the Hon. Sir John Swan said yesterday.

In an interview with The Royal Gazette -- the second in a series with Bermuda's three party leaders -- the Premier exuded optimism about the state of the Island despite a recession that has created high unemployment and undercut tourism revenues.

He defended his Government's record, particularly its efforts since the early 1980s to build the Island's infrastructure.

"We did not squander the 1980's like a lot of other countries,'' he said. "I think when you compare Bermuda with any other country in the world, we're way ahead. Even in recession we have fared well. I'm upbeat because I think we're going to weather this well.'' The Premier said he was very aware of the need to introduce Bermuda to US president-elect Bill Clinton. Maintaining the US military bases and key tax advantages for Bermuda's international companies were priorities, he said.

"We will have to work with the new Administration. I hope to meet with Mr.

Clinton within a reasonable period, as soon as its practicable to do so.'' Sir John said he already had strong contacts within the Democratic Party as a result of his diplomacy in the 1980's to secure Bermuda's tax treaty.

The Premier also responded in a feisty, partisan fashion when asked about the Progressive Labour Party.

He rejected Opposition Leader Mr. Frederick Wade's assertion last week that race relations were at their lowest ebb since the 1960's. The PLP, he said, were out of touch with contemporary Bermuda.

"If there's an indictment against the Opposition, it's that they're still living in the 1960's and 1970's,'' he said.

"They're still back there fighting our historical position. They talk about racism, but its talk based on out-of-date perceptions.'' Sir John: `We will weather this' Question: Election speculation has caught the imagination of many people around here including the PLP. It began at the end of the summer with reports of you ordering UBP representatives to get out and talk with constituents. Did you believe your party was getting out of touch with the people? A: I felt that the summer months were coming to an end and that I wanted my members to be out and canvassing. We do have a need within the next 15 months to have an election and, as such, we don't want to do things at the last minute. We want to be able to be sure that the option is ours whenever we decide to take it.

It has nothing to do with having an election today or tomorrow. We have to be in touch with people and to listen to their problems. We need their feedback.

We're speaking to people because the Country is going through a metamorphosis, in terms of its economic environment.

The times are not easy because it is not a Bermuda recession and not a United States recession. It's a world recession.

What we are discovering is that a lot of people are aware that there is a global change.

Q: Do you find your powers as a Government, given the global nature of the problems, are limited in terms of helping the people? A: Well there are two ways of looking at it: First, we are very lucky in that we didn't squander the 1980's like a lot of countries. If you look back you'll see we continued to build and improve the Country then -- Bermuda College, telecommunications, the Police, its new computer system, the Dockyard development, there's Global House and the improvements to both hospitals.

We really built a strong infrastructure in the 1980s. We also developed a lot of social programmes. People are getting treated for their medical problems.

There were education improvements.

If you look at the Bahamas, Barbados or Jamaica these changes did not take place. As a result, they're going to have difficulties going through these economic changes.

Housing is one of the most significant improvements made in the 1980's. There is no country that has produced the housing we have today. If you go back to 1980, remember people were out in the streets or living two or three families to a unit. People tend to forget all those conditions.

Q: Opposition Leader Mr. Frederick Wade said last week that race relations in Bermuda were at their lowest ebb since the 1960s. Do you agree? A: Well, obviously Mr. Wade is anxious to polarise the Country and hoping he can capitalise on, if there's an election, purely on the basis of race. I don't believe the Bermudian people subscribe to that approach.

Bermudians, whether they be black or white, have grown a lot in recent years.

They've become much more independent of themselves and don't feel a compulsion to prove something so much to each other as they've got to prove it to themselves. That's a big switch.

As a result, they've become much more independent thinkers and not subject to racial politics. They've learned to support each other and respect each other in a much more honest way. That's sometimes seen as less progressive. But if you go around the Country, there are far more whites living in black communities and vice versa and the school system is far more integrated. The job market is far more integrated than it was ten years ago. Marriages are more integrated. And you tell me we're at a low in race relationships. It just doesn't gybe at all. It doesn't mean there is not room for improvement. But we've made meaningful progress.

Q: Parliament is to reconvene with the spectre of a long, hard winter ahead.

The Opposition is charging that your Government is not doing enough to help people. Would you respond, and can we expect more initiatives to help people in need? A: It's typical Opposition to make statements without any sort of substance to it. They don't know what's going on. They don't ask. They haven't been participants in the solution process. They've only been cry-babies, crying wolf. The bottom line is we've been making jobs available to people. We have been giving social assistance, housing assistance, encouraging the private sector to keep people on, pushing jobs in terms of construction projects.

