 relates to the postal sector. This webinar series has been organized under the umbrella of Committee 2 of the UPU's Council of Administration, and it has a two-fold objective. Firstly, it's actually intended to provide a platform for dialogue and an exchange of views and experiences that will help inform the work of the UPU on a soon to be published research study on the evolution of the universal service obligation as it relates to the postal sector. And secondly, we're also hoping to deep dive into some of the key policy and regulatory challenges and opportunities that the pandemic has thrown up for the sector, with the view to getting a sense of what the road ahead may look like for governments in addressing the needs of the sector. As you're aware, postal regulation is an important tool by which governments can effectively position the sector to meet its rapidly evolving challenges and opportunities, as well as securing the critical infrastructure that the postal network represents through which various public policy objectives can be achieved. Now, the COVID-19 pandemic and the accompanying lockdown have effectively revealed the importance of the postal services to society. In fact, many governments have identified the services provided by postal and delivery operators as essential to the functioning of society during this time of crisis. Ports are often designated by governments as an essential service, allowing them to operate while the activities of many other service providers have been severely restricted. Importantly, some ports were able to rapidly implement new services in areas such as health, education and welfare, and raising questions about the expanding scope of postal policy and regulation and how best to engage with ministries and regulators from other sectors. It is in this context that this webinar series explores the postal policy and regulatory responses to the COVID-19 pandemic. The series will focus on three main themes. Firstly, the growing mandate of ports as an essential service provider. Secondly, the growing trend in changes to the quality of service requirements under national universal service obligations, either in response to the pandemic and or policy measures aimed at securing the sustainability of postal services. And finally, the funding of support measures for postal services. Again, either resulting from the pandemic or as part of a broader package of measures aimed at maintaining the postal infrastructure. Our webinar today takes up the first theme and that is of the growing mandate of ports in the provision of essential services. This webinar will explore the range of essential services that have allowed us to take up as part of the response to the pandemic and it will consider the important contributions that the post has made to that frontline COVID-19 response. We'll also discuss what challenges and opportunities these contributions have presented for stakeholders such as governments and postal operators with a view to trying to sort out some of the implications for the future of the sector. Now, before we begin, let me just talk to a couple of administrative points. Firstly, I'd like to request kindly that all participants keep their mics on mute so as to allow for the panel discussion to take place effectively. And second, if you do have any questions to the panelists or as the discussions progress, that you present these on the chat, which is the chat function which is at the bottom of the screen and we'll pick it up from there and present it to the appropriate panelists. Now, without further ado, I'd like to introduce our panelists for the webinar today. They are Dr. Bruno Pasalicko, who is the director with Copenhagen Economics. Now, with qualifications in industrial organization and economics, Bruno is a very familiar face in postal regulatory circles. In his work with Copenhagen Economics, he provides regulatory competition and impact assessment work with sectoral experience spanning across technology, media and telecoms. Digital online platforms, postal and delivery, utilities and e-commerce. We also have with us Dr, sorry, Mr. Yutaka Kitagami, who is the, who is a director with the International Affairs Office of the Ministry of Internal Affairs and Communications, Japan. Now, Yutaka-san graduated from the University of Tokyo with a BA in economics and has been with the MIC for over 20 years and he has served in a number of increasingly responsible positions in his time with MIC. He has served as court chair of committee five for the UPU Council of Administration, which deals with development matters for the past five years. And he also acts as vice chair of the Executive Council of the Asia-Pacific Postal Union, which is a regional organization dealing with postal matters for the Asia-Pacific. In addition, he has served as a lecturer at various universities in Japan. And our final panelist is Mr. Vincenzo Aurelio. Many of you will know Vincenzo. He's the head of relations with international authorities and organizations for post-Italian. Vincenzo has served in post-Italian since 2000. He has held the position of head of international accounting and statistics for well over 10 years with significant experience in international postal markets with a particular reference to the remuneration systems of those markets. He has been in his current role since 2018 and has led several development projects in the areas of management control and technological innovation. Now, Vincenzo of course brings a wealth of knowledge and practical experience as a senior employee of a postal operator. With that, welcome gentlemen and we will begin our webinar. First up, I'd like to call upon Bruno to address this. Bruno, you have the floor please. Thank you very much. Thank you to the UPYB for the invitation. Thank you all in the audience for dedicating the time to listen and contribute. And last but not least, thank you to the fellow panelists. I wait for the slides to be put on the screen. In the meanwhile, I will say a few seconds words about Copenhagen Economics, which is a specialized firm. It's a medium-sized company providing applied research and consulting advice across the sectors. The special view and interest in the postal and delivery sector. Next slide please. This is relevant because the COVID-19 question is a question that has impacted the whole world. How, when was it the last time there was an important trend and factor affecting every single country of the planet and making us think hard about what happens to our lives, to our health, to our society, and then to the economy and the business factors that drive activity in many sectors, including in the postal and delivery sector, which is in the front line. Therefore, we've been able to see this impact across different countries of the world. In the next slide, please. The impacts of the COVID-19 touch multiple sectors of the economy. It's a company that specializes in multiple economic policy areas, multiple sectors. We have not seen any single sector that has not been affected. This is a very significant impact. It will continue to shape the fabric of economy and society in the coming years. And in fact, I urge all professionals in each of the sectors, whether they are working in telecoms or in postal and delivery assets today and in postal regulation to think about the impacts also in the other sectors, also because clearly the postal sector and postal demand, which is the focus of my introduction remarks today, depends on the situation in other sectors of the economy, which count on postal and delivery to provide services. So it's a systemic sector, and therefore needs to look broadly in the economy and broadly in what COVID-19 has been doing and will continue to do to economic impacts. Next slide, please. We've seen in the first analysis, this has been confirmed that the impact of COVID-19 has been heterogeneous across sectors. From the earlier forecast to the closer realizations and a variety of sources from the UCD World Bank, our own early modeling and ongoing analysis, we do see clearly a very skewed impact across sectors. And of course, some of the more sectors where the