KL more affordable for expats now

Written by Emily Tan

Monday, 05 July 2010 00:00

Mercer's Worldwide Cost of Living Survey 2010 shows that Kuala Lumpur has grown considerably more affordable for expatriates over the past year.

The survey, which was released on June 29, ranks Kuala Lumpur at No 138. Last year, it ranked No 96.
In Southeast Asia, Singapore remains the region's most expensive city at 11, followed by Jakarta at 94, and Hanoi and Bangkok both at 121.

The top 10 most expensive cities included three Asian cities: Tokyo (2), Osaka (6) and Hong Kong (8). This year the survey includes seven Chinese cities, highlighting the increased commercial importance of locations other than Hong Kong, Beijing (16) and Shanghai (25).

The survey was conducted in the weeks leading up to March and covers 214 cities across five continents. It measures the comparative cost of over 200 items in each location including housing, transport, food and entertainment. It is used to help multinational firms and governments determine compensation allowances for expatriate employees.

For the first time, three African cities are among the world's top 10 most expensive cities: Luanda (1) in Angola, Ndjamena (3) in Chad and Libreville (7) in Gabon.

"African cities now figure prominently, reflecting the growing economic importance of the region to global companies across all business sectors," says Nathalie Constantin-Métral, a senior researcher at Mercer responsible for compiling the rankings each year. The cities included in the survey were selected based on requests from multinational clients, she said in a June 29 statement.

Although many assume that cities in the developing world are cheap, this is not necessarily true for expatriates working there because,  to entice talented staff to these cities, multinationals must provide the same standard of living and benefits that these employees and their families would experience at home, points out Constantin- Métral. "In some African cities, the cost of this can be extraordinarily high — particularly the cost of good, secure accommodation," she adds.

In the US, the weakening of the US dollar against a number of other currencies has made American cities more affordable for expatriates, says Constantin- Métral. New York at 27 is the most expensive city in the US, followed by Los Angeles (55) and Washington (111).

This article appeared in Management@work, the monthly management pullout of The Edge Malaysia, Issue 813, Jul 5-11, 2010.