Looking back to 2000, the critical question hanging over the Japanese economy is: Has there been movement, or at least the preparations for a move, toward a new system befitting the start of a new century? The answer, unfortunately, is no.

The continuing plunge in the Tokyo stock market illustrates the grim state of the economy. Adding to the gloom is the slowing of the U.S. economy, which casts a shadow over the world economy as it moves into the 21st century. There is no reason to be overly pessimistic, but the truth is that Japan's economy has made little or no real progress over the past decade.

The collapse of the speculative bubble in 1990 sent a wakeup call to all in Japan, particularly the government and the business community. But government leaders and corporate managers have failed to take full advantage of the lessons learned. That failure has turned the 1990s into a "lost decade" for the Japanese economy. With no solid signs of improvement at the end of 2000, the stock market had nowhere to go but down.