provision of services and products requires close proximity, the close contact which has been blocked by the restrictions, these are the ones affected the most. And we do see sectors that also have been able to rebound and grow because the earlier forecast, such as the one shown here, for example, in the area of information and communication, have shown opportunities to grow and different ways to take business. Next slide, please. Looking at the macroeconomic pictures, which is the center of this introduction remark that I hope can stimulate the conversation by the panelists. I'm now the person in between yourselves and this expert panelist, so I should move as fast as possible. The key top line is one that is not a mystery. There has been a global contraction in GDP estimated around minus 3.5% for the year 2020. There are more statistics coming around than a single statistic for the entire world. There's still a difficult exercise and the jury is not out yet. There are variations across different countries, yet this is a major number. It may look small, but already a minus 3.5%, 4% contraction is a large upset in what had been a path of global growth. What does this mean for postal demand and the postal sector? Next slide, please. First of all, the postal sector is a sector which is a large employer in many countries, many of the largest employer. And the picture of employment has changed significantly across many countries. And globally, for sure, here is a broad spectrum of countries, some of the largest economies, all experiencing a big hit in unemployment. So this is also changing the picture of work. Next slide, please. Then the question is, what does the economic profession, what can the economic profession when applying postal economic models do? What are the strengths and limitations of these models? I think we have to be realistic here. Economics on its own doesn't have all the answers, for sure. We've done some exercise in order to show how dramatic the situation and the impact has been. So first of all, we've taken information on volumes from the year 2019 and the information on the economic GDP impacts as discussed earlier on. Together with the literature on postal economics, so econometric studies that country by country have been able to model in the past how changes in GDP, therefore the macroeconomic picture are associated with changes in postal demand. We've been able to create a static prediction which is not fully satisfactory, but it helps to show the comparison. And together with the ongoing trend in E-substitution, the ongoing trend in volume letter mail decline, these two effects, the ongoing letter mail decline plus the effect that could be predicted thanks to the literature of the change in GDP gives a minus 6.5% decline in letter mail. Now, this would be the static model, maybe a simplistic economic view of what the macro environment does to postal demand. However, we do know that the reality is much harsher than that. Again, the jury is still not out yet. Consolidated figures that are a global significance are not published yet. Some operators have reported results by quarter by year, so some information is coming. And certainly the impact have been on letter mail volumes larger than 6.5%. One of the early forecasts associated with the UPU has been at minus 21%. That's how dramatic it is. Which means that models, simplistic models just associate GDP. So the broader economy to what happens to the postal sector don't capture the full reality. It may be a starting point, but when there are significant macroeconomic crisis such as the one linked to COVID, and I would say also the response, the big macroeconomic stimulus and response which is coming now thanks to government expenditures, one needs to be to double click and look more in depth at the outcomes. Ultimately, both demand and supply have been affected by the pandemic, and there is a digital wedge effect. There may be shock effects to postal demand that go beyond what the GDP prediction would do. Let's look at the next slide to comment further on this. First of all, a key question is whether these effects are temporary or more persistent. We've looked at the previous global macroeconomic shock, so-called global financial crisis, let's say centered around 2007, 2008, and then we've looked at the volume decline that started there and trying to separate between countries for a first screening exercise concentrated on Europe, between countries that were at the time of the crisis less digitally active for the type of communications that are about B2B, B2C, G2C, are the basis of letter-mail demand, versus countries that were already more practiced and more practicing in using these digital tools. And we've seen that the global financial crisis has been followed by two different trends. So the impact of a global shock like this, in our view also with COVID, will depend on the level of digitization and practice of digitization in each country and how firms and governments communicate with the citizens and each other. At the same time, COVID-19, because of the restrictions, because of the social distancing and because of the widespread understanding that digital tools would provide a safety net, is also an activity which will strengthen and stimulate digitization. And the many funding provided, for example, as in Europe in terms of recovery funding, also include components that simulated digitization. So this may be an additional impact on the postal sector, perhaps also an opportunity. Next slide. A final question as an economist when looking at the profit line and when thinking about the role of Postal Essential Service, which is the topic for today, is to think about the bottom line, the profitability, the revenues that can help sustain a variety of services that postal operators provide, including all the very important essential services. And here, we cannot abstract from the profitability of the business. Profitability of the business is at the center. There will be also a forthcoming webinar dedicated to the question of the role of state funding in postal operations in light of COVID-19. That's a very relevant question. First of all, thinking about the profitability, our economic analysis of various postal businesses, confirm the business intuition that a lost one dollar, one euro, one yen of revenue from letter mail decline, hits profits much harder than again, one dollar from increased parcels sales. And this is because of the different margins available in these two segments as things stand right now. What we've done then is to think about how change in the mix between letter and parcels affects therefore the ability to generate profits from a stylized postal operator. So this is not a country specific analysis, but it is based on realistic assumptions on what the postal operators business lines look like today. Taking as input previous predictions on the impact on letter volumes and parcel volumes. So a minus 19% for letter mail volume and a plus 26% for parcel volume. We've asked ourselves with a simplified model, what will that do to profitability? Will that be good for postal businesses? The fact that there is always growth in parcel volumes. And the answer is yes, but not good enough in terms of overall profitability. So this is a concern point at the general level. And in our stylized model, which is not country specific and of course results will change by country, this would lead to a clear profit decline of 20% fall in total profits. Simply because even though the growth in parcel volumes is larger in volume terms, generally it is not sufficient to bring in the same amount of profits as the digital substitution of letter mail, the declining letter volumes brings as a negative impact on the profits. Last slide, I think we close here. So on these words, I am very curious to hear and learn from the distinguished panelists today. COVID-19 is a very significant macro trend and will continue to impact for bad and maybe for good with the world and the governments coming together to find ways to strengthen the economy. Therefore, I think it's important to ground in the challenges, the discussion