Dubai: It's time to pack up and head to Karachi. Abu Dhabi now ranks as the Middle East's most expensive city with Karachi being the cheapest in the world for expatriates, according to a Mercer Consulting survey released Tuesday.
Abu Dhabi ranked 50th and Dubai 55th in the Cost of Living Survey 2010 for expats in 214 cities worldwide, according to the human resources consulting firm.
"While the cost of living has remained relatively stable across the GCC, we are seeing that accommodation costs have continued to decrease in Abu Dhabi and Dubai, driving down the cost of living for expats," said Dr Markus Wiesner, head of Mercer's Dubai office. "In contrast, we noted in places like Jeddah increased demand for expat accommodation has pushed costs up."
You definitely don't want to go shopping in Luanda, Angola, which is ranked the world's most expensive city.
Indeed for the first time, the list of the world's most expensive cities includes three in Africa with Luanda in first place, Ndjamena, Chad, third, and Libreville, Gabon, seventh. Wiesner said this reflected the growing economic importance of the region to global companies across all business sectors.
Cost of imports
The cost of imports and expatriate accommodation contributes to the high cost in African countries, along with the fact that some of their currencies are pegged to the euro.
"The cost of international goods and expatriate standard accommodation in some African cities can be very expensive due to the limited supply," explained Wiesner.
"A number of African countries such as Chad or Gabon use the XOF [West African franc] and the XAF [Central African franc], which is pegged to the euro. As the euro has gained value against the US dollar..., it has been an additional factor that has made those cities even more costly."
The rest of the top ten list was dominated by European cities like Moscow and Geneva and Asian cities such as Tokyo and Hong Kong.
Tokyo was ranked the most expensive city for expatriate executives in another survey by London-based ECA International.
Currency rates
The survey showed the importance of exchange rates for expatriates and their salary calculations, as companies sending their employees abroad give them allowances to maintain a certain standard of living.
"In the past couple of years, corporate assignments have become truly global, with expatriates and ‘global assignees' being transferred across the world. However, global mobility is still an expensive undertaking for companies, so selection of the right candidates and a real understanding of the costs involved in relocating staff to other countries are essential especially in today's economic environment," Wiesner said.
The Mercer survey measures the comparative cost of over 200 items in each location, including housing, transport, food and clothing. All cities are compared against New York as the base city. Currency movements are measured against the US dollar. The cost of housing often the biggest expense for expats plays an important part in determining the ranking of cities.
