ALL AROUND US there seems to be a growing consensus that a global recession is around the corner. In Barbados, everything continues as normal with very little being said officially to suggestthat we are in any danger.

Nonetheless, this is the time to be cautious in financial affairs. In 1944 during World War 11, 730 delegates from 44 allied countries met in crisis at Bretton Woods to develop the financial relationship between the world's largest economies.

One of their creations, the World Bank, is now convinced that the global economy will significantly slow down in 2009. In June, it was forecasting global growth to increase by three per cent in 2009, but it has now lowered it to 1.0 per cent.

In addition, it expects the economies of developed markets like the United States, Western Europe, and Japan to do the worst and shrink by 0.1 per cent next year. It is more optimistic about emerging markets like Brazil, China, and Eastern Europe,but is dramatically lowering its 2009 forecasts from 6.4 to 4.5 per cent

The World Bank is so worried that it has set aside US$100 billion to lend to troubled countries over the next three years. There is ample justification for such pessimismas the one per cent overall global growth rate predicted could be a seismic problem for the world economy.

The slowdown is of such concern that today's equivalent of Bretton Woods, the Group of 20 (G20), recently met in Washington to come up with a unified strategy to prevent the global financialcrisis from worsening. It achieved little more than hot air.

The G20 is comprised of the world's major developed and emerging economies: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, United Kingdom, and the United States.

During last week's summit, the G20 pledged to "aggressively battle the global recession by agreeing not to pass new restrictions on global trade, improve regulatory supervision of banks, implement stricter accounting standards and employ oversight of the derivatives markets, and synchronise tax cuts, lower interest rates, and spending initiatives.

After the meeting, the G20 said that against the background of deteriorating economic conditions worldwide, a broader policy response was needed, based on closer macroeconomic cooperation, "to restore growth, avoid negative spillovers and support emerging market economiesand developing countries".

Given such bland responses, there are no obvious solutions. The global economy is in pretty bad shape and is expected to get even worse. One thing is clear: governments of the G20 cannot rewrite history and override normal business cycles. Government intervention, even on a global scale, never works.

The International Labour Organisation also expects the global slowdown to cause an additional 20 million people to become unemployed before the end of 2009. As it stands now, economic answers are blowing in the wind.