Q: Earlier this summer you gave a speech in San Francisco that indicated political leaders were in a bind to meet impossible expectations they'd helped create among their citizenry. Why has this happened and do you believe your Government can satisfy the people? A: I think we have built this tremendous middle class society by providing good education, good health care, good job opportunities. People have been led to expect good things. The momentum of that process continues whereas the economic side has fallen off very fast because it was outside of our control.

The point I was making is that you can't dampen down the expectations as fast as the process that creates resources. And it is incumbent upon us to work with our people to keep them informed so they understand these faults can occur and that they better adjust accordingly.

Q: You also spoke of the need for societies to become more competitive. How does Bermuda stack up as a competitor in today's world? A: I think Bermuda's done remarkably well. I think we have built both a strong physical and intellectual infrastructure. The vast majority of people in international business are Bermudians, the vast majority of people running the Country are Bermudians, the vast majority of people who run the businesses generally are Bermudians and they're doing good jobs.

We have a high demand, high-expectation society and we tend to be critical of ourselves. But when other people come here, they see us doing a good job. I think that with the commissions on competitiveness and on employment we can make improvements and go further. I think Bermuda is very competitive.

In tourism, if you take into account what's happening in other destinations, we're still very competitive. What we are seeing is our visitors just not having money to spend. I don't look at that as a measure of Bermuda tourism failing as an industry. That doesn't mean I don't think we need big improvements, but I see it as the product of global conditions. People don't have the means to spend at this time. When the US settles and the prospect of job security takes hold again people will start spending money on their vacations.

Q: This is an era of political change showing voters to be short-tempered and ready to kick out incumbent politicians. Do you think the winds of change are blowing in Bermuda? A: People are going to judge their government on two things: one, what have they done for the Country overall. This impacts on people's lives. And, two, what is Government doing now that can affect them in the future.

I think when you compare Bermuda with any country in the world, we are way out ahead. Even in these times when the US has been in recession for longer than normal, our Country has still fared well. I think Bermudians will judge the government in how it has performed under those circumstances.

We have a very educated and judgement-oriented society which most countries don't have.

This is a good Country. True there is some pain out there and some hurt. It hasn't all gone well. A lot of people have less than what they had, but still, when you compare us to what's going on elsewhere -- think of crime, how bad it is even in the best countries.

No, I'm upbeat because I think we're going to weather this well. I think we'll come out of this a lot better because we've good contacts overseas.

Internally, Bermudians did so much in building the infrastructure over the last decade I think it's paid off. People don't see the Country falling apart.

They don't see people's health neglected. They still see a healthy society.

Coming out of this (recession) I see a Bermuda that will be much more international, both in tourism and in business. I see a Bermuda that is going to embrace more of an outlook for sharing, more of a partnership, more of an ability to achieve consensus. There is more of a willingness among many people to nnnnshoulder responsibility. We didn't have that before. People moaned and didn't offer solutions. That's why I find the Opposition out of step with its own people. They're making a lot of noise but not offering any solutions. All they say is this is wrong, that is wrong and we will make it right. But when you ask how they're going to make it right, there's a big void.

Q: You've been Premier since 1982. Do you think your years in power deprive you of fresh insights on the problems of Bermuda? A: I think my years as Premier has helped me to grow. It has helped to give me insights into what's going on in the rest of the world. I try to bring those insights back to Bermuda. It has given me far more energy than I had. It's energy that's far more directed. I think I'm doing much more now than five years ago, or when I first came to office. I know who the players are. I know how far to push things. I know where the weaknesses are and where to tap resources from overseas. That comes from experience. I think that experience is very critical at this stage of our history.

Q: Has your vision for the Island changed since you became Premier? A: When I became Premier I said: "We've got to get the back of town to respect downtown and downtown to respect the back of town.'' I said that whether we were black or white, rich or poor, we were Bermudians and must learn to respect and be tolerant of each other. I do believe that today that is much more the reality than it was say in 1980. Then, there was far less tolerance, far more isolation.

I wanted to build the infrastructure of our country, both physically and intellectually, so it would benefit people. I wanted to remove the scourge of real substandard housing, which is gone today. I believe that once that happened and there were opportunites for people to get to know each other better then the Country would itself come together on its own merits. That's now happening on a lot of levels in our society... It's not happening in America. In most countries things have got worse.

It doesn't mean that everybody is living well with everyone else, but it does mean they're learning to respect each other. It's coming together.

Why do I feel good? When a man sets out to do something and feels that mission is being accomplished better than anywhere else. There's no other yardstick.

That's the problem people are having. Where else do you find a yardstick that is better than Bermuda? We have managed to do what no other country has been able to do in terms of race relations and a sharing of the pie.