Saturday, June 22, 2024


Dhaka Tribune

OP-ED: Is Dhaka an expensive city for expats?

Dhaka is not an expensive place to live. It is an expensive place to live if you want to live like you are in New York

Update : 04 Jul 2021, 12:12 AM

Dhaka is listed as being one of the most expensive cities in the world for foreign workers to live in.

It is even claimed that it is the most expensive in South Asia.

This causes a certain amount of head-scratching.

For a while Dhaka is indeed a large city, while Bangladesh is getting richer at an astonishingly quick rate, it is still true that both the city and the country are not expensive places to live.

For they are not rich places and the two do go together.

The answer to the confusion is to understand where the survey, the information, is coming from, why it is being collated even.

It is from a company called Mercer who are trying to provide guidance to companies who are going to send their staff off to work in another place.

The importance here is that it is not, at all, measuring the cost of living in a place.

It is measuring the cost of living in a certain style in a place.

Roughly, and approximately – for all such surveys are rough and approximate – they are trying to measure “How much does it cost to provide a living standard like New York?”

After all, if we are trying to measure how much it costs to live we've got to have some standard of living that we are trying to measure.

Some places will be expensive by these standards simply because they are, well, they are expensive.

Berne in Switzerland is expensive because it is one of two countries (Norway is the other) with agricultural support systems even more insane than those of the European Union.

Food prices are sky high as a result.

Hong Kong is expensive because of property prices.

And places that have a welcome absence of such specific expense factors, but which are about as rich as New York, cost about the same as New York.

For this is what a place being rich means.

That there are about the same things available in terms of living space, entertainments, foodstuffs and so on.

Being rich is to have access to these things, a rich place has such access because that's what being rich means.

This is built into our very concepts of Gross Domestic Product, it is equal to all incomes, or all production, or all consumption.

A place can only be rich if it has all those things available for consumption.

That does not explain why somewhere like Dhaka should be expensive.

It is, after all, possible to live a very fine life there without requiring a New York style income.

But that is where the comparison to the New York lifestyle becomes important.

For what is being measured is, as above, what does it cost to live like someone would in New York.

To be silly about it, the price of an opera, or ballet, performance in Dhaka is infinite.

There really are people who consider access to such arts one of the very points of living in New York (or London, Paris and so on.)

The price is infinite simply because the things do not exist.

Or to be less silly and more accurate, the price of good Scotch whisky or bacon, are rather higher in a Muslim country than they will be in New York.

None of those four are directly included in the price comparison being made, they are just examples of the logic.

To live well in Dhaka is not, by international standards, expensive.

To live like New York in Dhaka is expensive, because there are many things that are either unavailable, or imported only in small quantities and are thus expensive.

There are also things that are markedly cheaper in Dhaka – it is very much cheaper to be able to hire a servant, a driver, or an amah, than it is in New York.

But because such personal service is not part of the comparison – it is not part of a normal New York lifestyle – then that is not reflected in the comparative prices.

This is, for me, more than just a paper exercise.

I lived for years in Moscow and to live like a Russian was something with a modest expense attached to it.

To try to live in Moscow as if I was in London cost an absolute fortune at the time (the early 1990s).

Simply because so much of what made up London life was near unavailable in the Russian capital.

Dhaka is not an expensive place to live. It is an expensive place to live if you want to live like you are in New York.

These are two different things and we should be careful not to confuse them.  

Tim Worstall is a senior fellow at the Adam Smith Institute in London

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