There has been a lot of controversy and commentary about the visit by Prime Minister Junichiro Koizumi to the Yasukuni Shrine. The anguish expressed by some, especially in China and the Republic of Korea (South Korea), has been matched by stubborn support from a considerable number of flag-waving Japanese. The debate has narrowly focused on the past.

But what needs much more attention is not the past but the future of Japan. What Koizumi does next to fulfil his promise to reform Japan is much more important and concerns all of Asia. This goes far beyond Yasukuni, but can in some ways be connected to it.

Before Koizumi, the mood in Japan was gray and uncertain. Although still rich, the country's self-confidence had been eroded by a decade of slow or no growth. Unemployment was a growing specter, and weaknesses in some domestic sectors, outside of manufacturing, also started to show. The country's prestige, as a model to be admired and followed by developing countries, was affected. With a quickly aging society, some analysts predicted a Japan that is heading toward decline in the longer term.

With his landmark popularity and maverick image, Koizumi has brought a change of mood. He promised wide sweeping reform, and acknowledged there would be pain before gain. What the Koizumi government is precisely committed to still remains to be fully clarified. However, the reform agenda has been discussed for many years among Japanese thinkers and bureaucrats and there is a rough consensus on what needs to be done. Remaining questions are more about political will.

For what is needed is not a simple change to some technical policies. Economic changes will interact with political and social factors. For example, if Koizumi changes the post office savings system as he has promised, this will impact infrastructure projects, with ramifications on construction companies and their workers and sub-contractors. This sector has been a mainstay of support for the ruling Liberal Democratic Party, and the loss of jobs is likely to impact votes.

Reform threatens the system that has arisen in the postwar period, the political system and social glue. As such, the needs today can be likened to the Meiji Restoration. That historical precedent witnessed the rapid and revolutionary opening up of Japanese society and the country's economy, with widespread impact at many levels. Historians tell us the Meiji period balanced its reforms with the strengthening of nationalism and the definition of what, in essence, it meant to be ``Japanese.'' Opening up, and giving more emphasis to nationalist sentiments, went hand in hand.

It is in this context that the visit to Yasukuni can be seen in a different light, especially by Japan's neighbors. Koizumi's visit shored up his nationalist credentials and increased his public support. Now, like the leaders of the Meiji reform, he should use his popularity and nationalism to make the painful reforms more acceptable. Koizumi had, after all, promised to make the Yasukuni visit before becoming prime minister and followed through, in the face of foreign pressure and criticism. Now, Japan and all of Asia should hope that Koizumi has the courage and public support to go ahead with reforms, as he also promised.

The signs for reform today are not strong. No firm agenda has been set by the government. Meanwhile, the economy has turned sour. Big companies are slashing jobs, output is falling rapidly and the country is again in economic slowdown. If Koizumi is to act effectively, he must begin now.

If reform fails and nationalistic symbols of the past increase, many will be concerned. In such a scenario, it is possible that popularity can turn to popularism. Tensions with Japan's neighbors can rise. This is not only over historical issues but can include present-day differences over trade, commerce and regional influence.

If, however, reform proceeds apace, others in the region should understand shows of nationalism in Japan. A proud and more optimistic Japan is more likely to be able to carry out sharp changes. In its history, Japan has gone through great periods of reform. It has always emerged stronger and with a firm, although changed, sense of itself.

Japan's neighbors, and indeed the world, will await signals that the reform is proceeding. Perhaps one small sign will come from the agreement expected between Japan and Singapore, for freer trade and closer economic cooperation. This is due by the end of the year, and will touch on many areas in the new economy, as well as domestic sectors that have been sensitive to Japan.

In this integrated world and for Asia especially, the efforts for reform in Japan will have implications for all. For while the Asian crisis has scattered the flock of geese that followed the Japanese model of development, no alternative has yet been found. The new downturn, caused by the sharp slowdown in the United States, also shows the danger of an over-reliance on one market.

A reformed Japan can take its full part in the leadership, toward a shared future with the region. If Yasukuni is a necessary nod to the past to smooth the difficult path forward for Japan, it may be well worth the price.

The author is chairman of the Singapore Institute of International Affairs.