Karachi Among Cheapest Cities for Expats

Pakistan's financial capital Karachi shows up among the least expensive cities for expatriates in a survey conducted by consulting firm Mercer UK. Cost of living for employees is one of the factors considered by businesses looking to expand globally.

There are several large cities in Pakistan, but Karachi is the largest with a population exceeds 12 million, according to the United Nations. Whilst the political capital of Pakistan is Islamabad, Karachi is definitely the economic center. It is home to the largest port in Pakistan situated in a sheltered natural harbor, and it is this which originally provided the conditions for the city to grow. Whilst the port continues to play an important part in economy of Karachi, the economy has diversified. Karachi is the location for the headquarters for many of the largest Pakistani companies, as well as being the location for the Pakistani offices of many international firms. Manufacturing plays a big part in the local economy, and increasingly outsourcing of services from richer countries plays a part, particularly with call centers. Pakistan has been ranked at number 20 on the 2009 A.T. Kearney Global Services Location Index of the most attractive outsourcing destinations in the world. All of these factors combine to result in Karachi having what has been claimed to be the highest average wage of any city in south Asia. However, despite the regionally high wages, Karachi is still located in south Asia, and so many of the prices for goods and services reflect this. In addition, the excellent infrastructure links to the world further reduce the price of imported goods. These high wages, coupled with low prices of goods and services, result in Karachi being among the cheapest major cities in the world in which to live, not necessarily for the local residents, but certainly for the expatriates earning in hard currency.

Here are Mercer's picks for the least expensive cities of the world in 2009:

1. Johannesburg, South Africa
2. Monterrey, Mexico
3. Asuncion, Paraguay
4. Karachi, Pakistan
5. Wellington, New Zealand
6. Auckland, New Zealand
7. Mexico City, Mexico
8. Quito, Ecuador
9. Chennai, India
10.Tunis, Tunisia

The survey covers 143 cities across six continents but concentrates mostly on Europe, Asia, and the Middle East. The only countries in the Americas covered were Canada, Mexico, Brazil, and the U.S. Mercer looks at more than 200 factors, including the cost of housing, transport and food.

Tokyo, last year’s second most expensive city, climbed to the top spot, knocking Moscow down to number 3. Geneva and Hong Kong ranked 4th and 5th, with Asian and European cities dominating the top 10 slots.

The survey, conducted in March, uses New York as the base city for the index, with currency moves measured against the dollar. New York itself jumped to 8th from 22nd last year.

“As a direct impact of the economic downturn over the last year, we have observed significant fluctuations in most of the world’s currencies, which have had a profound impact on this year’s rankings,” Nathalie Constantin-Metral, a senior researcher at Mercer, said in a statement on the firm’s website.

“Now that cost containment and reduction is at the top of most company agendas, keeping track of the change in factors that dictate expatriate cost of living is essential,” she added.

Tel Aviv ranked as the most expensive city in the Middle East, while Caracas was top in South America, and Sydney was the priciest city for expatriates in the Pacific.

Following are the top 10 most expensive cities, according to the Mercer survey. Last year’s rankings in brackets:

1. Tokyo, Japan (2)
2. Osaka, Japan (11)
3. Moscow, Russia (1)
4. Geneva, Switzerland (8)
5. Hong Kong, China (6)
6. Zurich, Switzerland (9)
7. Copenhagen, Denmark (7)
8. New York City, USA (22)
9. Beijing, China (20)
10.Singapore, Singapore (13)

Related Links:

Eleven Days in Karachi

AT Kearney Global Services Location Index

Outsourcing to Pakistan

Power Shortages in Pakistan

Garbage Collection in Karachi

Pakistan's Electricity Crisis

Karachi: The Urban Frontier

Emaar Bullish on Pakistan

Karachi Dreams Big

Cost of Power Outages in India


Unknown said…
This is very cute blog.The picture Karachi in this very lovely.It is please to see the lots of information here in your blog.Shangrila Murree
Expat said…
Great information related to expat and really Karachi is very cheap for the expats.
Mayraj said…
Phoenix, Arizona; Austin, Texas; Charlotte, North Carolina; Portland, Oregon and Minneapolis-St Paul in the Twin Cities Region of Minnesota are cities that a developing country city should have sister relations with. They are all leading American cities for performance. San Francisco has a had an innovative culture which has usually then been adopted in other cities also.

For instance the San Francisco mayor has been term limited to two terms since the 1950s. Now that is the California norm across the state and applies to state positions as well. Term limits have spread nationwide.

I should also say that non-partisan elections have also spread nationwide and also have shown positive results in Latin America where they also have term limits. Under the new system in Pakistan along with integrated local system you have council-manager system, non-partisan elections and term limits. This is really the most evolved system any South Asian nation has ever had. It is something I never expected to see in Pakistan, let alone in my lifetime.

Austin is a green capital of US along with Portland. San Francisco is also green oriented.

Phoenix and Charlotte are council-manager cities; which is also the formula that Karachi has. The council manager form is the dominated local government local formula in US now, generally. Amongst the largest cities mayor-council formula is dominant;but, that doesn't mean some of the largest cities do not have council-manager systems.

I did an article in 2005 about this:

Here is some info about Phoenix:


Creating a Culture of Innovation:

10 Lessons from America’s Best Run City


Phoenix City Manager to Retire
Karachi is the trade capital of Pakistan. It is the biggest Industrial City in the country. 70% of the national economy depends on Karachi. It has the advantage of sea port which is used for the import and export of goods. It ranks 20 out of 143 cities of the world for the most attractive outsourcing destination.
Riaz Haq said…
Here are some excerpts from a BBC report on violence in Karachi:

According to human rights organisations, 775 people died in political and sectarian shootings and bomb attacks in Karachi in 2010. ...
And although thousands are killed every year in the north-west, the impact of the violence in Karachi is arguably no less important. The city is Pakistan's commercial hub.
Business losses
Karachi provides 70% of the total annual tax revenue collected by the government.
The violence has been largely fuelled by antagonism between the local chapters of three political parties: the Pakistan People's Party (PPP), the mostly Pashtun Awami National Party (ANP) and the Muttahida Quami Movement (MQM).
The MQM remains Karachi's dominant political party and represents the city's majority Urdu-speaking community - the descendants of Muslim migrants to India at the time of partition in 1947.

