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Academic views on current business issues
07 Feb 2012 Posted by: Chris Gale
People protest following the removal of fuel subsidy by the Government in Lagos ,Nigeria. Photo: AP
People protest following the removal of fuel subsidy by the Government in Lagos ,Nigeria. Photo: AP
I was recently working in (External) Nigeria . On the way there, my flight was delayed because of a general strike in that country. Eventually, I arrived on Monday evening (a day later) and was greeted with the good news that the strike was over.
The impact of unexpected timing on big changes
The reason for it was that the Nigerian Government had reduced a subsidy it pays on the price of petrol with the effect that prices more than doubled overnight. A reduction of the subsidy had been expected, but it had been anticipated that it would be delayed for a while or phased in over a period of time. But it had happened without warning and overnight on January 1 2012.
Government and unions at odds
The compromise which ended the strike still saw prices at 50% above their December 2011 level, but at considerably less than the price last week. Neither side seems to see this as the end of the matter with the Government wanting to reduce the subsidy further again so that it can use the money saved on ‘social’ programmes and the unions wanting the price to go back to its 2011 level. (External) The unions claimed that the majority of the poor were unable to sustain the price rise and its knock on effects on other consumer prices.
Compromise is the best solution
This debate will continue long after I have left Nigeria I am sure and will, I hope, end in a sensible compromise – not the change of regime hinted at by some on the union side or the control of the streets by the army as hinted at by the Government’s supporters. What it did bring home to me is the need for good communication in labour relations. In a situation such as last week’s in Nigeria, everyone was hit by the strike and the economy will have suffered. It is much better to try to work a compromise whilst it is ‘business as usual’ and there is some money to talk about.
Communication is key in labour relations
The key to this must be communication – if the Government had been clearer about its intentions, organised labour may not have felt cornered as it did, leaving it to reach in the only way it saw available to it, however potentially destructive. It felt it had no voice. In the back of my mind are the similarities with labour relations in the United Kingdom in the 1980s – too many entrenched political positions and not enough communication.
Public spending cuts in the UK
As disputes increase in 2012 in the UK as (External) public spending cuts bite further and other tensions increase because of the economic situation, I do hope we can remember the value of communication itself and having lines of communication open….and I hope the Nigerians see the end of the strike not as a weakness but a strength and an opportunity for real negotiation.
What do you think we can learn from overseas situations like this?
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Posted by
Chris Gale
on Tuesday, February 7, 2012 at 11:48 am
Filed under
Business economics
,
Crisis management
,
Finance
,
General
· Tagged with
communication
,
economic situation
,
labour relations
,
Nigeria
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