It would be hard to believe, and yet it is a truth that is recorded and validated by the latest edition of Mercer’s 2020 Cost of Living Survey which ranks 209 cities around the world.
Tunis ranked as the least expensive city in the world for expatriates. It ranked 209th preceded by Windhoek, capital of Namibia (208), Tashkent, capital of Uzbekistan and Bishkek, capital of Kyrgyzstan, which are tied for 206th place.
An overwhelming majority of Tunisians would find this ranking implausible, amid an inflation rate of around 6% and a mercurial climate deemed out of reach by large sections and strata of society.
However, it is true at the same time that for foreigners who are in Tunisia for missions, business or even for tourism and pleasure, the situation is seen differently.
Indeed, everyday consumer products are mostly subsidized and the national currency, the Dinar, weighs very little in front of the dollar that increases costs for expatriates in American cities, according to Mercer or the euro and much more the Japanese yen, all in a country 40 minutes as the crow flies from Europe, where whatever one says, it is good to live.
At the other end of the spectrum, according to Mercer’s 2020 cost-of-living survey, Hong Kong is the most expensive city for expatriates, followed by Ashgabat in Turkmenistan in second place.
Tokyo and Zurich remain in third and fourth place respectively, while Singapore is in fifth place, down two places from last year. New York is sixth, moving up from ninth place.
Mercer data was collected in March; price differentials in many locations were not significant due to the COVID-19 pandemic.
Other cities in Mercer’s top 10 most expensive cities for expatriates are Shanghai (7), Bern (8), Geneva (9) and Beijing (10).
The coronavirus again!
Mercer’s widely recognized survey is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation strategies for their expatriate employees. New York City is used as the base city for all comparisons and currency movements are measured against the US dollar.
The survey includes over 400 cities throughout the world; this year’s ranking includes 209 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.
“Border closings, flight interruptions, mandatory confinements, and other short-term disruptions have affected not only the cost of goods and services, but also the quality of living of assignees,” said Ilya Bonic, Career President and Head of Mercer Strategy.
“Climate change, issues related to environmental footprint, and health system challenges have pushed multinationals to consider how a city’s efforts around sustainability can impact the living conditions for their expatriate workers. Cities with a strong sustainability focus can greatly improve living standards, which can in turn improve employee well-being and engagement.”
Properly vetting locations and compensating employees on international assignments is as important as it can be costly. Mercer’s survey shows that costs of goods and services shift with inflation and currency volatility making overseas assignment costs sometimes greater and sometimes smaller.
“Sudden changes to exchange rates has been mainly driven by the impact COVID-19 is having on the global economy,” said Yvonne Traber, Global Mobility Product Solutions Leader at Mercer.
“This volatility can affect mobile employees in a variety of ways, from shortages and price adjustments for goods and services, to supply chain disruptions or when employees are paid in home country currency and need to exchange funds into the host country for local purchases.”