Ppedestrians cross at a traffic junction in Singapore on June 22, 2013. Singapore was the most expensive place to live in Southeast Asia, followed by Bangkok and Jakarta, according to a survey. (AFP Photo/Roslan Rahman)
[Updated at 2:20 p.m. on Friday, June 13, 2014]
Jakarta. For dollar-earning expatriates in Indonesia, the rupiah’s decline has made the cost of living in Southeast Asia’s biggest country cheaper, according to a survey released by ECA International.
Jakarta was ranked the 180th most expensive city in the world for expatriates in 2014, compared to 128th last year, according to a report released on Tuesday by ECA, which provides services for people assigned for work around the world. Of the 440 cities in the survey, Caracas, Venezuela was ranked as the most expensive, as a result of annual inflation at around 80 percent.
The rupiah was among the weakest-performing currencies across Asia last year. The Indonesian currency lost 26 percent against the US dollar in 2013, amid concern about slowing economic growth and higher fuel prices, but has gained about 3 percent this year. At the same time, the weak rupiah has pushed down expenses for expatriates on many levels.
“Expatriates are paid in US dollars, and that is substantial for their income,” said Eric Sugandi, a Jakarta-based economist at Standard Chartered. “Depreciation of the currency has a large effect on expatriates.”
Still, among major Southeast Asian nations, Jakarta is the third most expensive city, followed by Vientiane, Kuala Lumpur, and Manila, according to the ECA survey. Singapore and Bangkok are the two costliest cities to live, while Surabaya was the cheapest in the region.
ECA uses what it terms a “basket of goods” for each city surveyed, taking into account the cost of 130 day-to-day items like food, clothing, electronic goods, drinking, and dining out. Combined with the local currency fluctuation, each city is ranked both globally and within its region.
The “basket of goods” for Jakarta rose by 8 percent in 2014, but paired with a significant drop in the rupiah against the dollar, the Indonesian capital has become more economical for expatriates.
Expatriates like Kyle Larson, a Canadian who lives in Jakarta and works in the construction industry, says he has felt the value of his income climb recently but significant expenses, such as for housing and education, remain.
“Housing is the biggest one without a doubt,” said Larson. “I haven’t seen landlords drop their prices. Most expect you to pay two or sometimes three years in advance, and that’s very hard without a company behind you.” Housing in the central business district of Jakarta can cost upward of $1,000 a month for a one bedroom apartment.
Those who come to live in Jakarta with a family have to balance a hefty tuition for their children. “That can run you anywhere from $25,000 to $30,000 per year, even more for senior children,” said Larson.
Singapore, a financial hub in Asia, has the highest cost of living for expatriates in Southeast Asia. The high cost pays off when it comes to quality of life, where Singapore is ranked well above all of its neighbors, according to a quality of living survey by Mercer, which provides human resources services.
The proximity to Singapore and low cost of living is what drives many expatriates to live in neighboring countries like Indonesia and Malaysia. In the battle for expatriates one of the key differences between Jakarta and Kuala Lumpur is public transportation. “It’s just not well developed yet in Jakarta,” Eric of Standard Chartered said.
Where Jakarta falls short in transportation they make up in cultural tolerance. “Indonesian people are willing to adjust to expatriate culture,” said Eric.
Tokyo ranked 11th as the most expensive globally, making it the most expensive in the Asia-Pacific region, according to the ECA survey.
Living outside their home countries, expatriates have to assimilate to the culture and learn the language in order to succeed, Eric said.
“Whatever money it costs, most expats don’t complain about the costs of living. We do appreciate all the great things that Indonesia has to offer, and that’s why we choose to live here,” said Larson. “You kind of become Indonesian. It gets in your blood and you don’t want to leave.”
By Arman Dzidzovic on 01:52 pm Jun 13, 2014
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