When Hong Kong returns to China, Bermuda will be the most populous of the few remaining British colonies. It may well be expected to take the lead in talks with Britain to establish a new status for those small states which have chosen to remain with Britain. Any talks will be complicated by the fact that, in all probability, Britain will have a new labour Government. Bermuda will also have a new Governor.

Indeed, there is some possibility that Bermuda too may have a new Government.

While no election is necessary until late 1998 and we think an election before the Country settles down from the Independence referendum which led to "The Five'' and to the whole McDonald's mess, would be most unwise from the point of view of the UBP, it is a slight possibility. It would be wise during 1997 if the UBP did itself the favour of putting the disruptive Independence issue to rest.

Whatever the political events, Bermuda will have to concern itself with tourism and the retail economy. There is nothing wrong with the basic economy which remains strong but two large employers of Bermudians, tourism and the retail sector are in trouble.

Tourism will continue to be a problem until regular visitor arrivals improve to the point where hotels show a reasonable profit. That will not be easy because the resistance to Bermuda is based on price and Bermuda is a high expense area. Any solution to this problem will take the help of all Bermudians. Bermuda is unique and we must make the effort to improve on what we are rather than making fanciful changes.

The new Cedarbridge Academy will open and with it the dream of offering all young Bermudians opportunities unheard of in other countries. Whether or not Cedarbridge can succeed is very much an open question but there is no doubt that Cedarbridge deserves to have a good start.

It will be a year when Bermuda will have to face the problems of both transportation and traffic. There will be a new bus system by summer. We will have to face providing hotel courtesy buses and other forms of low cost transportation now that we have agreed to price taxis in the "special occasions only'' range for most visitors.

The reorganisation of the Police Service should continue to reduce crime and public support for the Police will increase as Police success grows. The year 1997 may be the time when the PLP will feel secure enough to take a clear stand against crime and drugs. If Government settles down to work we could well make real inroads on the drug problem. The public is deeply concerned about drugs and the people involved in drugs and we must continue to push against drug abuse, including alcohol and tobacco.