Government leaders that take unpopular decisions in the short term to bring long-term benefits to the economy are the most deserving of our praise.

The Banker’s awards to finance ministers and central bank governors are designed to recognise the taking of tough decisions in the face of adversity. Many of those decisions will be unpopular in the domestic environment – cutting spending to balance a budget or raising interest rates to slow down a boom are rarely popular. But they are almost certainly the right decisions in the longer term. 

The big dilemma for government leaders is whether they endure unpopularity for the long-term good of the country – or take the easy way out by doing what most people prefer, knowing they will probably be out of office by the time the economy deteriorates. The Banker’s awards recognise the former approach.

We are not saying in making an award that everything in a particular country is wonderful. All we are saying is that the challenge is tough and that the course is right.

Frequently we get feedback from nationals who say they don’t find the local situation so wonderful and ask how we can justify the award. This was the case this year when Liberia's Amara Konneh was awarded finance minister for 2014 for Africa. One reader emailed to say that Liberia has the worst economy in Africa with people living in hardship. The Monrovian radio station Truth FM asked me searching questions about how the award was made.

For sure we did not consult or talk to anyone in the finance ministry or any other part of the government before reaching our decision. We relied solely on independent analysts and the regional knowledge of our editors.

The facts are that Liberia is starting out from a low base with an unfortunate history of civil wars that were only settled in 2003. Current economic output is at the same level as in 1989 when the conflict started. But slowly things are moving in the right direction with 8.3% growth notched up in 2012.

Mr Konneh, who became finance minister in 2012, has focused on improving security, upgrading infrastructure and attracting outside investment. ArcelorMittal has responded by investing $1bn in iron ore production. Such measures lay down the basis for long-term growth but do not make people feel better immediately. A more populist strategy would be to spend on food and energy subsidies. But sooner or later the money would have run out and Liberia would be back to square one.

This is not just a Liberian problem. In the UK, the chancellor of the exchequer (finance minister) George Osborne has spent the past few years tackling the hole in the government’s finances yet his efforts have not raised living standards. He is trailing the opposition in the opinion polls as a result.

Ireland endured one of the worst recessions in Europe after the financial crisis, with high unemployment, higher taxes, spending cuts and a property bust. It is doubtful whether many Irish voters feel particularly positive about their government. But The Banker also awarded Ireland’s finance minister Michael Noonan as the best in Europe for his efforts in bringing about Ireland’s exit from the International Monetary Fund/EU support programme and re-entering the capital markets. Most economists would concur with our decision.

We trust that in five years' time the economies in Liberia and Ireland will have improved enough such that even the locals think that we got it right.

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