about the positive role of the post essential services because it is not, it cannot be separated from the question of sustainability of the business and the future of the postal service. I stop here and look forward to questions and comments. Thank you. Thanks very much Bruno and thank you for that very interesting perspective on the impacts of COVID on the sector. There were two things that struck me in terms of what you were saying, which I think like us all to sort of think about a bit more as we get into the dialogue a bit later on. One is the sense that despite the growth and parcel volumes on the back of the delivery of everyday items to households in times of lockdown, this may not actually translate into better profitability for postal operators and in fact, does raise question marks in terms of their ongoing sustainability. That's something that's worth sort of thinking a bit more in terms of the broader context of whether there is actually then a need to sort of think through for a greater focus on diversification in terms of services to increase sustainability. And the second point, which I thought you brought to the discussion is this idea that the level of digitization and the possibility or the capability of post to be able to roll out a range of digitized services or at least operate more effectively in a digital world could make a difference. And maybe this is something that we need to come back to as well in our discussions a bit later on. But thank you Bruno and with that, I'll move on to Yutaka san who will talk us through the perspectives of a government in relation to the policy responses to the pandemic in the postal sector. Yutaka san, you have the floor. Sorry Yutaka san, you're on mute. Sorry. Yeah, thank you very much for the establishing very meaningful webinar series for IB. And yeah, I'm very honored to be invited to add the first webinar panel and also thank you for all the participants. I think that today's main theme is, so what are the essential postal services in the post COVID-19 era. So I'd like to show you what MIC and I think as essential functions of postal services in the post COVID-19 era, especially from the public policy perspectives. So this is a total summary of what I think is important. And so of course, the universal delivery of postal items across the nation and around the world is the core role of the postal sector. However, under the pandemic, five elements are getting emerged as other essential functions of the postal sector. The first one is to correct social disparities. And the second is function as a social loss result. And third one is hubs or hub for bringing solutions for social barriers or social problems. And the other one is to disseminate new values, for example, brought by cutting edge technologies, et cetera. And the last one is the hub of the DX. I think Dr. Bruno mentioned this aspect as well. And at first I'd like to touch the base or the importance of the infrastructure because to formulate a resilient, capable and universal network is the key to enhance all these five essential functions. I'd like to introduce the Japan situation. Actually, the post office is one of the most densely populated social infrastructure in Japan. If you are in Japan, you have been to Japan, there are so many convenience stores around the cities. However, in the mountain places, for example, in a village of the city, in a village of 300 people or population, usually there is only post office for the financial institution and the hub of the community, et cetera. And in Japan, including such a remote area, post office is in every about 600 meters. So if you walk through the street, there is another post office in the city. And this is protected, this density is protected by public regulation. And so that's why even post office is in very small island, remote island, and actually there is a post office on the top of Mount Fuji too. And so infrastructure is very important and I introduced some elements of the five new key elements of the post offices. And in the pandemic, there are a lot of the sectors which have difficulties economically and socially. And the government aids were delivered by a postal network and counters of post offices responding to the various difficulties under COVID-19 pandemic. And at the beginning, even masks are delivered by post offices to every household in Japan. And also even such a villages, small villages, people can receive the aids from the post office counters. And it's what I mentioned a lot, but as a social result, for example, MIMAMORI system is checking the elderly and handicapped by the delivery persons. And so this kind of health related and safety related services are also increasingly provided by post offices, especially under the pandemic. And as for the third element, I think the financial inclusion is very important. So I will introduce some details later. And as far as the fourth point, so not only the basic services, but also as far as the financial services, digital money or the, for example, the blockchain related services are disseminated by post offices. And so it's also important from the universal service point of view. And interestingly, the post offices physical station, but it's also have for DX and in Japan now, 5G mobile communication base stations are considered to be positioned at the post offices because in 5G cases, there should be one, even more and more, much more stations than the 4G or 3G, et cetera. And I will introduce a little bit about information bank later. And actually from the public policy view, the structure is also important. So before the privatization, it's a government body. However, after the privatization, Japan's postal company was divided into the Japan Post Bank and Japan Postal Insurance. And importantly, Japan Post are outsourced from the post bank and post insurance and also private financial companies. So this means the Japan Post or postal network get more equally utilized hubs or network for all the private financial companies as well, not only Japan Post. Bank and Japan Postal Insurance is. And I also touched some world examples and the financial inclusion is usually for the postal savings to provide with the basic saving measures. However, in the world, for example, Namibia is providing a smart card affiliated with post bank in post offices. And in Croatia, the virtual currency is exchanged with the real money in the post offices. That's because there are a lot of the immigrants there and they need such services in the coastline post offices. And in Japan, we are, Japan Post is dealing with digital money or digital currency affiliated with post bank in Japan. And this can be utilized in the various retailers across the nation. And so yeah, this is the summary of the, so I skip this page and I'd like to touch the importance of the digital aspect and Dr. Bruno said the digital preparedness is important to maintain the growth under the pandemic. And in Japan, the information bank is getting important as the driving force of the growth. And at the same time protecting the private information. And it's business to utilize system to manage personal data based on agreements on data utilization with individuals and provide such data on behalf of the individual to third parties. The Japan Post Group has so huge personal data because most of the Japanese people are using the delivery service of post offices and also have the accounts post financial account in the post offices. And so to utilize this big data for the purpose of the various other sectors getting important and is now under discussion. So also under the pandemic to have the regional specialties through the internet is also very important. And the Japan Post is also hubs to instantly he takes the, this is full set of codes to meet me in the hometown delivery parcels. And so this is kind of the e-commerce service in Japan's version. This was okay so. And so that's really is, so you may know already but Japan now contributing to the UPU for the purpose of the spreading these new essential service of the post offices around the world. And you know the DRM to make the post offices and postal network