BrazilCrisis-stricken Beirut becomes world's third most expensive city
The sustained crises of Lebanon have seen the nation’s capital become one of the world’s most expensive places for migrant workers to live, according to a new report. The Middle Eastern hub rose more than 40 rungs on the latest Mercer Cost of Living City Ranking, behind only Central Asian city Ashgabat and Hong Kong.
Employers around the world have contended with pressures on their recruitment capabilities throughout the last decade. While looking to expand operations into various key regions, increased talent scarcity has seen firms continue to relocate staff in new cities and countries.
Understanding the cost of living in a broad sense, and in relation to the US dollar, allows organisations to better plan assignments and prepare their staff for life in a new home – something which global human capital consultancy Mercer looks to aid each year, with the release of its Cost of Living Survey.
Aimed at providing companies with an indication of the cost of living in various cities, the analysis is based on more than 200 goods and services analysed across 400 data points, covering everything from the cost of basic goods to rent and insurances. Historically, Asia has the most expensive regional destination, monopolising the top positions on Mercer’s ranking of the most expensive cities.
While this has continued to some extent this year, however, a series of crises have seen one locale from the Middle East storm into the upper-echelons of the list. Lebanon’s capital of Beirut climbed 42 positions to become the third most expensive city for expats in the world, as a result of the escalation of several seismic crises in the country.
Lebanon remains in a severe and extensive economic depression, after a controversial decision to peg the value of the Lebanese lira to the US dollar collapsed amid corruption allegations – but the country’s deepest financial crisis has also been exacerbated by the onset of Covid-19 and the Port of Beirut explosion in 2020.
As a result of the economic meltdown, and the loss of confidence in the local system, the local currency has devalued more than nine times against the dollar. As the country is largely dependent on imports for everyday live, it has become extremely expensive to live in Beirut in 2021. It still sits behind Hong Kong – last year’s number one – and the capital of Turkmenistan, though.
Ashgabat, a city of about one million people, was ranked second most expensive city in 2020, but the Central Asian city has risen to top spot this year.Most of the cities in Mercer's top 10 are business hubs where economic growth has led to a hike in the price of housing and other living costs. However, like Beirut, Ashgabat sadly owes its high ranking to economic woes rather than prosperity.
Known for its autocratic government and large gas reserves, Turkmenistan has been grappling with a long-running economic crisis that has plunged many citizens into poverty. A global slump in energy prices in 2014 pushed up inflation and food prices, with the high inflation of the city continue to cost residents dearly.
In September last year, a report by Human Rights Watch (HRW) said the Covid-19 pandemic had seen shortages of subsidised food worsen, citing cases of “people waiting hours in line to try to buy more affordable food products, often being turned away empty-handed.”
In spite of this, according to the BBC, Turkmenistan's government is unwilling to publicly acknowledge any such crisis, and has instead commenced a major expansion of Ashgabat. Commenting on the plans, which broke ground in May, long-time President Gurbanguly Berdymukhamedov pledged to turn the capital into “one of the most prosperous cities in the world.”
In contrast to this, many of the oil-rich autocracies of the Middle East have sought to diversify their economies in recent years, helping decrease living costs in the process. With the United Arab Emirates’ continued economic modernisation, it has reduced the impact of the oil industry on GDP, enabling negative price movement in both Dubai and Abu Dhabi. The cities moved down the list by 19 and 17 places respectively, to both rank outside the 40 most expensive cities for expats.
