General fiction: Wizards of Oz surf into fiction's front rank

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As midsummer approaches, what better moment to celebrate a magnificent year for the nation's fiction? Australian fiction, that is. The passion and prowess of novels from Australia published in Britain in 2008 routed every mouldy cliché. In The Lost Dog (Chatto & Windus, £16.99), Sri Lankan-born Michelle de Kretser turned her agile wit and scintillating prose to chic Melbourne and a watchful Asian migrant's progress. Awesomely smart, but with a big and generous heart, The Lost Dog still only reached the Man Booker long-list. De Kretser's compatriot Steve Toltz made it to the last round. His unruly debut A Fraction of the Whole (Hamish Hamilton, £17.99) nonetheless announced the arrival of a heavyweight talent nimble enough to roll up a father-son saga, exuberant satire and Shandy-esque narrative fireworks into a captivating extravaganza.

With its surfing backdrop and adolescent rite-of-passage theme, Tim Winton's Breath (Picador, £14.99) might have stuck closer to a standard notion of the Oz plot. Still, the focus and fury of the telling marked a writer on the crest of his wave. At the other end of the beach, stylistically, Alexis Wright wrapped the tragedies of Aboriginal history with the still-unsettled fate of the settlers who caused them in Carpentaria (Constable, £16.99). Brimming with energy and fantasy, it pulls you across the myths, dreams and records of a troubled past. In a smaller frame, Helen Garner's The Spare Room (Canongate, £12.99) examined with a cool eye and assured voice the effects of mortal illness on a friendship and the lives it linked: bleak, beautiful, Beckett-like.

Back in Blighty, many writers seemed to take a holiday from today's reality – a short break, one hopes – in order to make far-from-nostalgic trips into the recent past. In Crusaders (Faber, £8.99), Richard T Kelly used Newcastle politics on the eve of the New Labour landslide as the action and ideas-packed stage for a chronicle of change. Lovingly rooted in 1970s and 1980s Sheffield, Philip Hensher's The Northern Clemency (Fourth Estate, £17.99) effectively reclaimed a lost genre of politically astute, richly decorated provincial family saga for modern readers.

Linda Grant's compact and resonant The Clothes on their Backs (Virago, £14.99), like Hensher's novel a Booker shortlistee, revisited not only the threadbare 1970s but the wartime trauma that ghosted the conflicts of that devil's decade. Hanif Kureishi's under-rated Something To Tell You (Faber, £14.99) offered not merely startling snapshots along one pleasure-seeking psychoanalyst's route from suburban youth to the divorced – but far from despairing – drift of inner-city middle age. Frank and funny, it also tried to tell a much rarer British history of desire. In the hazy borders between fiction, poetic documentary and memoir, Gordon Burn forged one the year's most audacious works in Born Yesterday: the news as a novel (Faber, £7.99). It views the bizarre events of 2007 as a surreal shared psycho-drama: missing children, vanishing PMs, looming dread.

James Kelman equalled his best work in Kieron Smith, Boy (Hamish Hamilton, £18.99): a Scottish childhood gloriously captured on every level of language, feeling and context. David Park's The Truth Commissioner (Bloomsbury, £14.99) was an unfashionably subtle and shaded story of the aftermath to the Northern Irish Troubles. Also from Ireland, but more visible, Sebastian Barry's The Secret Scripture (Faber, £14.99) missed the Booker by a whisker and showcased a talent for melding public life and private heartache.

Further afield, in the killing grounds of Afghanistan, Nadeem Aslam's The Wasted Vigil (Faber, £16.99) found beauty as well as terror in a polyphonic novel of locals and incomers caught in the history-woven web of war. From the Caribbean, Jacob Ross wrought a sumptuous first novel of a fragile young life during the birth pangs of a tiny, vulnerable nation – Grenada – in Pynter Bender (Fourth Estate, £15.99).