resilient to the disasters. And I think Siba-san made effort to correct the best practices around the world about the various social services via post offices. And it's now available for everyone. And so the every member countries can refer to this guide by the UPU to establish their own social services effectively. And also I think this Japan fund cover the most of the new postal key elements in the post COVID-19 era. And we are very waiting for the members countries to effectively utilize this service by the UPU. And this is the end of my PowerPoint but I'd like to touch at the last point that these are of course managed with profit in Japan. So this is not just a public service but by letting the post offices to do this they can provide these important public services with profits. So this is very important. And also another one important point is to promote the collaborations with other sectors not only the government. And so it's important for the digital transformation and so Japan actually in the time of the privatization we inputted some systematic organizational system to make this kind of collaboration easier. Yes, thank you very much. Thank you very much, Yutaka-san. That was actually a very fascinating tour of things that are happening in Japan in terms of the variety of services that the post is engaged with in terms of community services. I just took a quick list down its social services, financial services, health, regional specialties. And so that talks to the point I think that this seminar is about and that is to what extent can the post actually diversify into a range of other things that would not only make sense from a community perspective or from a public policy perspective but also, and this was a point that you raised which is a lot of these services are being delivered on a profitable basis. So it's profitability and the commercial sense of what's been delivered also is a key factor. A second thing that I thought was interesting in what you said was the importance of the structure of the sector and the approach the government takes to that because I think one of the things that matters in terms of how the post operates in an economy and trying to find that balance between its long standing public service tradition and the expectations that governments might impose on a post is also the need to find that balance with profitability and its commercial imperatives. And so structure issues is something that's worth sort of thinking about a bit more and because it's constantly a focus for governments across the world from the different models in terms of a post been purely in as a department of government to a completely privatised situation like in Japan where Japan post is a publicly listed company but so very interesting points that you've raised Yutaka-san and hopefully the points that you make will prompt our participants to also post a few questions in relation to some of these themes. Now I'd like to move on to our final panellists Vincenzo, please you have the floor. Thank you. Thank you, Shiv. First of all for this invitation to this very interesting conference and also let me, with everyone connected in different time of their daily life. I will just mention a few of the main points which were the characteristic of how post-Italian challenged the COVID-19 which now let's say is something like one and a half year because if we look we started since the last physical CA meeting we had in February 2020 and then when we went back home we were just already in full pandemic. Next slide, please. So I would just like to mention three points. Can you switch to the next slide? Okay, thank you very much. And which are the service continuity and the safety of employees, crisis safety committee and the service provider at the service of government. Next slide. As I was saying, we since February 2020 so at the outbreak of the emergency two were our priorities. First one, keep employees safe. Secondly, keep our services running. I appreciate also this comment from Yutaka referring to the possibility to post to carry on their business which were obviously also finalized to respect the responsibility that the posts have also in terms of employer towards their employees. Next slide, please. How did we face all the issues we were to comply with? A crisis strategy committee was engaged for meeting at the beginning of the pandemic. We had to do it every day and then sometimes each week to measure what was happening. If you remember Italy was at that time one of the country impacted more than the others in Europe probably in the world at that time we never closed post offices we never stopped delivery but what we needed at that time is to find a quick measure to put in place as for keeping the continuity of the services. So the strategic committee was just meeting for understanding what was possible to do and what we did was just simple measure. Each post office we are talking about 14,000 post offices were provided with the Paxiglas plan which made the possibility to have the prescribed separation from a customer and the person at the counter. Safety equipment for other counter and deliver staff, I mean masks, gel and gloves talking about quantity from 10 million pieces or 15 million pieces of gloves were provided already in 2020. Reduction of workforce sometime in the logistic chain to minimize human contact reviewing shift hours sanitization or mail sorting center post office and fleet also camera to detect the temperature were put in the in our headquarters and in each sorting center and work spaces with more than 150 employees. Information channeled to staff dedicated with portal and toll free number were measured to guarantee everyone to have enough information. The organization of operation to guarantee at least one open postal office in each area or community. Next slide please. Let's say together with the measure which was obviously the main challenge we had together with the government representatives we were meeting very often and the NRA we took the measure to ensure delivery services and protect customer safety at the same time for instance a parcel registered an issued item deposit with the address content in the address mailbox and the location with the signature but the postman on their delivery portable devices double deposit in terms of terms for registered mail item just to give customer enough time for coming to the office where they were not told because they were not told and so on. Brief suspension of business mail services to safeguard continuity of postal services as a whole informing partners through EMIS and thus thank you very much for the network the UPU makes available to us which is a wonderful way for communicating along the world. In terms of financial inclusion and obviously I refer to our line of financial inclusion even during the worst days I'm mentioning March April 2012 thousand or from December 2020 to February 2021 we kept open a number of services that I just highlighted before actions to guarantee pension payment to the elderly while maintaining social distances were also in place we increased the number of open counter to pay pensions at days where they were to be paid prearranged schedule in alphabetical order to the customer in five working days and this is very relevant it is the case to announce our being at the service of the government the partnership with the Carabiniere which is the Hyundai Almeri police in Italy for delivering the pension by them to the home I mean what I want to also describe this crisis as definitely underlined the crucial role of the Internet Postal Network because of our ability deliver services in the intrinsic reliability the universal service providers are trustworthy for government businesses and customer I would say as well as for e-commerce players and platform the universal providers play a relevant role in the public interest also when dealing with the services offering outside of the traditional scope of postal services I think it is one of the very relevant element which is a real mark for posts you know being inclusion for citizens in all the services the COVID-19 emergency confirmed the