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The High Cost of Living
October 27, 2010 8:09 AM   Subscribe

A question about an inexplicably inaccurate website. Luanda, Angola: world's most expensive city!?

This isn't really all that important, but it's bugging me. Check out this website:

http://www.finfacts.ie/costofliving.htm

"Luanda...is the world’s most expensive city for expatriates...Tokyo is in second position, with Ndjamena in Chad in third place."

This makes absolutely no sense to me. I'm wondering if this is some sort of weird automated web site that somehow mixed up the world's most and least expensive cities and put them in one list.

Any thoughts?
posted by crazylegs to Travel & Transportation (11 answers total)
 
Oil driven economy. I've never been to Luanda, but I've been to Baku - and yes it is crazy what an expat lifestyle costs there relative to local incomes. Flipside is living like a local is very very cheap if not very comfortable.
posted by JPD at 8:11 AM on October 27, 2010


Often, living in a developing country with a lifestyle based on industrialized-country standards is incredibly expensive, because importing basically anything is very, very pricey.
posted by Tomorrowful at 8:14 AM on October 27, 2010


How are you coming to the conclusion that Luanda cannot be the world's most expensive city? Remember that the cost of living for ex-pats is not driven by local poverty, but local wealth -- the greater the divide between rich and poor, the more expensive things will be for people who want to live more like the rich than the poor.
posted by endless_forms at 8:15 AM on October 27, 2010


OOOHHH, I get it. When they say "expatriate," they mean living like an American in Africa. Thanks for the clarification.
posted by crazylegs at 8:17 AM on October 27, 2010


the greater the divide between rich and poor, the more expensive things will be for people who want to live more like the rich than the poor.


I don't think this is correct. Look at cost of living data for places like India which have massive divides in wealth, but don't have the distorting effect of sudden influxes of resource investment.
posted by JPD at 8:18 AM on October 27, 2010


Housekeepers, security, gun-toting drivers, bulletproof transports, butlers, fencing, enormous houses. Life in Angola as an expat is very expensive, which is why the expat salaries are high. I vaguely know a guy in his early thirties and his wife working out there for an oil company and, for serious, some of the anecdotes I've heard about their lifestyle sounded like Gone with the Wind with AK47s.
posted by Happy Dave at 8:37 AM on October 27, 2010


In general, it's very expensive to buy a safe, comfortable lifestyle in a fairly violent area.
posted by kataclysm at 9:12 AM on October 27, 2010


The company that compiles these numbers, Mercer, specifically sells these figures (or ones like them) to Western companies that want to relocate employees internationally. From the above link:
To encourage mobility and to manage your international assignment costs, you need precise information to calculate fair, consistent expatriate compensation packages. ... Mercer’s cost-of-living indices are designed for today’s multinational companies that transfer employees to and from a multitude of countries. Our unique international basket of goods and services is the result of extensive research of actual expatriate spending habits, allowing our indices to reflect actual international spending patterns.
posted by Johnny Assay at 9:13 AM on October 27, 2010


Tomorrowful has it right

Most of Africa is far more expensive than India etc

Why?

Its not perceived to be as big or lucrative market like India or china so there really isn't much export or focus from companies and thus the high costs. For example, Renault doesn't sell cars in Africa, they sell to dealers who then export them to Africa or people buy second hand. (South Africa is different in many of these regards for historical reasons but still VERY expensive). When importers bring in products they are going to mark up their margins, import duties tend to be high and many financial tools we take for granted are priced high due to the "risk" so its often called the Africa price

Add in the fact that you want electricity, running water, internet access and what have you and you're going pay for diesel generators, water pumps and the cost of bandwidth is sky high if available.

Africa is very expensive to live in any kind of lifestyle that's not local and even then. From this interesting blogpost by an expat housewife in Nairobi, Kenya:

Necessities I'm afraid...:

* 1) Cars - they are comparatively very expensive due to import taxes. People prefer to by big 4x4s just because the roads are crazy here and you are more likely to survive in one than a Toyota Corolla.
* 2) School fees – ouch. Think UK Private school costs and you are paying from aged 2 onwards.
* 3) A mortgage (13% - 15% interest charged as explained above) – and houses in Nairobi are up to a level with UK property prices now.
* 4) Rent – shooting up all the time.
* 5) Security – you do need to pay for night security plus backup response units, whether it is via firm or by your own arrangement with employees, but it’s expensive.
* 6) Members of household staff. You might rather put this in the luxury category but they more people you employ the better as it means cash filters down to those who most need it.
* 7) Drinking Water (you can’t just drink it out of the tap). You will spend a fortune on this every year. Plus it’s not uncommon to get water delivered in a truck as the mains supply is often unreliable.
* 8) Local flights (no ‘Easy Jet’ in Africa so hopper flights for weekends away are hundreds of pounds a throw).
* 9) A work permit costs a couple of thousand pounds and you need one of those to be able to live here – it must be renewed every two years.
* 10) Imported food. All taxed so horribly expensive – unless you work for the UN and have a pass for their ‘duty free’ supermarket.
* 11) Electricity – this has just doubled in the past year.
* 12) Going to visit family – this usually involves a long haul flight.
* 13) Health insurance (no state healthcare)

posted by The Lady is a designer at 9:17 AM on October 27, 2010 [1 favorite]


A friend of mine is an American expat in Luanda.

His company pays for: security, a company apartment with full electric backup, broadband internet access, cell phone and satellite access, chauffeur, chef, and emergency medical care.

Add all of those ancillary expenses up, and Luanda is a rather expensive place for an expat looking to live by Western standards.
posted by dfriedman at 9:39 AM on October 27, 2010


Members of my family in Ghana will actually stock up on lentils and household salt when they visit Pakistan, or even the UAE, because prices are so much higher in Accra.
posted by bardophile at 10:02 AM on October 27, 2010


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