As for this year's Booker laureate, Aravind Adiga might in hindsight look a little fortunate. All the same, his victorious debut The White Tiger (Atlantic, £12.99) delivers a swift-flowing, sharply observed and fiercely comic response to India's boom: one tycoon's account of the human cost of rags-to-riches. Adiga could be classified as the anti-Rushdie, cleansing florid exotica from the fiction of India. Yet Salman Rushdie himself showed how much fun the master can still conjure for his fans in The Enchantress of Florence (Jonathan Cape, £18.99). Spanning Machiavelli's Renaissance Florence and Akbar the Great's Mughal India, it braids love, magic and the storyteller's teasing art into a yarn as rich as any he has spun.

Rushdie-esque in its sweep and swagger, The Collector of Worlds by Iliya Troyanov (trans. William Hobson; Faber, £16.99) followed that polymathic Victorian rogue Sir Richard Burton to Egypt and East Africa as well as India: a lavish biographical fiction that gave pulsing new life to the devious old dog. The landmark novel of the year, however, emerged not from India but China in the year of Olympic spectacle and world-shaking economic clout. Beijing Coma by Ma Jian (trans. Flora Drew; Chatto & Windus, £17.99) blended epic recent history, close-focus reportage and wrenching human drama to show how the defeat of the Tiananmen Square protests in 1989 helped to wipe out a nation's memory and clear the ground for an amnesiac superpower.

From Africa, the interlinked stories of Uwem Akpan's Say You're One of Them (Abacus, £11.99) told – with grace, gravity and humanity – tales of children's survival and growth against the steepest odds. The Latin American novel of the year came from Colombia: The Informers by Juan Gabriel Vásquez (trans. Anne McLean; Bloomsbury, £15.99) linked the post-traumatic sorrow of Bogota today to a wartime history of spies and lies: a moral landscape drawn in shades of Le Carré grey.

Back in Europe, a British shame inspired a masterly French novel. With a focus on the Heysel Stadium disaster of 1985 and its aftermath for victims and hooligans alike, In the Crowd by Laurent Mauvignier (trans. Shaun Whiteside; Faber, £12.99) explored not just the roots of football violence but the yearning for community – from Liverpool to Turin – that both makes and mars Europe. Further north, in A Blessed Child (trans. Sarah Death; Picador, £14.99), Linn Ullmann depicted with a tender rage not just the last crisis of a Swedish patriarch but the tormented underside of a smug society.

And so to the US, where – in a year when voters embraced the outside world again – much memorable fiction came from outsiders looking in. Joseph O'Neill bound an offbeat American tale – of cricket in New York – to European destinies in Netherland (Fourth Estate, £14.99): a well-timed, finely crafted riposte to isolationism. With the Pulitzer-winning The Brief Wondrous Life of Oscar Wao (Faber, £12.99), Junot Díaz – from the Dominican Republic by way of New Jersey – amply confirmed the promise of his stories in a comic, moving and verbally dazzling debut novel of homelands lost and found. Alaa Al Aswany's Chicago (trans. Farouk Abdel Wahab; Fourth Estate, £14.99) turned his yarn-spinning gifts to a story of Egyptian medics and students in the Windy City: dwellers by Lake Michigan haunted by the Nile. In The Lazarus Project (Picador, £14.99), the Sarajevo-raised Chicagoan Aleksandar Hemon matched a Bosnian's coming-to-America story with a reverse journey into Europe's dark past: heavy matters, juggled with a delicate touch. And Zoë Heller trained her beady expat eye on liberal idealism and domestic strife in a Manhattan clan with The Believers (Fig Tree, £16.99).

Among the home-grown giants of American letters, Marilynne Robinson again sculpted her Bible-cadenced prose into an exquisitely written story of dogma, doubt and family in the Midwest, Home (Virago, £14.99). Toni Morrison in A Mercy (Chatto & Windus, £16.99) returned to the late 17th century to dramatise – with a soaring lyricism – a shared legacy of servitude and struggle that unites poor blacks and whites. Read it for Inauguration Day.