This is a time of unprecedented opportunity for Japan. It may seem strange to speak of opportunity when the country's political and economic experts are struggling with the challenges of structural change. However, I believe the current pessimism in the country is the result of two misconceptions.

First, there is a misconception in the original diagnosis of the country's problem. Japan is not suffering from deficiency, but from surplus. That surplus is the result of Japan's postwar economic miracle, which ranks as one of the most astounding achievements of the 20th century. A creative, disciplined, insular people set new global standards for economic efficiency, resulting in the most rapid accumulation of wealth the world had ever witnessed.

Surpluses are potent forces. If not fully absorbed for growth of existing activities or for development of new and higher levels of activity, they get channeled into destructive speculation. They cause bubbles, and bubbles always burst, sooner or later. The so-called bubble economy of the late 1980s was a natural result of an export-led economic strategy that reached and overshot its goal of catching up with the West, then no longer had a clear direction to pursue.