Japan surprised the world in 1987 by splitting up and privatizing its deficit-ridden
national rail network. Ten years later, the newly-founded JRs are providing better
services to their customers with much smaller workforces and improved safety records.
Apart from the still-accumulating JNR old debts, which were taken over by the government,
the reform has been a success at least in terms of improved service and
efficiency. Many foreigners admire this achievement and try to learn some direct
lessons from it. The Japanese are also so proud of the success that they tend to believe
blindly that it is a panacea for all ailing national railways.
It was indeed a drastic change. However, it was the inevitable consequence of many
failures in the previous decades by the government, politicians, JNR management,
trade union leaders, and the media. In short, Japan failed to adapt JNR to the changing
transport market, because nobody understood the real significance of the growth
of motor and air transport, which deprived the railway of its monopoly. Inadequate
and late rehabilitation plans failed successively, and the ill-fated JNR was finally driven
to bankruptcy and dissolution. Because of such failures, the reform had to be radical.
The true lessons can be learned from the long history of prior failures rather than from
the success story of 1987.