Most expensive developing country cities for expats and aid workers

As the rise of emerging donors and the constant shift of development activities from the “global north” to the “global south” continue to change the international development landscape, international development practitioners are increasingly finding themselves posted in developing countries as well. From multinational companies focused on mining, petroleum and manufacturing establishing branches in emerging markets, to the establishment of multilateral institutions in developing nations — such as the Asian Infrastructure Investment Bank and the BRICS’ New Development Bank — living and working in developing country cities is fast-becoming a facet of globalization. While traditional global cities like New York, London and Hong Kong continue to be the hub of international trade and development, African and Asian cities like Luanda, Angola and Shanghai are grabbing headlines not only because of their fast-growing economies but also their rising profile as some of the most expensive developing country cities to work and live in. What are some of the most expensive cities in the developing world for expatriates and development professionals? Devex compares the cost of living surveys released by international consulting firms ECA International and Mercer to find out. The data used in this report is based on several sources, including the Central Intelligence Agency Factbook and Brookings Institution’s 2014 Global Metro Monitor for the city population, the World Bank for the gross national income per capita in 2014, and Numbeo, a crowdsourcing website for urban cost of living, to measure standard prices in living costs, using a one-bedroom apartment as a benchmark. Luanda Country: Angola Population: 5,288,000 GNI per capita: $7,150 The Angolan capital has been making headlines the past few years as the world’s most expensive city for expatriates and international development workers — an ironic tag to a country where over a third of its population live in extreme poverty. The skyrocketing prices of goods and services in the African nation are well-documented. According to Numbeo, rental fees for a one-bedroom apartment in Luanda is estimated at $3,500 per month — almost $500 more than the same piece of real estate in New York. The influx of multinational oil companies with international staff to the oil-rich nation — it is believed that the country has over 13 billion barrels of proven oil reserves — as well as the devastating effects of over three decades of civil war has affected the standard of living in the Angolan capital. Heavy reliance on imported goods is driving up prices as well. While it can be argued that some commodities can be purchased at a cheaper price somewhere else in the city (as can be the case in some Chinese cities), the cost of living of an international staffer working in the more affluent parts of Luanda can also be significantly higher. Juba Country: South Sudan Population: 307,000 GNI per capita: $2,030 The capital of the youngest African nation, South Sudan, also proves the theory that a country — or a city’s — economic strength is not the only indicator for the rising cost of living for expatriates and development professionals working there. Established only in 2011, South Sudan is considered as one of the oil-rich countries in the African continent. And similar to Luanda, Juba’s cost of living has been pushed to dizzying heights by the influx of multinational oil companies as well as the arrival of aid workers tending to humanitarian activities brought about by the decadeslong conflict with the country’s northern counterpart. Rent for a one-bedroom apartment in Juba amounts to $2,500 per month. “The difficulty of importing international standard goods to a country which has seen significant fighting over the last year pushes up the price of the goods available for the expatriates in the country,” Steven Kilfedder, manager of Cost of Living and Remuneration Services of ECA International, said. Kinshasa Country: Democratic Republic of the Congo Population: 11,116,000 GNI per capita: $700 Kinshasa, the capital of Africa’s second-largest nation by land area, is gaining in profile not just as a development hub but also as a pricey destination for expatriates and aid workers. Despite more than 60 percent of the country’s population living under extreme poverty, the cost of living in the nation’s capital remains high. Rental for a one-bedroom apartment in Kinshasa ($1,033) costs more than what a regular citizen can earn in a year. Several factors have contributed to this situation, including the lingering effects of political instability and conflict. While bilateral and multilateral support has boosted infrastructure investments in the African nation, analysis by the African Development Bank suggests economic growth has not been inclusive. The country faces “episodic and recurrent resurgence of political and security tensions that are sources of vulnerability,” leading to socio-economic and political fragility. N’Djamena Country: Chad Population: 1,212,000 GNI per capita: $2,130 Chad’s capital city, N’Djamena, is steadily becoming one of the most expensive cities for expats and development workers in the world. Monthly dues for a one-bedroom apartment in this Central African city amount to $845.26 — almost twice as much as in the capital cities of other emerging countries such as Bangkok (Thailand) and Manila (the Philippines). Experts suggest that while developing country cities like N’Djamena are “relatively inexpensive cities,” the cost of living for expatriates and international employees are so high because imported goods — which expats usually prefer — come at a premium. This is on top of several demands on secure living conditions, which can come at a hefty price. Country strategies from AfDB have shown remarkable potential for the country but have fallen short the past few years given the “difficult security environment” including recurrent conflicts that “have led to a situation of instability.” Chinese cities It is not surprising that cities from China, Asia’s economic behemoth and emerging power, have dominated the most expensive cities for expats and development professionals for developing nations in the region. Unlike emerging cities in the African region where the high cost of living is driven in large part by the influx of multinational companies looking to leverage the continent’s natural resources, or aid workers involved in development or humanitarian projects, Chinese cities have been expanding on the back of resilient domestic economic growth. According to the World Bank, the country’s GNI per capita has grown more than 13 times to $13,130 over the past 24 years — and this is expected to continue growing at an exponential rate. City: Shanghai Population: 24,683,400 Rent for a one-bedroom apartment: $991.88 China’s financial center, Shanghai, trumps all other cities in the country when it comes to cost of living. The likely home of BRICS’ New Development Bank headquarters, Shanghai had a GNI per capita of $24,065 in 2014, according to Brookings Institution. City: Beijing Population: 21,639,100 Rent for a one-bedroom apartment: $1,045.36 The GNI per capita in China’s capital city, Beijing, reached $23,390 in 2014 — $10,000 more than the national average. As with Shanghai, Beijing is expected to gain prominence as an international development hub as it plays host to the headquarters of AIIB, which is slated to start operations early next year. City: Shenzhen Population: 10,768,400 Rent for a one-bedroom apartment: $1,041.07 Shenzhen’s proximity to Hong Kong has helped it become one of China’s most robust trading hubs — and one of the most expensive cities to live in for expats. According to data from the Brookings Institution, GNI per capita in Shenzhen in 2014 is $20,000 higher than the national average. The city is known more for the large number of multinational corporations that have set up shop there than for development organizations. But expats in the city have suggested in online forums that the steadily rising cost of living in Shenzhen might affect its competitiveness. City: Guangzhou Population: 13,106,300 Rent for a one-bedroom apartment: $753.96 Guangzhou is one of China’s most prosperous urban centers, with a sprawling port and thriving business community and numerous tourist attractions. But the city’s rise to prominence has also increased its cost of living. Guangzhou’s GNI per capita in 2014 amounted to $29,014, more than twice the national average. As in Shenzhen, experts suggest Guangzhou’s rising cost of living is mainly due to the “increasing income, rising inflation and the appreciation” of the country’s currency. 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