Speaking at a G20 breakfast seminar organised by BBC News, she said an earlier recovery would depend on plans to restore banking lending. Official forecasts have been much more optimistic, suggesting that the world economic recovery could begin as soon as next year. The International Monetary Fund, for example, suggests that the world will grow by 1.5% to 2% in 2010 after declining by 0.5% to 1% this year.

DeAnne Julius' pessimistic outlook was shared by businessmen from G20 developing countries who took part in the seminar. Igor Kalashnikov, who runs a double glazing company in Russia, said business was down two and a half times and there was a climate of pessimism among the media and policy makers. And Nish Kotecha said that Indian start-up companies were finding it hard to get access to funding to expand their business.

Oktay Gokyildirim, who imports sweets into Turkey, said he has been badly affected by exchange rate fluctuations, but hoped that the G20 summit would give a boost to business and consumer confidence. Many experts and business leaders agreed that a key task of the G20 summit was to encourage free trade and avoid protectionism. But there was a fear that nationalism was re-emerging despite the rhetoric. Jim O'Neill spoke for many when he said that "words have to be matched by deeds" at the summit.

The G20 countries are Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the US and the EU.

Foreign Office minister Lord Malloch Brown said leaders could not get away with "empty promises" at the summit. Mr Brown has stressed the need to support developing countries amid fears that the global recession could push as many as 90 million more people into extreme poverty.

On Thursday, he said he would urge G20 leaders to agree a $100bn (£69bn) fund to underwrite world trade, which has fallen sharply in recent months. Speaking to the BBC, Mr Brown said countries had made great progress through joint action in recent months, spending about $2.5 trillion to boost demand in their economies. "Nobody could ever have imagined co-ordinated action on interest rates and stimuluses for the economy such as we have seen," he said.

"We have seen over the last few weeks and months how countries have taken action. Now we have to bring this together at the G20 meeting in London." Mr Brown, on the final leg of a three-continent trip ahead of next week's summit, said he was convinced world leaders would show in London they understood the need for decisive action.

Speaking in Brasília at a joint press conference with Gordon Brown, the UK prime minister, Mr Lula da Silva told reporters: "This crisis was caused by the irrational behaviour of white people with blue eyes, WHO BEFORE THE CRISIS APPEARED TO KNOW EVERYTHING AND NOW DEMONSTRATE THAT THEY KNOW NOTHING." He added: "I do not know any black or indigenous bankers so I can only say [it is wrong] that this part of mankind which is victimised more than any other should pay for the crisis."

Mr Brown appeared to distance himself from Mr Lula da Silva's remarks. "I'm not going to attribute blame to any individuals," he said. "I'm going to ask the G20 summit next week to support a global expansion of trade finance to reverse a slide in world trade," Mr Brown said.

Mr Lula da Silva also spoke out strongly against raising trade barriers in response to the global crisis. "I compare protectionism to a drug," he said. "Why do people use drugs? Because they are in crisis and they think the drug will help them. But its effects pass quickly." The two leaders' remarks demonstrate the desire each will have to secure the other's support during the G20 meeting.

The US has said a rocket launch would be "provocative" and violate UN Security Council resolutions. Japan's Defence Minister Yasukazu Hamada issued the orders to mobilise Japan's missile defence shield after a meeting with Prime Minister Taro Aso and cabinet ministers. "We will do our best to handle any flying object from North Korea in order to assure the Japanese people's safety and security," said Mr Hamada.

"A satellite or a missile - we are displeased with anything that is going to fly over our land, and such an action must be stopped." It is the first time that CONSTITUTIONALLY PACIFIST JAPAN has deployed the shield. The trajectory issued by Pyongyang show the rocket will pass over Japan, with the first booster stage landing in the sea to the west, the second in the Pacific Ocean to the east, says the BBC's Roland Buerk in Tokyo.

But the interception is only likely to be activated if the launch does not go as planned and debris appears to be falling towards Japan, says our correspondent. Japan revised its Self-Defence Forces Law in 2005, legalising possible interceptions of ballistic missiles. But the country's pacifist constitution does not allow it to intercept a missile if it is clearly heading elsewhere. The Japanese government had previously warned it would try to shoot down any missile or debris that threatens to hit its territory. NORTH KOREA HAS SAID IT WOULD REGARD ANY ROCKET INTERCEPT AS AN ACT OF WAR.

Pakistan has blamed India, saying it is withholding millions of cubic feet of water upstream in Indian-administered Kashmir and storing it in the massive Baglihar dam in order to produce hydro-electricity. Taking water out of the system is in breach of a 1960 treaty designed to administer water use in the region, Pakistan claims. Talks to resolve the issue have been put on hold following the Mumbai terror attacks in November, when tensions between the two countries increased.

Asif Ali Zardari, Pakistan's president, said: "The water crisis in Pakistan is directly linked to relations with India. Resolution could prevent an environmental catastrophe in South Asia, but failure to do so could fuel the fires of discontent that lead to extremism and terrorism."

