Bermuda will be scarred by business failures and serious unemployment -- unless urgent action is taken.

The spectre was raised yesterday by leading banker and ex-president of the Bermuda Chamber of Commerce, Mr. Louis Mowbray.

Mr. Mowbray said Bermuda had to play catch-up because key economic issues had been neglected while the Independence controversy raged.

And he urged Government, hoteliers and unions to forge a much closer bond to breathe fresh life into the tourism industry.

He also appealed for a rethink of the proposed education system overhaul, but stepped short of demanding a change of direction.

"My message is very simple. Bermuda is confronted with a number of major issues.

"We are beset with change both on and off the Island and that is going to continue.

"For 18 months we have in effect tried to place these issues in abeyance while we debated Independence. As a result we have some catching up to do.'' He listed Bermuda's problems -- flagging tourism, a retail industry under threat, rising crime and drug abuse, and bitter controversy over planned education reforms.

Mr. Mowbray, speaking on behalf of the Chamber, told Hamilton Lions Club that solutions to revitalise tourism had been suggested by the Commission on Competitiveness, set up by former Premier the Hon. Sir John Swan.

"All of these recommendations called for action and some for implementation in 1994, sadly there is little evidence of any action and a great deal of evidence that the much heralded report has scarcely been read.

"As a result our vital industry on which all of us depend is still sliding.

"If that continues we can expect to see business failures in the next 12 months and in my opinion serious unemployment is not far round the corner.'' He added: "There is no doubt that urgent action is needed, and now. A blue print has been prepared.

"We do not need more studies -- we do not need more brainstorming. What we do need is to get on with the changes that are required to bring tourism back to health -- many of them contained in the recommendations of this report.'' Mr. Mowbray, executive vice-president of the Bank of Bermuda, said the Chamber of Commerce believed an Island-wide effort was needed to resuscitate tourism.

"The Chamber supports the view that a much stronger and more active partnership should begin between the Government and stakeholders in the tourist industry including hoteliers, retailers, restaurateurs, tour organisers, and labour unions.'' Turning to the retail industry, Mr. Mowbray said it was well known spending in most businesses had been in decline.

There were a number of reasons, he added.

"Items which once were found only in places like Bermuda or could be bought much more cheaply here and now found everywhere often at lower prices.

"Multi-national distribution of products has improved tremendously and in many cases wiped out Bermuda's former market advances.

"The growth of high volume/low mark up shopping malls on the US eastern seaboard combined with low cost travel packages to those locations has made it increasingly attractive for Bermudians to shop off the Island.

"Cable television, the use of 800 telephone numbers, and more recently the Internet have brought US shopping into Bermuda's homes and living rooms -- as well as those of visitors to the Island.

"Businesses in Bermuda are burdened by higher salary costs than their US counterparts as well as by a costly structure of customs duties which the Government relies on for a large piece of income.'' On community problems, Mr. Mowbray said pollsters Penn & Schoen had surveyed Bermudians in April on their concerns.

And topping the list was crime (47 percent), followed by drugs (42 percent), and education (28 percent).

Mr. Mowbray said the new Police Commissioner Mr. Colin Coxall had laid out priorities for the service, which included tackling these problems.

"These priorities fit very well with the two leading priorities of the community and what is now needed is partnership and the support of the Government including financial support -- as well as active support from citizens and organisations in the community.

"Not long ago I was asked to be a member of the Board of Inquiry into the circumstances surrounding the arrest in Miami of some members of our national football team.

"The testimony of people not only in sports but from all areas of society about the pervasiveness of drug use on the Island did not make pleasant hearing.'' Mr. Mowbray added: "Again the blueprint is there but what is needed now is clear leadership and implementation.

"The Chamber and the business community are very supportive of the new Commissioner's efforts.

"However, we realise these matters also must involve a community-wide effort and cannot be solved by the Police Service alone.'' Mr. Louis Mowbray