Herald Tribune

For expats, costly Asia is cheapest place to live

Agence France-Presse

WEDNESDAY, AUGUST 3, 2005

SINGAPORE : Asia has become more expensive for expatriates because of inflation and stronger regional currencies, but its average cost of living remains lower than in other parts of the world, according to a survey released Tuesday.

ECA International, a human resources professional organization, said in an annual cost-of-living survey that inflation rates in Asia were three times as high as those in the euro zone and twice that of the United States.

The recent revaluations of the yuan and ringgit have also bolstered the cost indices for China and Malaysia by 1.8 percent and 1 percent respectively, ECA International said.

Its survey covered 250 locations worldwide and measured the cost of living for expatriates by using a basket of 125 goods and services, including groceries, alcohol and tobacco, clothing, electrical goods, cars and restaurant meals.

The roster of Asia's 10 most expensive cities was dominated by Japan and northern Asia, but Dili, the capital of the young republic of East Timor, was ranked a surprising eighth, above Singapore and Beijing. Most goods needed by expatriates in Dili are imported.

"The cost of living in Dili for anybody who wishes to follow an international pattern of consumption is higher than it would be in Singapore," said Lee Quane, ECA's general manager, who is based in Hong Kong.

"In Singapore, a very cosmopolitan country, most goods and services are very readily available."

Dhaka is the cheapest place in Asia, followed by Manila, Ho Chi Minh City, Bangalore, Islamabad and Vientiane, Laos. The most expensive are Tokyo, Yokohama, Kobe, Seoul, Macao and Hong Kong.

Tokyo is second to Oslo globally and is more expensive than London, Paris, Seoul, New York and Sydney.

The expatriate cost of living in Seoul rose 20 percent from last year, the biggest increase among Asian cities, mainly because of the strength of the South Korean won, ECA International said.

"Indian locations and Taipei have shown a similar trend with strengthening currencies driving up the prices of goods and services," it said.

"Within China, the cost of living in the second-tier cities is increasing faster than elsewhere, closing the gap between them and the principal centers of economic growth."

ECA said the expatriate cost of living in second-tier Chinese cities is now only 25 percent lower on average than Beijing, Guangzhou and Shanghai, compared with 30 percent in 2004.

Jakarta and Dhaka were the only cities where the cost of living for expatriates has decreased over the past year.

Despite higher costs, Asian cities have remained cheaper compared with many parts of the world, the survey showed. For example, Singapore is Asia's ninth most expensive city for expatriates, but ranks 114th worldwide. Hong Kong is in sixth place in Asia and in 83rd place in the global index.