EARLIER THIS MONTH THE UN WARNED THE WORLD MAY BE CLOSE TO ITS FIRST WATER WAR. "Water is linked to the crises of climate change, energy and food supplies and prices, and troubled financial markets," a report on the issue found. "Unless their links with water are addressed and water crises around the world are resolved, these other crises may intensify and local water crises may worsen, converging into a global water crisis and leading to political insecurity and conflict at various levels."

The dollar plunged instantly against the euro, yen, and sterling as the comments flashed across trading screens. David Bloom, currency chief at HSBC, said the apparent policy shift amounts to an earthquake in geo-finance. "The mere fact that the US Treasury Secretary is even entertaining thoughts that the dollar may cease being the anchor of the global monetary system has caused consternation," he said.

Mr Geithner later qualified his remarks, insisting that the dollar would remain the "world's dominant reserve currency… for a long period of time" but the seeds of doubt have been sown. The markets appear baffled by the confused statements emanating from Washington. President Barack Obama told a new conference hours earlier that there was no threat to the reserve status of the dollar. "I don't believe that there is a need for a global currency. The reason the dollar is strong right now is because investors consider the United States the strongest economy in the world with the most stable political system in the world," he said.

The Chinese proposal, outlined this week by central bank governor Zhou Xiaochuan, calls for a "super-sovereign reserve currency" under IMF management, turning the Fund into a sort of world central bank. The idea is that the IMF should activate its dormant powers to issue Special Drawing Rights. These SDRs would expand their role over time, becoming a "widely-accepted means of payments".

Last night it emerged that City workers were being advised to "dress down" next week to avoid drawing attention to themselves. More than 1,000 officials and diplomats are expected in the capital, including the leaders of the International Monetary Fund and the World Bank, for the G20 London Summit. Senior Whitehall sources warned yesterday to expect "WIDESPREAD DISRUPTION" WITH PARKS AND ROADS LIKELY TO BE CLOSED FOR MOST OF THE WEEK. Guidance from the Federation of Small Businesses, seen by The Daily Telegraph, advises employees in the City "to dress down and not draw attention to themselves".

Up to 40 armed convoys are expected to ferry diplomats and world leaders, including United States President Barack Obama, when they arrive in the UK from Tuesday. The next day campaigners will focus on institutions in the Square Mile in a series of annual April Fools' Day anti-globalisation and climate change demonstrations. Four columns of protesters are said to be planning to march on the Bank of England on Wednesday. TRAIN AND TUBE SERVICES ARE LIKELY TO BE DISRUPTED. Attention will then shift to the day long G20 summit on Thursday at the Excel conference centre in Docklands.

Police are fearing that protesters will resort to ingenious ways to cause maximum upheaval, such as blocking roads with piles of sand, and bringing children to play in them. More than 2,500 officers are expected to flood the capital in an operation costing up to £10 million, although the full cost of the summit could be nearer £50 million.

The watchdog claims it is responding to Government calls for action to combat rising teenage pregnancy. It would be the first time that pro and anti abortion services will be allowed to advertise. The move has been criticised by the church and pro-life groups.

Dr Peter Saunders, of the Christian Medical Fellowship, said: "THE PROBLEM IS THAT THE GOVERNMENT STRATEGY ON TEENAGE PREGNANCY, BASED ON CONDOMS, THE MORNING-AFTER PILL AND ABORTION, HAS FAILED. Allowing the advertising of abortion services is not dealing with the real problem."

But the Brook Advisory Centres, which give advice on contraception and abortion, said it was a step forward for sexual health. The new code would see further relaxation of rules for advertising condoms, except around programmes directed at children below the age of 10.

Clinton acknowledged the U.S. role in Mexico's vicious drug war as she arrived in Mexico for a two-day visit where she discussed U.S. plans to ramp up security on the border with President Felipe Calderon. A surge in drug gang killings to 6,300 last year and fears the violence could seep over the border has put Mexico's drug war high on President Barack Obama's agenda, after years of Mexico feeling that Washington was neglecting a joint problem.

"Our INSATIABLE DEMAND FOR ILLEGAL DRUGS FUELS THE DRUG TRADE. Our inability to prevent weapons from being illegally smuggled across the border to arm these criminals causes the death of police officers, soldiers and civilians," Clinton told reporters during her flight to Mexico City. "I feel very strongly we have a co-responsibility."

Clinton said the Obama administration strongly backed Mexico in its fight with the drug cartels and vowed the United States would try to speed up the transfer of drug-fighting equipment promised under a 2007 agreement.

After a long debate that went well into the night, the House of Representatives Budget Committee approved the blueprint along party lines 24-15 in response to the $3.55 trillion plan Obama submitted last month.

While Obama did not get everything he wanted, Democrats who control the committee included most of his priorities, including significant new investments in education and reforming the $2.5 trillion healthcare system to cover millions of uninsured Americans. Obama, speaking at an evening Democratic Party fund-raiser, challenged his opponents to present alternatives instead of just criticizing.

