World’s Poorest or Most Expensive City?

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LUANDA, Angola — Despite being one of he world’s poorest cities, Luanda in Angola is also the word’s most expensive city, according to Mercer’s annual Cost of Living Survey. It’s followed by N’Djamen, the capitol of Chad, and Hong Kong.

While still rebuilding its economy after a 27-year civil war that ended in 2002 and that killed around 300,000 of its citizens, destroyed the infrastructure and almost completely destroyed the agriculture, Angola imports around three quarters of the consumable goods it needs, according to Reuters. This importing a necessary thing, as land mines and poor roads has made it difficult to establish a strong economy.

However, heavy import tariffs combined with high taxes and monopolies in the market have led to sky-high prices. “Absolutely everything has to be imported,” said Karen Neal, the head of the commercial team at the British Embassy in Luanda, “and that means using an import agent licensed by the Ministry of Commerce. These agents have a monopoly and it’s a closed shop. The costs of deposits, fees and tariffs are non-negotiable because there is no competition.”

Adding to this is the recent oil boom the country has seen, thus attracting foreign workers into the city and driving up prices. Enjoying $15.3 billion in international oil reserves, Angola is the second largest exporter of oil on the African continent, but suffers from the fact that a majority of the wealth is in the Cabinda province of Angola. Cabinda is the location of a decades-long separatist conflict. “While Luanda and N’Djamen are relatively inexpensive cities,” said Ed Hannibal, a partner and global leader for Mercer’s Mobility, “they are quite costly for expatriates, since imported goods come at a premium.”

He added that it also made finding secure living quarters would be costly. A one-bedroom apartment costs around $7,500 a month to rent. Pizza is $16. Produce like tomatoes go for around $7.33 per pound, while luxuries like gym memberships cost $5,000 a year. “For many years we had nothing here,” said Ana Cristiana Pinto, a native Angolan, “No supermarkets, no shopping mall, no cinema. Suddenly, since the war ended and the oil began to flow, we are seeing things we have only read about or seen in foreign shops. People earn good money and they want these things. Often they don’t look at the price.” However, prices like that means that only foreign workers and wealthy Angolans can purchase top-scale items. A banker might make around $8,000 per month; however, their driver or maid may only make around $500 per month, depending on their boss’ generosity.

The Mercer survey addresses around 211 cities on five continents and compares the cost of around 200 items in each city, including but not limited to housing, transportation, food, clothing, household goods and entertainment. Currently, the top 10 costly cities includes Singapore; Zurich, Germany; Geneva; Tokyo; Bern, Switzerland; Moscow and Shanghai, China.

According to Mercer, many of the Western European cities rose in their ranking partly due to the strength of local currency compared to the dollar, while the Japanese cities dropped due to the weakened state of the yen. Recently, Angola gave monetary aid to Portugal, the former colonial leader of Angola. Currently, Portugal is experiencing mounting debt with its economy shrinking a little more each year.

Monica Newell

Sources: The Daily Mail, CNBC, BBC News, CNN, The Wire
Photo: Hotel Presidente Luanda

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Monica Newell

Monica is a BORGEN Magazine writer based in Midlothian, Virginia.

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