BERMUDA'S apparent inability to re-evaluate, restructure and reposition itself in preparation for the entirely new economic and political world order, already evolving since the terrorist attacks of last September, continues to give serious cause for concern, Sir John Swan said this week.

Reminding Bermuda that it is situated right on the doorstep of the biggest and most dynamic economy in the world - America's gross domestic product being bigger than Japan, Germany, Britain and France combined - Sir John warned that Bermuda must remain close with its giant neighbour for the foreseeable future.

"America is still our major trading partner and Bermuda's destiny will continue to be intertwined with that of America. We are fortunate in our historical and economic ties which have benefited us enormously.

"During the Cold War we, along with other strategically important countries, enjoyed infrastructural and social benefits but, as we are now well aware, the end of traditional Cold War alliances has found America increasingly developing different interests.

"Since being hit by the worst terrorist attacks the world has ever known, our giant neighbour is looking more and more domestically inward. They are building up their armed forces and general security and, as a part of this general thrust, some members of the US Congress are initiating legislation to force American companies back onshore.

"And," warned the former Premier, "in order to do that, some in Congress are using such inflammatory words to describe off-shore companies as being 'unpatriotic' in order to create strong public opposition against those companies who do or who have set up off-shore.

"These tactics, created by some American legislators, are undoubtedly putting our off-shore business under threat. In addition, we must always be mindful of the constant threat of inflation and generally low growth globally, as a result of over-capacity and much higher commodity costs such as oil.

"It is absolutely essential, therefore," Sir John reiterated, "that this country immediately concentrates its collective mind on building a diverse economy that's truly unique in what we offer, that is user-friendly and sufficiently interesting and attractive enough to be regarded as a 'must' on people's travel plans and as they do business in the island."

Sir John pointed out that, during a downturn in any economy, forward-thinking people typically use this time to plan for a future which, in Bermuda's case, will certainly be quite different to anything experienced since the collapse of the Cold War.

"Wise preparation," he said, "is like riding the ocean waves: if you can survive the troughs and prepare yourself for the rises, you can take advantage of the lift that that will push you forward towards your desired destination or objective - provided you are facing in the right direction.

"Bermuda needs, as never before, to be forward-looking and to plan now, and to plan wisely so that we're in a good position to take full advantage of opportunities that present themselves once this current recession is over."

Another danger, said Sir John, was the distinct possibility that this economic recovery could be different from those in the past and may well be short-lived: "There are now so many treacherous conditions that could shorten the recovery or even drive us deeper into recession.

"We must remember the awesome challenges that face us as a result of the increasingly widening gap in the standard of living between rich and poor nations, as well as the widening gap between people living in the developed world - something that we can see happening right here in Bermuda."

The leading businessman pointed out that these differences were now being made more complex by growing, major policy differences between America and Europe on trade, foreign policy, communications and law and order issues.

"There is a marked reluctance on the part of Europe to embrace American security and foreign policy issues - the Israel/Palestine crisis and the potential renewed attack by the US on Iraq being prime examples."

These increasingly clear policy divergences hammers home the fact that America's huge population remains relatively - and perhaps increasingly - isolated and insular. This can be seen from the fact that, out of a population of some 280 million people, only 35 million have passports, Sir John explained.

"So, although America has enormous economic and military strength, we are seeing - especially in the Middle East - its diplomatic and foreign policy influence apparently decline. The new independence of spirit currently being shown by the European Union and the ever-growing assertiveness of the Chinese means that a new paradigm will likely emerge which will produce a conflicting set of circumstances - all of which could have an adverse effect on Bermuda and its future well-being."

Sir John listed these as (1) as a result of hard-earned lessons in such places as Korea, Vietnam, Yugoslavia and Somalia, there will be even less inclination towards interference in other countries' internal conflicts; (2) America will become more isolated, and with greater facility to view the world through the Internet and the media, fewer Americans will travel overseas; (3) America's global assets will be recalled to provide for building or renewing its own infrastructure and security and (4) The risk of human casualties in any military campaigns that are undertaken will be reduced by the use of "smart" weapons. And, while America will be more and more reluctant to "go it alone" in any foreign military initiatives, it will make increasing demands on other nations to participate.

"With all of this happening right now around us, it is vital that we, in Bermuda, understand that there is a new world order emerging. The 20th century has already started to crumble and," emphasised Bermuda's former leader, "will be replaced by completely new science and a new civilisation.

"This new world order is not, in any way, what it used to be - and probably not what we think it is going to be! And, more importantly, we will have no control over it. What we do have - and I would beg Bermuda to think about this very carefully, and before it is too late - is control over how we conduct our affairs in the light of these changed circumstances, and to ride the waves of change with a clear sense of purpose, a clear idea of where we want to go, and a clear idea of how we are going to get there.

"If Bermuda hopes to survive in what will probably be a strange, new world," urged Sir John, "we need to start re-structuring now."