Foreign nationals in Dhaka share their perspectives following Mercer’s survey that ranked Dhaka as the 47th most expensive city for expats
In Mercer’s 25th annual ‘Cost of Living Survey’ Dhaka became the 47th most expensive city for expatriates in 2019. This is an astounding 19 position jump from 2018 when Mercer listed Dhaka as the 66th most expensive city for expatriates.
The 2019 survey by Mercer, an American organization recognized as the “world’s largest human resource consulting firm”, found cities in Asia most expensive locations for employees working abroad.
The survey concluded that eight out of the top ten of the world’s most expensive cities for expatriates are Asian cities, resulting from high costs for expatriate consumer goods and a dynamic housing market.
Hong Kong continues to be the most expensive city, followed by Tokyo. The least expensive city is Tunis at 209th position, preceded by Tashkent and Karachi.
At 47, Dhaka is tied with Paris. Just below Dhaka is Boston and Sydney on the 49th and 50th position.
The steep rise in expenses for expats is not unique to Dhaka, but unlike more developed countries like France that have much stronger economies, Bangladesh may have to pay a much bigger price for being so expensive.
Associate Professor of Economics at East West University Syed Basher says Dhaka must be ‘liveable’ to stay in the competition.
Already ranked at the bottom among global cities in terms of infrastructure (congestion, utilities, safety), Syed Basher says that the sharp rise in the cost of living in Dhaka makes the city even more uncompetitive.
“However, the rising cost doesn't only explain the production bottlenecks -- from consumer goods to affordable housing -- in the country, it also reflects Bangladesh's, particularly Dhaka’s, growing economic and strategic position in South Asia,” said Dr Basher.
He added that expatriates in Dhaka typically live within a handful of secured areas of Dhaka, which tend to be expensive; whereas, expatriates live more diffusely in other South Asian countries.
“Finally, expatriates in Dhaka may be subject to price discrimination in that they pay higher prices for nontradable goods, such as housing and domestic service,” Dr Basher said.
Low salaries make Dhaka “shockingly” expensive
Working as a lecturer at Dhaka University’s Institute of Modern Languages, Spanish national Rosa Borrajo González de Vega Rosa says Dhaka is not really expensive if all the budget options are taken into account. However, said Rosa, if the quality of goods and services are taken into account, then it gets really expensive.
“I can't compare Bangladesh with Spain because it's completely different, but I could compare Dhaka with Delhi because I have lived there for the last 7 years and it's still in this side of the world. In that respect, I can say that something that really surprised me about Dhaka is that it´s much more expensive than Delhi. Food is more expensive, especially fruit, CNGs are more expensive, books are also more expensive and rent is definitely more expensive,” she said.
Rosa said that rent in Dhaka is almost more expensive or as expensive as in Spain. She said unlike Spain or Delhi, there is no option of choosing a small apartment in Dhaka and expats are forced to share as bigger apartments have expensive rent.
“I know there are much cheaper apartments, but again, I am comparing quality with quality. If you want good quality here, you pay much more than for the same quality elsewhere,” Rosa said.
Rent and buying fruits and vegetables cost her the most. Rosa said most fruits are more expensive here than in Spain, “even fruits from this part of the world, like papaya, for example.”
The most inexpensive things in Dhaka, Rosa says, are services like maids, tailors, carpenters, doctors and medicines.
Rosa feels Dhaka is not necessarily more expensive than many places in the world purely in terms of money. “But it's shockingly expensive when you consider people's salaries. Salaries, even when you pay well, are in most cases really low,” she said.
Rosa finds the contrast between people ́s salaries and the cost of living really significant, mainly for the locals, but also to a lesser extent for expats. “I know that my maid pays Tk6,000 per month for her rent in the slum. That is more than half of what she earns here working 6 days a week,” she said.
Dhaka “as expensive as New Zealand”
Doing an internship in a Dhaka based organization, Vanessa Defriess (not her real name) says living in Dhaka is approximately as expensive as her native New Zealand, if not more expensive.
Laura says there is a perception that Westerners in Bangladesh earn a lot. “While sadly they often earn more that their Bangali counterparts, in comparison to what they would earn at home it is often less,” she said.
Laura said she finds western food overpriced for sometimes very average food. “I eat Bangali food predominantly and have lived most of my time in Dhaka living in Uttara, which is far more affordable than living in Gulshan/Banani/Baridhara,” she said.
“Transport can be expensive but a lot more reasonable that many other large Western cities. If you take public transport it is very inexpensive. However, most foreigners would not travel in such a way,” said Laura.
Having chocolate, cheese, good jams, fruits daily is “unthinkable”
An education professional working in an international school in Dhaka as the head of academic quality control, Susanthika (not her real name) finds it difficult to get good quality services in Dhaka. “Dhaka is very difficult to live in with honesty, as people wait for tips and bribe money,” she said, wishing to give her remarks to Dhaka Tribune anonymously.
As a foreigner, she said, the expectation of ‘tips’ is often overwhelming.
Even though chocolate, cheese and similar manufactured food items are considered luxurious in Sri Lanka, where Susanthika is from, she used to buy these items for daily consumption when living in Malaysia.
“In Malaysia I had these items on a daily basis, especially good jams, good cheese, fresh milk and fruits. But here you can't think about having these daily like I did in Malaysia,” said Susanthika, who lives in Dhaka with her two children.
Susanthika finds fluctuations in prices quite problematic. “Every month I go Tk2/3 thousand over my budget. Two months ago I spent Tk22 thousand for our supermarket expenses. This is just dry ration, not all food. This month it cost me over Tk30 thousand. There has been a Tk6/7 increase in rice prices. The rice I get was Tk88 two months ago, yesterday I bought it for Tk95,” she told Dhaka Tribune.
Susanthika noticed that the price for milk is also fluctuating and the meat prices are going up. All dry ration prices are going up as well.
“They are still reasonable compared to my country. But I don't know, if the prices continue to go up like this it will be costlier that my country within a year,” she said.
VAT items are the most expensive
An American national living in Bangladesh for over 20 years now, Star Faruque avoids going to shops that aim to serve foreigners, as these shops charge more even for normal items.
“From what I have seen from living in Dhaka for 20 years, those shops charge more for normal items because they probably think foreigners don’t know any better. Perhaps most do not. People who are more Bengali like me, know better than to overpay,” she said.
But Star does have to spend more for getting ‘exotic’ items. “I feel bad when I have to pay $20 for 8 ounces of blueberries, also when I have to pay $12-15 for a half kg of strawberries,” she said.
However, it is not just the niche items that are more expensive. Star says everything from toiletries to groceries to clothing to shoes are less expensive in the US.
“There is no such thing as 500-600 percent tax on anything in the States. So, I would have to say the VAT tax items are the most expensive, especially the vehicles,” said Star.
This is why she prefers to do her shopping for personal items from toiletries to clothing outside of Bangladesh.
Restaurants and buying the types of foods she prefers is where she spends the most in her day-to-day expenses.
But lifestyle wise, says Star, having a driver, a cook and cleaners, makes life more comfortable. “Everyone knows that because there are 160 million people in the country, there is no shortage of people and it is not expensive to hire helpers,” she said.