or risk losing their jobs, Premier the Hon. Sir John Swan warned yesterday.

In a speech delivered to a California audience, Sir John said the economic boom of the 1980s and encouragement from political leaders helped raise huge expectations in the electorate in Bermuda and elsewhere.

"We have thus created a quite impossible situation: We have expectations far higher than we can satisfy, we have demands for instant solutions to complex problems, and there is very little tolerance for delay. We are also faced with problems which defy a quick fix.'' Bermuda, like much of the West, became complacent with its successes. Business and political leaders failed to understand the need for real change. And instant communication has spawned public demand for instant solutions and changes, he said.

Failure to deliver change doomed former Soviet leader Mr. Mikhail Gorbachev and had threatened the current administrations of the US, UK and Canada.

"It even threatens us in tiny Bermuda,'' he said. "Our challenge in Bermuda is to become the authors of acceptable change rather than the victims of change itself.'' Sir John's speech -- which he was expected to extract from a 19-page typed text -- was delivered to the prestigious Bohemian Club's annual "think tank'' retreat north of San Francisco. The club's membership includes many of the world's top political and business leaders.

Sir John noted that the optimism of the 1980s had been replaced by "caution and concern.'' Leaders of Bermuda and other countries needed to examine what the changes and "come forward with a new order capable of serving our countries today and tomorrow. Should we fail in this, we risk rejection and a decline in the quality of life in all of our countries.'' And while the problems were not unique to Bermuda "our electorate had no tolerance for international comparisons. Our political survival demanded extraordinary steps and we started to plan for the future like we had never done before.'' The flurry of recent task forces and commissions stemmed from that planning: the Commission on Competitiveness, the Task Force on Employment, the National Drug Strategy, the Access to Government initiative and the criminal justice system review announced last week.

All these impact the Island's racial environment, Sir John said, but added: "We have now reached a maturity in our society where the real task of total integration can be addressed. We have come a long way but elements of prejudice and discrimination still exist.'' Sir John revealed publicly for the first time that plans were being formed "to embrace society in a national examination of these problems and to develop meaningful plans to foster a new level of understanding and participation.'' Sir John said much had been accomplished in Bermuda.

The Island was a world leader in tourism, and had established itself as a world leader in international business.

"We grew arrogant in our success and came to believe that this success would never be challenged,'' he said.

"But while we were resting on our laurels and letting our economies grow without direction or analysis, there were others who were analysing the future and making...decisions that were long-term and went beyond the short-term profit motive.'' The Island consistently had one of the top three per capita incomes in the world and had successfully created "the largest proportionate middle class in the world.'' But ownership needed to be spread further. "We are determined to create a country of owners who all share in the national equity and who all have a real interest in the success of that country,'' he said.

The people will not forgive the failure to change, he said.

"Our people are frustrated but they are also feeling empowered,'' he said.

"They will not hesitate in using this new-found sense of power in evoking change if they remain convinced that the system itself is incapable of providing that needed change.

"In short, they will change the system if it continues to be unresponsive.'' "As a political leader, I went through two of my three national elections creating expectations, building dreams and encouraging people to reach for the stars,'' Sir John said. "I was convincing, and they reacted. Now I must acknowledge my accountability and provide the route map for this new understanding.

"The people we serve are threatened,'' Sir John said. "They are less confident of the future than at any time in the last century. They have lost faith in the leadership process and they feel address.

"They know something real and meaningful must be done and they are aware that change is underway, yet they are frustrated by a perceived lack of leadership.'' Hon. Sir John Swan.