Wednesday, September 21, 2011

Swan's gong. Here's Euromoney:

Finance minister of the year 2011: Swan confounds his domestic sceptics

Australia has struck it rich, and lucky, as it has used its natural resources to benefit from the China spending boom. But the careful stewardship of its treasurer, Wayne Swan, has played a key role in making it the best-performing economy among the world’s richer, developed nations. Not that he is likely to get much credit at home, as Eric Ellis reports.

BLESSED WITH, AND industriously exploiting, a natural resources bounty pointed at China that would embarrass Croesus, some Australians will find it strange that Euromoney has chosen their treasurer, Wayne Swan, as finance minister of the year.

The less charitable might even recall the words of Donald Horne, in his 1964 book The Lucky Country, which read: "Australia is a lucky country, run by second-rate people w ho share its luck."

Swan would probably be among the first to admit that he has indeed had some luck. But his work as treasurer is acknow ledged by Euromoney as much for what didn’t happen to Australia on his careful four-year watch – economic Armageddon in the trail of the 2007-08 subprime meltdown, which he confronted in his first year in office – as for what he positively did, positioning Australia to pow er through the new crisis looming from abroad.

"The fiscal rules that w e put in place to deal with the global recession when w e moved to stimulate the economy w ere ahead of the rest of the world," says Swan, in an interview from the kookaburra-chorused back verandah at his home in Brisbane.

"These were the sorts of rules that w ere ultimately adopted by the G20 in its summits through 2009, this whole notion that you needed an exit strategy. At the time we moved to stimulate, we put one in place and we’ve been applying it vigorously. It’s not happening anywhere else in the world."

As a result, Australia is one of only three OECD economies not to fall into recession since 2008, alongside Poland and South Korea. And it seems well placed to repeat the feat as the worsening euro crisis and US funk spread their infection. After two decades of grow th, Australia’s sustained expansion has been the most impressive performance of any member of the developed rich countries club.

That’s all very well, but is Swan a worthy recipient of the aw ard, in this era of booming Brics and roaring Tigers emerging to trump the sputtering west?

Former ANZ chief economist Saul Eslake of the University of Melbourne think-tank The Grattan Institute knows the 57-year-old Sw an well, and offers a qualified yes.

"Sw an is certainly after glory," says Eslake, "but for his party, not for himself. He’ll be thinking how this gong w ill improve Labor’s chances of winning the next election, seeing it in intensely political terms as will, of course, his political opponents."

That political capital might be useful, given that there’s every possibility that by the next time Euromoney considers the global field of finance ministers, Swan won’t be among them...

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