systematic role of the network offered by posts beyond the universal service as a unique asset for the purpose of state's public interest objective it enables the offering of heterogeneous services with the guarantee of unfailing accessibility throughout the territory the most vulnerable cities and those in remote areas rely on post deliveries to be physically connected the sector is however not immune to the impact of pandemic sustainability of the USO also let me say that sometime we were a little bit advantage because of our digital innovation and our information technology which is the backbone of the country we could also provide a lot of services which were not the kind of services we used to we used to provide because we could do that but we also the example is our engagement based on the direct request of the military arm is the vaccine distribution which we are providing all over the country and also with the possibility to book a vaccine directly by post-italian you can do that at counter like the cash machine just instead of a bank or postcard you put inside your insurance card the card recognizes you and you have a special screen where you can book based on availability of your vaccine and get information and so on and also you can do that if you want you can do that by app or by our portal or through the deliver man in case you want it I think this is what I wanted to share with you thank you I think it is very effective on the various things that post-italian has done in Italy and I thought there were two things that I sort of took away from what you had to say one was you use the precise words the post never stopped delivering even in the pandemic and you tied that in with this concept of the post again what all this stands to is the fact that the post remains still a very critical partner of governments in their own respective economies and it is a question of either enhancing that or potentially sort of looking at new and novel ways in which that can be further developed the second thing that came out from the very specific focus that post-italian had on employees and I think that is a critical factor whether it is in the past or even in the future in terms of the approach that we take to the postal sector as governments and this point being that the infrastructure is very much dependent on that human touch and at core the human touch is the employee and so the relationship with employees and how we focus on postal employees is also a very important dimension now I'm going to stop there what I want to do now is again open the floor for people to send through their questions through the chat function please feel free to either ask a particular question to a particular panelist and my colleague Susan Alexander will then read it out to me and will then try and have it distributed but I would certainly encourage everyone online to post their questions on the chat function but I'm going to kick off a few questions for the panelist myself and I'm going to also invite the panelist to try to interrogate each other and try to dive deeper into some of the key points that have been raised in this three presentations now my first question is going to be for Bruno and Bruno you talked about just going back to this point about despite the rise or surge in parcels delivery and the potential isn't quite there yet are you seeing then in the work that you are doing a concerted move by postal operators perhaps even supported by governments to look at other services things that could actually help increase the sustainability of postal operators because some of the things that we've seen in the pandemic and we've spoken to this the roll out of services that may not have been services that the post engaged with previously but they've sort of become critical I mean do these represent in your view as an economist a potential source of diversification and therefore new lines of business and so what do posts need to do to get there governments have to do it by way of support and encouragement and then of course bearing in mind other public policy objectives that a government might have for the economy as a whole thank you Shiva it's a very good question it's a million billion dollar question and there is certainly a trade off and attention between multiple policy and economic policy objectives one is diversification as a good business and to and to propel postal businesses a second one is the very well good hearted and immediate response that the postal designated operators have deployed in the front line in the toughest moments to support the population support the economy keep many of the countries open and deliver an important and terrific support through more and more services and finally the role of the state legislatures in thinking about where is the greatest value what resilience what level of resilience what infrastructure I think you talk as I was mentioning this concept at the start and it's a very important concept what infrastructures are needed for a modern society to function and be strong in the face of potential adversity while being cohesive enough I think it's not just not just about strength the ability to be together even with social distance for example it feels like a paradox but it is exactly what has been achieved thanks to the network as I said economists I have to also think about those euros and dollars and yen which are necessary to keep a postal infrastructure in place and the challenge which is a challenge perhaps also for the next webinar on this series of webinars is to test whether the policy makers are able to provide secure and stable funding lines for the services that they see fit and where the postal industry can deliver value and contribute in a way that is unique and can support the society there is a conundrum here and this is this is also said because despite the great support by postal companies in the front line and we heard also earlier on from you know some of these are also kind of related to the role of connections with military and other important kind of defense activities despite this the diversification into some of these services may not be as revenue supporting as other activities and so there is a question from the demand side the buyers the policy makers if they like these services then they should put a ring on it there should be adequate fundings and business lines that would allow financial planners and business strategies to be able to count and bank on them so to be able to be there for the state for society at all the times of need so I think there are some hard questions for the policy makers first of all to thinking about what they can do to help the postal sector and to what extent there must be certainly some rules and conditions and limits to make it efficient and effective Thank you very much Bruno that's very good because it sort of leads me into a question for you Takasan as a representative of a government you know it's from the experience that we've had at the UPU one of the one of the key predicators of success of a postal operator and the postal sector as a whole the dialogue that takes place between a government and the postal operator and the dialogue that takes place between the postal operator and other partners other players in the broader economy what I would like you Takasan is perhaps if you could share with us how MIC went about in the context of the pandemic with Japan Post on some of these challenges that Bruno is talking about in determining how do you support Japan Post in its possible diversification into some of these other additional services in line with public policy objectives but also in line with what you said was a key criterion that it should remain profitable and as part of that dialogue how did you engage or did Japan Post how was Japan Post encouraged to engage with other players within either the postal sector as a whole or the broader economy it will be very interesting to hear how MIC approached this I'm sure for colleagues from other governments yes thank you very much for an excellent question it's not an easy task to coordinate such a public kind of services by the post especially there