Schwarzenegger said he ordered the state facility known as Cal-Expo to be used for three months to serve the 125 tent city residents, some of them displaced by the economic recession. The encampment may be shut down within a month, said Sacramento Mayor Kevin Johnson. The move comes after the Sacramento City Council last night agreed to spend $880,000 to expand homeless programs.

"Together with the local government and volunteers, we are taking a first step to ensure the people living in tent city have a safe place to stay, with fresh water, healthy conditions and access to the services they need," Schwarzenegger said in a statement. "And I am committed to working with Mayor Johnson to find a permanent solution for those living in tent city." California, home to one of every eight Americans, has been particularly hard hit by the housing market collapse after many residents turned to exotic mortgages to afford homes.

The tent city, which has long existed along the banks of the America River, gained national attention last month when some of its recently homeless residents were featured on the Oprah Winfrey Show. The state has one of the highest rates of foreclosure, according to RealtyTrac Inc., an Irvine, California-based seller of real estate data. California home prices dropped 41 percent last month from a year earlier, more than double the U.S. decline, as surging foreclosures drove down values, the state Association of Realtors said today.

Fears are growing on the financial markets THAT BRITAIN MAY NOT BE ABLE TO REPAY THE BILLIONS OF POUNDS IN DEBT it is amassing to rescue banks and revive the economy. The Government admitted yesterday that, for the first time since 1995, investors had been unwilling to buy the full complement of its so-called gilt-edged bonds at one of its official auctions.

Gilts are the financial instrument it sells to investors to fund public spending. If future gilt sales are unsuccessful, it could be devastating for Gordon Brown because he might have to scale back his spending plans. The failure of yesterday's auction followed a warning from the Governor of the Bank of England on Tuesday that the country could not afford to introduce another fiscal stimulus package of spending rises and tax cuts.

Although some experts attributed the failure to confusion in the market, rather than concern over Britain's solvency, it was highly embarrassing for Mr Brown coming just days before world leaders are due to meet in London for the G20 summit to discuss the economic crisis. George Osborne, the shadow Chancellor, said: "The failed gilt auction, the first for many years, should be of real concern to everyone. It is too early to say, but THE RISK IS THAT AT SOME POINT THE GOVERNMENT WILL NOT BE ABLE TO FUND ITS HUGE DEBTS."

Mr Soros said his prediction meant he was better able to brace his Quantum investment fund against the global storm. But other investors failed to take notice of his prediction. His decision to come out of retirement in 2007 to manage the fund made him $2.9 billion. And while the financial crisis continued to deepen across the globe, THE 78-YEAR-OLD STILL MANAGED TO MAKE $1.1 BILLION LAST YEAR.

'It is, in a way, the culminating point of my life's work,' he told national newspaper The Australian. Soros is one of 25, top hedge fund managers from across Wall Street who have defied the credit crunch crisis to reap a total of $11.6 billion (£7.9 bn) last year. The managers made their profit by trading above the pain in the markets, according to Institutional Investor's Alpha Magazine.

At York Minster he said humanity should turn away from the selfishness and greed that leads it to ignore its interdependence with the natural world. And God would not guarantee a "happy ending", he warned. Dr Williams has often spoken out about environmental issues. Speaking on Wednesday he said just as God gave humans free will to do "immeasurable damage" to themselves as individuals it seemed "clear" they had the same "terrible freedom" as a human race.

"I think that to suggest that God might intervene to protect us from the corporate folly of our practices is as unchristian and unbiblical as to suggest that he protects us from the results of our individual folly or sin," he said. "God's faithfulness stands, assuring us that even in the most appalling disaster love will not let us go - but it will not be a safety net that guarantees a happy ending in this world."

Without a change of heart, Dr Williams warned, the world faced a number of "doomsday scenarios" including the "ultimate tragedy" of humanity gradually "choked, drowned, or starved by its own stupidity." The poorest and most vulnerable and our children and grandchildren would pay the heaviest price for climate change, he added.

Khadem al-Qubaisi really likes Mercedes. "I drive an SLR, and most of my other cars are also made by Daimler. Apart from a few BMWs and Porsche," said the chairman of investment company Aabar, which belings to the emirate of Abu Dhabi. That's part of the reason why his fund has just purchased a 9.1 percent stake in the Stuttgart-based automaker, he added.

Al-Qubaisi and Daimler CEO Dieter Zetsche were in high spirits as they explained the deal to the world at a news conference on Monday morning. The head of Aabar justified the investment by citing soft arguments rather than hard figures. Germany's car industry was fascinating, he said, and Daimler had an investment style that he liked. But he left no doubt that other industries had potential too, especially in Germany. "There are good companies, good technology and good managers here," said al-Qubaisi.

It's a view shared by many sovereign funds in the Middle East, and there are strong signs that Arab investors will become increasingly active in Germany and Central Europe in the near future. DESPITE THE FINANCIAL CRISIS, THEY HAVE AMPLE CASH. Besides, the stock value of major companies has nosedived and governments are so busy trying to rescue their economies that their RESISTANCE TO SUPPOSEDLY DANGEROUS FOREIGN INVESTORS HAS EVAPORATED.