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2009-09-28

Swan shoots at his foot by relying on what G20 says generally

Comments on Michael Stutchbury “Will Wayne plan pass the IMF test?”, 28/09/2009, http://www.theaustralian.news.com.au/story/0,25197,26133477-5017771,00.html

It will be interesting to see how much those countries will adhere to their pledges to let the IMF to prescribe economic policies for those individual countries. But I doubt that will ever work for any of the large countries in the group.

Swan and Rudd may backfire if they rely too much on what the G20 is prescribing now as a matter of principle for the group as a whole but not necessarily applicable to every individual country.

Australia is very different from all other developed countries in the group. As a result, the policy positions should naturally be different too. But the government does not admit this on political grounds.

It appears that both are choosing what is good for them at the moment, but there will be a day of reckoning ahead when they will have to contradict what is prescribed as the medicine for a general situation.

I personally don’t place too much trust on Swan’s reliance on what the G20 is saying now, although I stand ready for correction if I am proven to be wrong.

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