are some conflicts between the government institutions for example now more and more post offices are providing with municipal services for example in the remote area there is no longer the branch of the municipal government so the post office is required or requested to provide them however and my section in the government would like to promote it but there is a section in terms of the regional governments and they actually esteem the role of the regional government so sometimes they reluctant to to open the satisfaction to the post offices so this is not an easy task but the key word is probably communication so the Japan Post need to request to our sections in MIC of course but I recommend the Japan Post to also go to the other sections or other ministries in church for example in terms of health aid if the Japan Post want to deal with it so talk to the ministry of health in Japan and so that is such communication is very important and however if it's not overcome finally the legalization of making new role is finally necessary so in terms of combat to address the COVID issues government made a very strong role to make various institution possible to provide extraordinary services like the public services including in the post offices so I think the first communication between the government and the post offices and also the Japan Post and private sector and especially the various sections related section in the government sector but in the last time it's a political kind of initiative to make a very strong role with implementation authorities are very important so there are some steps and some key initiatives to go through thank you very much Yutaka-san and I thank you for that very important point that you're making which is it's not just in relation to crisis situations or you know where there is a disaster to deal with this idea of a hold of government approach to national priorities is and where the post is actually engaged as a partner in that hold of government approach is what we are finding from the upuse perspective as a UN organization it's actually very critical for the success of many policies in many countries particularly in developing and least developed countries the idea for example that if you've identified e-commerce and the promotion of SME trade small and medium enterprise trade as a critical national priority when governments approach those sorts of priorities from a whole government perspective where you have different ministries and different stakeholders both public and private as well as the post as part of that dialogue often case we find that communication lines begin to be a lot better and it results in more coordinated policy frameworks supporting frameworks and actually action on the ground so that's an excellent point I want to make sure that you know participants they are absolutely free to raise questions that might be burning in their minds to pose to the panelists please use the chat function and we'll pick it up from there I don't want to be the only one who's asking questions for sure but I do have a question for Vincenzo before we sort of keep progressing with this Vincenzo one of the things that we've heard Bruno and Utaka Sanse is the importance of making sure that the commerciality commercialities of a particular service is clear i.e. that the business case is made for it and this seems to be increasingly the approach that governments take to this because what they do not want is an additional burden on relatively stretched budgets from the perspective of an operator Vincenzo do you see some of the services that have been ruled out by post-Italian in the context of the pandemic or possibly even before that and you talked about health services you also talked about pensions and so on do you see these services as term services that the post in Italy will continue to engage in because the it makes sense from a profit and loss perspective it also makes sense from a community engagement perspective and if it is something that will carry on what were the sort of criteria that post-Italian used in determining to what extent that you needed to engage in these services thank you for the interesting question also you just anticipated a comment that I would like to make to Bruno's interview on this issue I think it is a very very thin connection between the providing inclusion by post-operator and making revenues, making profit which is obviously something we had to do because as I was telling you before we have our responsibility towards employees we could not stop this wage which was something which was not let's say true for any other employee in the private sector especially once employed in restoration, tourism and things like that all that said I think there is a sort of investment that the post would do in this role of inclusion the inclusion which obviously I mean if you were committed by military arms to to a disabled vaccine you can understand that it was just cost there were no revenues coming from that if we go with the police it is trust to citizen because they feel they are served as citizen not as customer I think I've already pointed out that in a previous conference we had on financial inclusion where someone from the audience was asking which was the recipe of post-italian for having access to financial inclusion the inclusion is something you cannot put in place tomorrow morning it is something you build step by step you slowly get the trust of the customer and once he trusts you you can evolve on top of that post-italian and have the capability in the years to go to reflect on the needs of the customer and provide all the services which were necessary which were not only delivering when we faced at first the decline of post-items we invested more on financial and now we are in the insurance sector we are investing in sustainability we are also investing in health we are setting medical center first for employees but we think in the future can be something also for citizen post has had a big opportunity you know it's like you have already the network you just need to develop services it's something which obviously has to be organized with all the actors institutional actors and also with the other partners which will not sell in competition because this is the state in Italy we are trying to do the services which we think are useful referring to your question actually on the specific services we put in place as emergency services we did not take them longer as matter of fact we are already back we are now delivering registered mail-on parcel and also I mean the situation has changed a lot since mostly 30 millions of people have got their vaccines so the situation is getting better day after day we have experienced that we have the this capacity to put very quick in place emergency measure so it's something that we have in the drawer and if it's needed we can use it again because we are already experienced in that Kopa I answered your question you did Vincenzo and thank you very much again you've come back to these two points we talk a lot about this in all our conversations within the UPU with broader stakeholders and the two points being this idea of inclusion and how the availability of the postal infrastructure allows us and you use the words inclusion of the citizen and that really is in some respects the role of the value proposition of the post and in fact that is indeed the sort of narrative that we use as a UN body about the role of the post in trade inclusion the role of the post in financial inclusion the role of the post in social inclusion and it is a core value proposition that I think it's important for all of us to understand and value and push it forward and the second point that you raise is this trust and again I ask myself what is it that is special about the post and why do citizens trust the post now I think we've got to also be honest with ourselves that that experience isn't necessarily across the board, across the world and as a general proposition probably true but at core trust is also dependent on the reliability of the post in terms of the post getting its basics right and we see that in some parts