The Japanese prime minister, Junichiro Koizumi. Photograph: Koichi Kamoshida/Getty Images
Junichiro Koizumi, the Japanese prime minister, took another big step yesterday on the path of economic reform when his ruling party approved a package of bills to privatise the country's labyrinthine and creaking postal service.
A vote in parliament is expected some time in mid-October on the issue that precipitated parliamentary elections and Koizumui's subsequent triumph on September 11.
The ambitious sell-off plan should allow Japan Post's assets of £3,500bn to be invested more rationally, instead of being pumped back into costly public investment projects.
Although not everyone favoured the move, Koizumi's electoral triumph holds important lessons for other countries trying to push through difficult economic reforms, Germany being a case in point.
Koizumi would not have won such a strong mandate without the economic gains of the past. Japan has managed the transition from the "lost decade" of the 1990s without the kind of shock treatment beloved by some economists.
Improvement has been slow but it has finallydawned. Unemployment is at its lowest level since the late 1990s, wages have started to rise and last year saw property prices increase in some major cities for the first time in more than a decade. After 15 years of stagnation, the Japanese economy is on the mend.
The Japanese electorate gave Koizumi a vote of confidence because he had already proven his mettle as a reformer with Japan's sick banking system. When the Japanese bubble burst in the late 1990s, the country's banks were saddled with colossal amounts of bad debt.
In the teeth of strong opposition, Koizumi and his team of reformers forced the big banks to write off their bad loans and stop rolling over others to companies that could not repay them.
The overhaul of the banking system worked and most of the big banks are profitable again. The successful clean-up was instrumental in restoring economic confidence and returning to economic growth.
During its period of stagnation, US policymakers chafed - Koizumi probably did too - at the slow pace of reform. But Japan has managed to get there at its own pace.
