPRK would have been persuaded to give up its missiles, anyway? It has a notorious record for breaking agreements. I don’t think negotiations should be stopped, of course–things could get really ugly if everyone openly gave up speaking to each other–but I think the disruption of this particular round of talks is less significant than having yet another show of animosity in the region.

* Lit., “US bases in Japan will become a fuse that draws the flame of that nuclear war to Japan, too.” Evocative metaphor, huh?

Okay, you know that mushroom cloud they saw over North Korea across the border from China on Friday? Well, we certainly heard about it here in Japan (flyover country for the DPRK’s test missiles). There didn’t seem to be much to say about it, since, unlike the explosion a few months ago, when casualties were reported almost immediately, there have been none from this weekend. It seems to be as certain as it can be that the explosion this weekend wasn’t nuclear. The DPRK says it was for a hydroelectric project. North Korea is very mountainous and has plenty of hydroelectric potential–in fact, it’s significantly more resource-rich in many ways than the South–so that’s not a far-fetched explanation. Neither is South Korea’s conjecture that the explosion might have been an accident in an underground munitions facility. In any case, the Chinese have reported no influx of the injured into their hospitals across the river, so it’s possible that it was a controlled blast with no injuries, or (more darkly) that the operation was so secret that the DPRK is not allowing the injured to be treated where they might be noticed. You never know, especially since the North Korean government would account for its actions the same way no matter which was true:

The BBC said that when [DPRK Foreign Ministry official] Paek was asked why North Korea had not explained earlier about the blasts he told Rammell Pyongyang had not done so because all foreign journalists were liars.

So Prime Minister Koizumi went to Pyongyang, where Kim Jong-il has said he was welcome, most welcome. The meeting apparently ended in less than two hours–perhaps there was a spontaneous city-wide banquet in Kim’s honor that he had to rush off to–but there was plenty to talk about. There’s that little matter of nuclear disarmament, for one thing (the DPRK has been known to file missiles over our heads in Japan–just testing, you know).



But the focal point was clearly the Japanese abductees. Five have returned to Japan; that leaves eight that the DPRK says are dead (I can’t remember all the cover stories, they’re so lame; one involved graves being washed away in a mudslide and therefore unrecoverable–things like that) and two that it claims never entered North Korea. So from the Japanese viewpoint, there are five abductees repatriated and ten missing, of whom the DPRK acknowledges eight. That’s a total of fifteen, which I’m pretty sure is lower than the number of cabinet ministers and party officials currently implicated in the non-payment-of-pension-premiums scandal, but I could be wrong.



The Japanese are trying to get abductees’ family members (mostly children) in North Korea to Japan, which is why there’s such a fuss over US Army deserter Charles Jenkins, who defected to North Korea in the ’60’s and is married to abductee Hitomi Soga. The US has indicated that it may, in fact, expect him to be handed over for court martial if he accompanies his daughters to Japan to see their mother. All of this making nice with the DPRK makes me sick, but I guess diplomacy wouldn’t be a delicate business if it always involved dealing with good people.



Added at 1 a.m.: Predictably, the families of abductees are stomping mad that Koizumi didn’t push more for information about those unaccounted for. One’s heart goes out to them–most of these people were snatched off Japanese soil in their teens or early twenties, remember. But I have a hard time imagining what good a hard-line stance would do in this kind of case. The DPRK is run by whim-driven nut cases, unfortunately. In the meantime, children from two families came from North Korea and were reunited with their repatriated parents near Haneda Airport. It’s been a year and seven months since they’ve seen each other. One of the parents, Kaoru Hasuike (beautiful name, that: Kaoru means “fragrance,” and Hasuike means “lotus pond”), said, “My daughter has become so lovely….and my son has grown tall.” The last sentence in this article reports, “With that, he broke into the smile of a proud father.” Good for them. Let’s hope the rest of the endings are as happy as they can be.

Wow. Two trains containing inflammable materials have collided in North Korea near the Chinese border. Both the CNN and the Nikkei (Japan Economics Journal) articles report that the DPRK news agency hasn’t broadcast the incident. This is not just some little sideswipe in the middle of nowhere that’s going to cause a government energy agency to lose (even more) money. There may be up to 3000 casualties. Those poor people. Given that the accident involved fire and industrial chemicals, the injuries are probably pretty nasty.



It isn’t hard to imagine the combination of mismanagement and substandard equipment that might have brought this kind of thing on. It also isn’t hard to imagine the quality of medical care people will get, even with China’s assistance. The proximity of “self-sufficient” North Korea, with its news blackouts and constant leakage of refugees (not to mention those missile tests), is one of the creepiest and most depressing things about living in this part of the world.