of the world where the post like it or not has lost confidence of the citizen because the basics have not been right and that's where I think it's also important for governments to recognize you know getting the post in the right spot getting the post supported and recognizing the role of the post through the relevant support could actually enhance that trust and it could then have a developer virtuous circle in terms of the role of the post in public policy as well as in terms of meeting the needs of citizens so these are a couple of things that I think it's worth sort of thinking about as takeaways from this webinar as well now I understand from my colleague Susan that we've got a couple of questions for the panelists and Susan could you kindly tell us what those are and then we can try and allocate those Yes absolutely hello everyone and we're glad to have you all here we have two questions from Franklin Furtado he's from Brazil the Ministry of Science Technology Innovation and Communication the first one is to Bruno he's his first great presentation by Copenhagen Economics and he'd like to know if Bruno can tell us which countries were studied for the presentation on the decline in profitability Yes the presentation is based on ongoing analysis it includes multiple inputs it includes postal literature which includes econometric empirical studies from a few countries I think some of these have included US, UK and this is an initial an initial element in the calculation based on this we've developed our own model and we've also based this on some empirical findings from a survey that we did about a year ago which was open globally though I think it was mainly again evidence that drove the trends the trends in letter mail and parcel volumes so it will be a multiple set of countries though not the entire set of UPU countries that is the evidence for this however what is most important is that whether each country recognizes itself in the trends that are there and we are aware that there will be different business models in each country so the level of profitability, what are the margins for each unit of letter mail, for each unit of parcel does change country by country and these are the ingredients that we encourage to study research of course as the financial control groups do and also think looking forward about the best balance for the postal service to find the best path to profitability so that would be our suggestion thank you Thanks very much Bruno I hope that answered Franklin's question but I think he's got another one as well Susan? Yes this question is to all three of the panelists and he asks in the post-COVID era aside from being a hub for several social and governmental policies how will the postal services remain essential services given the fact that there is such an ongoing increase in digitalization of communications Very good question thank you Franklin and it comes back to a theme that we touched upon in Bruno's presentation which was also taken up by Vincenzo and this is about digitization and how digitization and also in fact Hassan did talk about this as well in terms of the information database or data bank that Japan pose might be involved with so it's a very important theme and so if I understand the question it seems there's two parts to it one is gentlemen the first part is about what are the challenges that digitization raises for posts in terms of still being relevant in the services that they provide and the second is really about the opportunities is there ways in which the post can actually ride on digitization and actually enhance their value proposition and also bring greater diversification in the services that they provide and therefore ultimately leading to a more sustainable postal operator now maybe I'd perhaps start with Yutaka-san on the first question or please feel free to address both parts as you may please Yutaka-san I see yeah thank you yes I would like to raise one example about the yes for the question and yeah I think some months ago Japan Post had kind of the cooperation contract with the Rakuten Rakuten is an eco mass giant in Japan and actually force the mobile company in Japan so this is I think it has great potential for Japan Post to strengthen its competitiveness and Rakuten is also taking advantage of this chance because as I said Japan Post has a lot of big data and Rakuten would like to use it and also Rakuten would like to put the mobile terminal station in the post offices and Japan Post would like to have the business skills or the tips of the eco mass from Rakuten so these allies or the collaboration is one of the keys for the post to be competitive but at the same time from the government point of view so to keep the fairness of the competition is also important because the Japan Post network is utilized by Rakuten exclusively the other companies like the Dokomo and other mobile companies or the eco mass giants can't use Japan Post so Japan Post is very important infrastructure for Japan so Japan MIC would like the Japan Post network open to other companies as well and that is actually for the Japan Post to be free to collaborate with other companies as well so from the public policy point of view so such macro or big picture economic policy is important so to keep openness for the Japan Post network and allies are important and it's also good for the Japan Post and Japan's economy and Japan's social health or soundness thank you Yutaka-san in essence if I understood you correctly what has been attempted in Japan is to try and make sure that the Post is working with a whole range of private sector partners where there is potential to ride on the comparative advantage that each partner brings to that relationship you know in the example that you gave you have a major e-commerce marketplace working with Japan Post and you're combining a physical network with a digital network effectively and riding on the comparative advantage that each is bringing and that brings not only value to the citizen but also to Japan Post in terms of commercial viability and sustainability and that is a very interesting point that you make and it's a good example again about the importance of dialogue and cooperation yes and also the so I'd like to keep the Japan Post network also for other networks so that's important from the economic policy yes thank you I can turn to Vincenzo next and Vincenzo if you could come back to the two parts that I try to pull out in terms of the issues of digitisation can you remind me which was the left hand the first part was about the fact that digitisation has challenges for not everyone's at the same level of digitisation and how does that actually potentially impede the Post and how can that be overcome the second again sort of broadly I think the theme is can the Post overcome those challenges to be a value proposition through increased digitisation and what sort of services in a digital world would actually make sense actually let's first of all say in a wider way that if we didn't have the state of digitisation we probably could not challenge this pandemic at all and I refer to all the providers of services even in our role of international relations we had this fantastic capability of converting our role from physically meeting to teleconference obviously I would say that post-italian was a little bit advantage in the challenge because it was something we had already invested before so it was easier for us to use all the digital capability for support as much as possible services where it was not possible to apply physical practice we used to do before so I would say that in the end we didn't really saw impact on the US caused by the pandemic we also respected the quality objectives of service which were not changed by the Italian authority as part of our annual check obviously there were some results that were correct just because of the force measure that were not only applied in Italy but as you know by the communication it was a normal request of many countries in the easy the possibility of using where possible digital services is like where we were saying before we experienced the possibility