THIS is a pivotal moment in history. The global economy is in the midst of an almost unprecedented crisis.\

Japan has not been spared the ill effects of this global crisis. Indeed, but for a brief recovery in the last few years, Japan has faced rather difficult economic circumstances in the last two decades.

However, these prevailing circumstances today are not unique. Japan's leaders and its people have responded to similar challenges in the past with renewed vision, resilient effort and decisive action, sometimes transforming Japanese society in fundamental ways as a result. Some periods that come to mind when this happened are the Meiji era in the late 19th century, the building-up of industrial Japan from the early 20th century to the 1930s and the post-war reconstruction of Japan from the ashes of World War II.

It is this success against long odds that led to Japan becoming the object of admiration the world over, particularly among different Asian leaders. Japan has long been held up as an example of a society that has shown the strength to re-invent itself time and again, while maintaining the continuity of traditions that date back several thousand years.

The way forward for Japan out of the present crisis clearly will require transformational change. It will involve coordinated efforts on multiple fronts by multiple actors - political leaders, corporate leaders and leading universities such as Keio. The young will also have important roles to play. There is no reason why Japan will not surge forward again.

During the last years of the Tokugawa shogunate, Japan was a society in great ferment. One of the most notable features of the Charter Oath of April 1868 during the Meiji era was its fifth provision: 'Knowledge shall be sought throughout the world so as to strengthen the foundations of imperial rule.' Thus Japan borrowed ideas from all over the world and incorporated them in a new synthesis.

Japanese politics, society and economy were fundamentally transformed during the Meiji Restoration. On the political front, Japanese leaders studied various systems - British, American, Prussian, French and Spanish - eventually adapting much from the Prussian constitutional system.

Significant changes occurred both in the society and economy. The Meiji era adopted the market economy as well as British and North American forms of free enterprise capitalism. In the early 20th century, Japan emerged as the first Asian industrialised nation.

The lesson from the Meiji period is that Japanese society has tremendous potential to adapt to change. Whenever Japan opened its doors to new influences from abroad, it has flourished.

This happened again during the 1950s, when Japan rose from the ashes of World War II, up to the 'quality revolution' in the 1970s and 1980s. The leading 'quality' theorists like Joseph Juran and Edwards Deming who influenced Japan so much were in fact Americans. The significant quality improvements achieved by Japanese firms gave Japanese products a significant competitive advantage over their competitors. Eventually, the quality revolution came back to America through firms like Xerox - which learnt it, ironically, from its Japanese joint venture, Fuji-Xerox.

Singapore too has learnt much from Japan. In 1965, when we became independent, Singapore was one of the poorest countries in Asia. Singapore's economic development was given a pivotal boost in the 1970s by Japanese investments, technology transfer and training.

We witnessed first-hand Japanese companies' emphasis not only on acquiring advanced technologies, but also on investing in the workers who work the machines and manage the companies. The Japanese worker was greatly admired.

In 1972, we established the National Productivity Board. With the help of Kohei Goshi, who was the chairman of the Japan Productivity Centre at that time, the National Productivity Board helped to improve the productivity of Singaporean workers. Our Work Improvement Teams, Quality Control Centres and On-the-Job Training were learnt from Japanese companies.

In education, our schools have emulated Japan in emphasising the sciences, mathematics and computers. In public safety, we have modelled our neighbourhood police posts after Japan's Koban system. In the environment, our Public Utilities Board studied how Japan succeeded in conserving energy. Like Japan, Singapore is what it is today because it was able to adapt to changes.

In the future, Japan, even as it maintains its status as an important developed economy, will face rather unfavourable demographics - an ageing and declining population. While it is for Japan's leaders to decide on the appropriate policy approach, it would appear to interested observers like me that China, India and the rest of Asia present quite interesting opportunities for Japan.

In the globalised world that we face, the integration of our economies will continue and is not reversible. That being the case, Japan, like other major economies, will have to adapt to changes quickly. It behooves Japanese youth to recognise this reality and move forward. As they have done time and again since the Meiji era and after World War II, young Japanese should go out into the world, bring back ideas to revitalise your country and your economy, and take the next leap so as to re-establish Japan's pre-eminence among the leading nations of Asia in the 21st century.

This article was first published in The Straits Times.