Ashgabat in Turkmenistan has been ranked the world’s most expensive city for expats, according to a 2021 survey by American asset management firm Mercer. Jenny Southan reports

With digital nomadism on the rise, it’s interesting to learn which of the world’s cities are the most – and least – expensive for expats.

Mercer’s annual Cost of Living Survey, which takes into consideration more than 200 expenses including housing, transportation, entertainment, food and household bills, has revealed that, out of 209 cities, Ashgabat in Turkmenistan (pictured above) is the most costly.

In second place last year, Ashgabat found its way to first place this year due to ongoing food shortages and hyperinflation, according to Mercer.

The former Soviet country of Turkmenistan has a a highly controlled population of more than six million people (Ashgabat is home to one million), ruled by President Gurbanguly Berdimuhamedow, who enforces strict restrictions on press freedom. The country is also suffering from an extended economic crisis meaning many citizens are living in poverty.

According to BBC journalist Abdujalil Abdurasulov, that doesn’t paint the whole picture. He says: “There is also another Ashgabat – a glitzy capital full of marble buildings. This is the image that state propaganda tries to project in order to convince everyone that Turkmenistan is one of the most prosperous nations in the world.

“Meanwhile, foreign companies have to boost this image if they want to enter the market. For energy giants, they are attracted by one of the largest gas reserves in the world.”

What about the other cities in the ranking?

Beirut shot up to third place (from 45th last year) due to “political turmoil” and “severe economic depression”. Among the top ten were three Swiss cities (Zurich, Geneva and Bern), in addition to two Chinese cities – Shanghai and Beijing. Tokyo, Singapore and Hong Kong also featured.

Beyond the top ten most expensive cities, New York was ranked 14th in terms of cost of living, London was ranked 18th, Los Angeles 20th, Paris 33rd, Dubai 42nd and Melbourne 59th. Mumbai is the most expensive city in India in joint 78th place.

Mercer says that cities in the US have dropped in this year’s ranking mostly due to currency fluctuations between March 2020 and March 2021, despite the rising inflation of goods and services in the country.

Meanwhile the Canadian dollar has appreciated in value in relation to the USD, triggering jumps in this year’s ranking. Vancouver (93) is the most expensive Canadian city in 2021, followed by Toronto (98) and Montreal (129). Ranking 156, Ottawa is the least expensive city in Canada.

In South America, Port of Spain (91) ranked as the most expensive city, followed by Port-au-Prince (92) and Pointe-à-Pitre (107).

World’s most expensive cities 2021

  1. Ashgabat (Turkmenistan)
  2. Hong Kong
  3. Beirut (Lebanon)
  4. Tokyo (Japan)
  5. Zurich (Switzerland)
  6. Shanghai (China)
  7. Singapore
  8. Geneva (Switzerland)
  9. Beijing (China)
  10. Bern (Switzerland)

In terms of the cheapest cities in the world for international employees, Bishkek in Kyrgyzstan has the lowest cost of living in 209th place, while Lusaka in Zambia, Tbilisi in Georgia, Tunis in Tunisa and Brasilia in Brasil were similarly affordable.

Rio de Janeiro stood out as a good option from digital nomads, coming it at 191, in addition to Cape Town (178) and Budapest (162).

World’s cheapest cities 2021

  1. Bishkek (Kyrgyzstan)
  2. Lusaka (Zambia)
  3. Tbilisi (Georgia)
  4. Tunis (Tunisia)
  5. Brasilia (Brazil)
  6. Windhoek (Namibia)
  7. Tashkent (Uzbekistan)
  8. Gaborone (Botswana)
  9. Karachi (Pakistan)
  10. Banjul (Gambia)

What does cost of living mean for expats?

According to Mercer, “mobility is evolving from traditional long-term assignments – such as relocating an employee for a few years then repatriating them to their home location – to other kinds of mobility moves such as short-term assignees, international foreign hires, permanent transferees, commuters, international remote workers and international freelancers”.

Ilya Bonic, career president and head of Mercer strategy, says: “Cost of living has always been a factor for international mobility planning, but the pandemic has added a whole new layer of complexity, as well as long-term implications related to health and safety of employees, remote working and flexibility policies, among other considerations.

“As organisations rethink their talent and mobility strategies, accurate and transparent data is essential to compensate employees fairly for all types of assignments.”

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