not to collect the signature by the customer but do it by the postman at the same time digitally speaking we could inform the customer that the item had been delivered all the digital knowledge at that time was really useful avoiding any gap in the provision of services Thank you Vincenzo and I'm very mindful that we're coming close to the end of our session but I do want to give Bruno an opportunity to address those two specific points that we discussed by Franklin because Bruno did touch upon this issue about digitisation and the comparative advantage that it is creating in the market space so Bruno please share with us some of the findings that you know Copernac and economics has pulled up on this front Yes and I will be very brief, mindful of the time essentially digitisation it provides large opportunities for new and old services to be conveyed more and more efficiently I think some of the role of the post when we think about infrastructure and assets that can be shared across multiple services this is what we call the economics of scope synergies in economics and business, well the brand and the trust that the postal institution has with city consumers is an important asset and can be reused and used to stimulate digitisation and better outcomes via digitisation so that's an incredible opportunity it applies also to already existing services such as e-commerce delivery where the more e-commerce is taken up across countries the more opportunities for business are there for all players including the post in this segment, however the other side of the double-edged sword is the impact it has on traditional forms of paper-based communication so that is still the elephant in the room and it is particularly important the more countries postal demand is made of bulk mail government to consumer, government to cities and business to consumer communications and this is an opportunity to continue to tap into those business to consumer relationships but also a value at risk in so far as the new digital tools from the state creates a risk that traditional ways of communication will be not just complemented but also substituted by the digital tools so the jury is still out on that one however it is a process to be managed country by country and I think the digital discussion will continue staying with us for a long time and it will continue being closely matched with the COVID impact conversation so looking forward to hear more about this thank you Bruno and those are excellent points so I'm just wondering Susan whether there are any more questions for us and for the panelists no we don't have any more in the chat today okay thanks very much Susan if possible I would like just to complement what Bruno said just a short indeed I mean what Bruno differentiated is indeed you know something is the reality you know on the other hand relating to the second point I mean the fact that obviously the digitalization is a cutting edge for the for the traditional post you know traditional mail this is an opportunity for two reasons because we as a postal operator we knew that before it happened until we had the time while the volume are declining to try to do something imagine if this was something which could happen you know in six months you know it's something we are talking about a long time ago so the opportunity is that we know that we have a problem the second one is that they are obviously a possibility to invest in digital and as I was saying before this is a message for post to try to diversify services as much as possible because it's sure that we will lose the traditional post but of course we will be much more let's say impacted by e-commerce parcel I understand that the profit is different because obviously you know I mean managing in a packet is much more you know let's say timely consuming than a single letter that could be easily managed by automated machine it's something that can anyway lead a sort of a reconversion that postal entities can do following that Thank you very much Vincenzo because that is excellent because it leads quite naturally to our wrap up and to try and pull out two or three things and I seek the indulgence of everyone here if I can just try and pull out some of the themes that we've covered which are important themes that we've heard in the past we've talked about but in the context of even the pandemic it's also clear based on what we've heard today that those themes remain highly relevant for us both in an intergovernmental organization in a business perspective as an operator but also importantly from a broader economy sense one of the key things I've heard here today is as Vincenzo said the importance of diversification and it's about thinking out of the box and recognizing that what the post has and what the postal sector represents is an infrastructure of trust and human contact which potentially lends itself to the delivery of a whole range of services it's not just about parcels or letters it could be anything so long as it sort of meets that criteria and the comparative advantages that the post presents what is also part of that discussion or thinking which is important is that it's not just about rolling out really it's about also recognizing the importance of having a business case and rolling out those services and recognizing that the profitability and the commerciality of the provision of the services is critical the second thing that I thought was very important which is a theme that's running across the board and everything that we're doing in the UPU is digital transformation and the importance of the post becoming a clear player in the digital world and here we have a variety of experiences we have a very developed post like post Italian and Japan post being in a space to be able to actually capitalize on what they've already done to meet the challenges of the future but we also have many countries post in many countries or not in that space or the critical importance of focusing on digital transformation the third is and this is a theme that Yutaka-san particularly talked about it's about whole of government cooperation and communication as well as in conjunction in terms of partnerships with other players this is actually quite critical we see it ourselves in terms of the work that we do developing in these developed countries but a whole of government and partnership approach is really quite critical and the final point is it's about inclusion and again I used the word inclusion in a broad sense the post because of by virtue of its network and because of its human touch is capable of being a channel for inclusion across a whole range of things and again it comes back to the point my first point the importance of thinking out of the box both as an operator as well as a government in terms of how you might actually rely on the post to achieve things so those seem to be really some very key themes which have come in our previous discussions but clearly even in the context of the pandemic I think these are still remain relevant in terms of our future of the postal sector and policy making for the future finally just to wrap up a couple of announcements one is we were scheduled to hold our second webinar on the 24th of June on quality of service this will be taken up on the 1st of July it's been postponed because we wanted to make sure that we had top notch panelists available to us so this will be done on the 1st of July our third webinar will still go ahead as planned and this is scheduled for the 29th of June which will be on funding state funding of the postal sector and possibly other developments within the postal sector again I want to take this opportunity to thank the three panelists for their time and commitment and for sharing their experience and views I thank people who have also asked for questions and I want to thank everyone for taking the time to be with us and I hope it has been a very useful exercise a useful webinar and something that we can take a few key points back with us as we go about our daily lives over the weeks and months ahead of us so thank you very much everyone and thank you for your time good to see all of you