Wiki says Luanda, Angola is the most expensive city in the world for foreigners, but does not relate why.
Why would this unimpressive city be so expensive to live in?
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From [25]
"Recent world events, including economic and political upheavals, which resulted in currency fluctuations, cost inflation for goods and services, and volatility in accommodation prices have impacted these cities making them expensive,” said Barb Marder, Senior Partner and Mercer’s Global Mobility Practice Leader. “Despite being one of Africa’s major oil producers, Angola is a relatively poor country yet expensive for expatriates since imported goods can be costly. In addition, finding secure living accommodations that meet the standards of expatriates can be challenging and quite costly.”
Because it’s in the middle of nowhere, internationally, and it’s an oil boom town, so petro companies are actually willing to pay the ridiculously inflated prices on behalf of their employees, for the scarce imported goods and decent accommodations - rapid growth has meant there isn’t enough of either to go around, so it’s a seller’s market on both fronts.
This is probably about the kind of money you have to spend to sustain a lifestyle you’ve come to expect if you have been living in the industrialized world for some time (indoor plumbing, electricity, air conditioning etc.). If you are prepared to live like the majority of the local population, life could be a lot cheaper.
The ranking appears to be based on the Mercer Cost-of-Living Survey. I always found theirs and similar methodology dubious. Essentially, they’re asking how much it costs to live a thoroughly westernized upper-class lifestyle. It bears no relation whatsoever to the real cost of living as measured by how locals or well-integrated foreigners live. All this result means is that “luxury three-bedroom houses” and hamburgers and blue jeans are expensive in Luanda. No shit. One survey listed Tokyo as one of the most expensive city to go out because steak and vodka are expensive. Here’s the thing, no one here in their right mind has steak and vodka when they go out. Restaurants in Tokyo are actually very reasonably priced compared to other first-world cities.
However, I can tell by their Tokyo numbers that the results are crap even for the lifestyle they suppose. Blue jeans for $169.13 in Tokyo? You can get a nice pair for $20 at Uniqlo. $6.98 for a cup of coffee? WTF. Yes, coffee is a bit expensive but drip coffee is still only $2.50 in major chains such as Doutor. $3.05 for 1 litre of milk? $2 or less at an supermarket. “Purchases at medium-priced establishments.” Yeah, right.
Luanda was once one of the most advanced cities in Africa (in the days of the Portuguese Empire). But then they had 30+ years of civil war that destroyed much of it. The artisan class left, and so, everything has to be imported. add to that, there are now no land links with anywhere (except a road from Namibia (which is a country of 3 million); the old Luanda-Mozambique RR line was destroyed.
So, quite understandable-lots of money (from the offshore oil), and no local manufacture=costly place to live.
It seems paradoxical but countries too poor to develop a tourist industry can be expensive for tourists! They lack customers and wherewithal to build low-cost hotels for tourists, but may have a high-priced hotel for official visitors. To live “like a native” may be extremely inconvenient (or in some cases even illegal) for a tourist.
And, as jovan implies, some price surveys are misleading. The U.N. schedule for salary adjustment included (last I looked) prices of Marlboro and Johnny Black rather than local cigarettes and whiskey.
I wonder if there’s a concept of a gap to be bridged, and that’s what costs you money.
For example, nobody’s going to realistically claim that living in say… Kansas City is more expensive than living in London, just because living a “proper” English lifestyle with Fuller’s ESB, Galaxy chocolate and back bacon is more expensive there- the local equivalents are equivalent in both quality and safety. The Brit in question can drink Boulevard and eat Hershey bars and streaky bacon without any drop in real quality. (perceived is a different story)
However, the difference between London and Luanda may be that there isn’t some local equivalent that’s actually equivalent, so the assumption is that the good or service in question has to be imported at extra cost. For example, the westerner may not want homebrewed sorghum beer, or whatever funky local things are the equivalent of chocolate and bacon, nor may those be safe to eat for him, so the Western equivalents are imported.
Yeah, I’ve always felt the same. I guess it has utility for some sort of business person, and if you’re getting posted abroad, it may help in negotiating a better salary or cost-of-living expenses for yourself. But Moscow is always in the top four or five of these lists, often at number one (this year it’s number two), and the three times I’ve been there, I’ve found it quite cheap. If you’re paying $8.29 for a cup of coffee, as the article states (it phrases it as “A cup of coffee in Moscow can cost $8.29 compared to $1.54 in Managua, Nicaragua”) you’re doing something wrong.
The only time we paid insane prices was something like $7 for a glass of orange juice at one of the more Western hotels. As soon as you step out into the “real” Moscow, the prices are about what you might expect from a large, Eastern European city. A half liter of beer is about $2.50-$3. The subway’s about a buck. A pound loaf of bread is about 60 cents. Dinners out at mid-level local restaurants were maybe $15-$20 per person. My former roommate who has been living there since 1998 paid $300-$400/month for his flat the first few years (before he got married and moved out). Hell, even if you want to stay “Western,” the coffee at McDonald’s is less than two bucks, so I don’t know where this $8.29 coffee is coming from. I have no doubt it “can” cost you that much, but I wouldn’t doubt that I could find a $15 cup of coffee here in Chicago if I look hard enough.