In December 2010, Sindh Home Minister Zulfiqar Mirza accused the MQM of being mainly responsible for the extortion and targeted killings prevalent across the city.

Within 48 hours, an enraged MQM withdrew its support for the PPP-led coalition in Islamabad.

The only reason the government could hold onto power was because opposition parties did not bring a no-confidence motion against the government.

The MQM has since been coaxed back into the coalition and now holds the political balance.

However, tensions remain with the ANP and the PPP.
In Karachi, all three parties have been involved in stoking ethnic passions.
Thousands were arrested; many were were later killed in what human rights organisations and the Pakistan media said were staged killings by security forces.

The MQM fought back - and was held responsible for a number of murders of police and security officials

The party said it was targeted by a conservative security establishment for its liberal politics and for fighting for the rights of the Urdu-speaking community.

Things changed under the government of President Pervez Musharraf and the party now enjoys excellent relations with the establishment.

"The MQM's 'new deal' with the establishment is that its control of Karachi will remain unchallenged by the security establishment," a political analyst, who wished to remain unnamed, told the BBC.

"In return, the MQM will support the establishment's policies in the centre."

MQM insiders acknowledge this deal, although they insist the party will never vote for "anything against the spirit of its ideology".

Obviously, this deal stands as long as the MQM controls Karachi.

But since 2006, the party has been increasingly feeling the pressure exerted by the growth of the Pashtun community in the city.
Activists of the Labour Party Pakistan in Karachi in march 2011 Karachi is home to a bewildering number of political parties and campaigning groups

Arriving here in their thousands, the Pashtun newcomers are in competition for land and jobs with the Urdu-speaking community.

MQM leaders say these new arrivals must not be treated as long-term inhabitants of the city - a call at odds with its identity as a party of migrants.

They say that there is a link between the growth of the Pashtun community and the "Talibanisation" of parts of the city - the Taliban is predominantly made up of Pashtun people.

The MQM say they will resist this at all costs, and this bellicosity has led to violence which has claimed dozens of lives.

Some of it has also involved separate turf battles between Karachi's Baloch community - the original inhabitants of the city - and the MQM.

"It's a complex political and ethnic problem which needs to be handled with extreme care," says a local human rights activist.
Riaz Haq said…
With a world cost of living index (wcol) of just 46 relative to 100 for New York City, Karachi is the cheapest city among 131 cities in the world, according to a survey reported by Economic Intelligence Unit today.


Here's a WSJ report on it:

Moving to Singapore? Start saving: The city-state is one of most expensive cities in the world – 42% more expensive than New York – topping London, Frankfurt and Hong Kong.

The Southeast Asian city joins Tokyo, Osaka and Kobe as one of the world’s top ten most expensive cities, according to the Economist Intelligence Unit’s annual cost-of-living survey, increasingly proving that Asian cities are no longer just a cheaper outpost for expats and multinationals. Though a European city – Zurich – is still the world’s most expensive, Tokyo was the runner up, with Singapore now listed as the world’s 9th most expensive city. Singapore was listed as the 6th most expensive last year, but remarkably was ranked 97th in 2001.

The survey uses prices of goods and services such as food, transportation, housing, utilities, private schools and domestic help to calculate scores for each city, using New York as its base with a score of 100. Zurich and Tokyo scored 170 and 166, respectively, indicating that they are about 70% and 66% more expensive to live in than New York.

Australian cites, too, were well-represented on the list by Sydney (No. 7) and Melbourne (No. 8, though at least it can claim it makes up for the cost in livability). While Japan has long been known as an expensive place to live — Tokyo’s gas prices are 71% higher than New York’s — the emergence of Australia and Singapore on the list is a more recent phenomenon.

Singapore’s rise is notable, since less than a decade ago it was considered a cheap city by Western standards. Just last year, a kilo of bread would have cost US$2.86, according to the Economist’s data, but now costs US$3.19 – an 11% increase from the year before.

The rise of home prices and basic goods in the city-state has for years been a sticking point for many disgruntled Singaporeans, many of whom say government policies to allow more rich expatriates to move to the city has helped push up the cost of living. In recent months, the government has put in place various cooling measures to address high property prices, which are slowly coming down.

Jon Copestake, editor of the survey, cited exchange-rate movement as “the main driver of cost-of-living growth in Singapore, relative to other cities.” The Australian cities rose for the same reason: The Australian dollar rose sharply in value last year, which helped push its two biggest cities up the charts.

Asia is also home to the world’s cheapest places to live, particularly in South Asia. Karachi, Pakistan, came in 131st out of 131 cities, with a score of 46. This makes it three times cheaper than Singapore. Also in the bottom 10: Mumbai; New Delhi; Kathmandu, Nepal; and Dhaka, Bangladesh. India and Pakistan’s cheap labor and land costs are making the area “attractive to those bargain-hungry visitors or investors willing to brave some of the security risks that accompany such low prices,” the survey said.

Riaz Haq said…
#Karachi, #Mumbai, #Delhi among cheapest major world cities to live in. #India #Pakistan

http://pull.db-gmresearch.com/cgi-bin/pull/DocPull/13432-2381/99524599/DB_RandomWalk_2015-04-14_0900b8c0898020b1.pdf …

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