Government and the business sector needs to work together to ensure Bermuda's future economic prosperity — that is the reality according to Sir John Swan.

In the past relations between the ruling Progressive Labour Party (PLP) and particularly the international business community have been strained over a number of issues including work permits.

But Sir John, a former Premier, who was this week speaking ahead of the launch of his landmark 141 Front Street building, believes the best way forward is through a private-public sector partnership to build the foundations for future generations.

"We need to be flexible but we can't be protectionist in our approach, so it is a question of how we see the future for Bermuda and preparing it for the next generation or two," he said.

"We can't burden them with debt without the means to meet that debt — it is up to us to lay that foundation and we must work as a private-public sector partnership in order to do that.

"We need to work towards those solutions to make Bermuda a sustainable economy so that we are not buffeted by every trend that impacts us negatively when the positive aspects of the economy are in our hands."

In an interview with The Royal Gazette, Sir John pointed out that the Island had a greater control over its destiny than most countries, with its advanced human and technological resource-driven economy serving its financial needs, and it was a question of how prepared the country was to make that system more attractive for others to use Bermuda for the same purpose and take advantage of the opportunities available.

"There are opportunities such as wealth management that we might have to look at as we have never looked at things before like giving concessions to bring the other activity it brings with it," he said.

"We have to think outside the box if we want to support this infrastructure that we have, for example, for building a new hospital."

Sir John said that a 30 percent reduction in the Island's expatriate workforce, most notably in the construction industry, had helped to soften the blow of the economic crisis initially, but there will be wider reaching effects further down the line on the lives of Bermudians, such as fewer jobs and opportunities to rent their property due to the migratory shift.

"We have got some work to do if we want to continue the Bermuda that I think that people have learnt to take for granted," he said.

"It is not a given, it has to be done by us as Bermudians with the commitment to make it happen."

But he predicts that Bermuda will not fully feel the repercussions of the recession until between November and the end of the year, with locals having to drop their rents and property values falling, as well as a decline in demand for goods and services.

Sir John also believes that regardless of whether Premier Ewart Brown steps down in October or who replaces him, a private-public sector partnership needs to be fostered to help preserve and promote Bermuda.

"We can't afford to have a divided Bermuda — it is too small and we don't have that luxury," he said.

He said the PLP would continue to run the country as it sees fit and until the electorate decides, otherwise then they have to work with what they have got.

Turning to his new building, Sir John said that good progress was being made and it was on track to meet its completion date of late July/early August and ran almost to budget.

Ironshore has revealed it will be moving into the new building before 2011 and Sir John confirmed there were other tenants lined up with a total of about 40 percent occupancy, while one company which will be relocating its headquarters to Bermuda has expressed an interest.

The building is already starting to take shape, with the scaffolding coming down and rails and sun shades/reflectors being fitted on the windows, and it is already set to be prominent feature in Hamilton's landscape.

"I think you will see a magnificent building unravel over the next couple of months," said Sir John.

But there is still some work to be done, including tenant fit-outs customised to suit their needs, as well as the gym and restaurant to be fitted out.

The commercial property market has offered a mixed return for developers and landlords over the past year, with the likes of The Power House in Par-la-Ville Road becoming full this year but the Sago Properties Ltd. building next door still taking time to attract new tenants.

Sir John subscribes to the view that the market has softened in recent months with some activity and a movement away from older buildings into new developments as tenants seek to upgrade to "international" style premises.

He added that, from personal experience, some people were also looking to downsize to smaller units but still demanding the highest quality in terms of location, technology and facilities. Meanwhile being in Bermuda means international business, re/insurance companies, fund managers and captives have their needs catered for from a regulatory and legislative perspective.

"This building here offers both an in house gym, some parking, a restaurant and all the latest in technology with lots of fresh air and four sides of light coming into the building, as well as showers, and bathrooms on each floor," he said.

"We have also got total redundancy and generating power in this building — one will service the building and the other is used as back up — which is very important."