The expense of living “like a westerner” in a place like Luanda also almost certainly includes having your own backup electricity and water supply, private garbage collection, and security, since those are not provided municipally. A Londoner moving to Kansas City would need none of those (I assume - I’ve never been to Kansas City.)
Well, sure, but Luanda is different from Tokyo. How many “well-integrated” foreigners are there in Luanda compared with Tokyo? Many westerners move to Tokyo to actually live there; hardly any move to Luanda. The vast majority of westerners in Luanda are on temporary assignments hoping to live a “thoroughly westernized lifestyle.”
Having been to Luanda, it’s a pretty good estimation. The main cost is accommodation. A very basic western-standard one bedroom apartment would be at least $3000 a month. Sure you can pay less, but you’re going to have to shit in the bushes.
Exactly; that high cost includes a toilet and septic system in Luanda, while in Kansas City (to keep using my example), the septic system wouldn’t be on the bill, and the toilet might not either.
The difference in quality between British style back bacon and American style bacon is very real. Back bacon has much more lean meat in it, and much less fat. Streaky bacon, somewhat like what Americans consider to be “regular” bacon (though still usually a bit more meaty), is available in Britain, but is cheaper than, and considered much inferior to, back bacon. By contrast, if Kansas city is like southern California in this respect, bacon approaching the quality of British back will be effectively unobtainable. (Although once, in a diner in San Luis Obispo, CA, I was, to my surprise and delight, served with bacon that, although not at the level of British back, had a considerably higher ratio of meat to fat than is standard in California. I wish I knew where they got it.)
I entirely agree with your larger point, however (although I think a Dove would be be a much closer equivalent to a Galaxy than a Hershey Bar would).
I’ll grant you that there is a very real difference between a place like Luanda and Tokyo, but my point still stands that the ranking is meaningless because it completely fails to take into account the inevitable changes in lifestyle you will have to make. Mercer even had to make a concession for Luanda because they couldn’t find a place that served a hamburger and replaced that item with a sandwich. Add to that the fact that they’re pulling prices out of their asses, and you have a near-meaningless ranking. A better strategy would be a proper survey of foreign residents comparing their actual living expenses, but of course that’s a lot more trouble.
Angola has a boomtown economy. As a Californian, I grew up on stories of how the shopkeepers were the ones who really benefited from the gold rush, as they sold goods at massively inflated prices to miners with a lot of easy cash in their pockets and few other options for spending it. It’s the same thing. When you’ve got a lot of people coming in, making a lot of money, and craving comforts, you can make tons.
Added to that is that secure and comfortable housing stock is in short supply (and, if it is like many countries, probably controlled by a single group) and you’ve got a recipe for massively price increased. There is probably little motivation to build more housing stock, as nobody knows how long the boom will be booming, so people just inflate the hell out of what there is,
Of course, imported goods are always expensive, but between tariffs and distance, prices in parts of Africa can get absurd. I could never get over seeing a box of four generic brand popsicles for sale in Cameroon for US $20.00- in a country where half the population makes less than a dollar a day (and I made about three dollars a day.) The one sushi restaurant in the capital would get their fish off a special cooler in the daily Air France flight from Paris. It really is quite a hassle getting stuff out there.
It is more like what visitors do visit the country are either government officials or on business, in both cases there is little pressure for lower cost accommodations so the hoteliers can get away with outrageous prices.
Also foreigners brought in by large companies often have housing allowances(or hotel allowances), even food and private school allowances for their children paid for by their employer or the employer directly pays the providers of the services.
This also encourages outlandish prices to be charged, ditto the fact that there is usually a small market catering to these foreign workers.
As luck would have it, I caught a segment of PRI’s The World that details the reasons a couple days ago:
the-top-two-priciest-cities-for-americans-living-abroad - SoundCloud
It’s the housing. Really worth a listen if you’re reading this thread.
That is not the purpose of the survey. They are examining the cost for ex pats, people who will be in the foreign county for a few years and then leave.
People who are local hires will have learned how to live considerably cheaper.
Where the sloppiness comes are news reports which portray this as anything but what it is intended, as a measure of what it costs to send senior level managers and allow them to have a Western lifestyle.
It’s more a difference of opinion than a difference in quality- it’s like saying that Czech beer is higher quality than English beer, which isn’t the case, because they’re two different styles- one group is primarily pale lagers, while the other is a range of ales.
You may like one or the other, but they’re both high quality.
(and for the record, I REALLY like British bacon, but find it pretty hard to find here)