The economic slump over the past decade has crushed Japan's confidence and raised fundamental questions about the government's ability to turn things around.

But the planned creation of an electronic government is stirring hope that an efficient and transparent administrative system may finally emerge to help revamp the economy.

Expectations of change are running high in the business community, especially among those faced with intensifying competition from powerful foreign rivals backed by IT-savvy governments. Last year, the government pledged to go electronic by the end of March 2004 to bring about gains in efficiency, costs and information access. The plan is the centerpiece of the government's "e-Japan" strategy, which is aimed at positioning Japan among the world's elite in information technology.