between Bermuda and the United States had to be narrowed to get tourism back on its feet.

And in a hard-hitting speech at the Chamber of Commerce annual general meeting, he said Bermuda would not know how far the US planned to cut back at the Base for at least another year.

Sir John said Bermuda's standard of living continued to increase after 1981 when the US standard began to drop.

"The result has been a growing gap between the American cost of living and that of Bermuda,'' he said. "In real terms, we have seen steady declines in our tourist business since 1981. This has been reflected in hotel occupancies, which dipped below 60 percent year-round for the first time.

"If we are to return to normal occupancies, the lesson is clear,'' he said.

"We must contain the cost of a Bermuda vacation. We must stop any further widening of the gap between our cost of living and that of the United States.

"We must make sure that when we offer value for money, it's value for their money we are talking about, not value for ours.

"Don't get me wrong. I am not a prophet of doom. I believe we are not very far off course. I think we can get back on track. I think Bermuda was a winner and has the know-how and the resources to be a winner again.

"Now it is just a question of Bermudians having the will to get back on track. We have to learn to change with the changing times.'' He added: "The days when employees felt able to shut down businesses with strikes and demonstrations must be a thing of the past. We have all seen how delicate the economy is.

"Labour and management must work their problems out in cooperation with each other. Extreme action should be reserved for extreme cases, and not taken whenever there happens to be an excuse for it.'' "The Chamber has an especially important part to play in all this,'' he continued. "In a new era of global competitiveness, human resources are of prime importance. That means, in Bermuda, a new era of employer/employee cooperation.

"When people feel secure and have high self-esteem, their performance is better. Employees feel that way when they are accepted as valued partners in the enterprise in which they are employed.

"They need to understand and take part in the direction in which the company is going. They need to feel their employers care about them and how they feel.'' Sir John said the world was changing and at the end of the recession, it would be divided into three trading blocs -- Europe, the Americas and the Pacific Rim -- and that Bermuda would continue to be tied to the US, which was experiencing serious economic difficulties.

"We would do well to understand that the world as we knew it is not going to be the same once the recession is over,'' he said.

One thing which would not be the same, he forecast, was the role played by the US and Canadian bases, which had long been taken for granted.

"We still do not know what will remain once the paring down of the American defence budget has been completed. The US Secretary of the Navy told me a few weeks ago that the extent of the US forces to be left at the US Naval Air station will be decided in 1993 after a further Congressional review of the US military bases.'' Sir John said Bermudians were showing a new willingness to take an active role in determining the future of the Country.

"They want to do that, not by demonstrating and putting pressure on the Government and business, they want to do it by stepping forward and saying `How can I help.' We encourage that attitude.'' He said the task force on employment and the Commission on Competitiveness needed the work of Government, labour and business to succeed. The commission needed qualities such as innovation and open-mindedness for business to succeed, especially for examinations of ways to diversify the economy.