Costs up, but S’pore far cheaper than rivals

The Republic is 12th most expensive city in Asia

WITH inflation and fluctuating exchange rates, Singapore has leapt 27 places up the global rankings of the world’s most expensive cities to live in. The consolation for the Republic is, its regional rivals have seen costs balloon far more astronomically.

Even as it jumped up to 95th place worldwide, Singapore’s Asian ranking rose just one notch up to 12th place - with consumer goods here about 15 per cent cheaper than in Hong Kong, according to findings by human resources firm ECA International.

These goods, which include food items and services, are also 68 per cent cheaper here than in Tokyo, while Beijing is now three times more expensive than Singapore, compared to last year.

Will all this make Singapore a more attractive option for expatriates and international companies setting up base here?

ECA International Asia general manager Lee Quane said that Singapore thought so. “Companies here will have to pay a higher cost of living allowance to keep pace with rising costs, but they would have to pay an even higher allowance elsewhere in Asia,” he said.

In the coming months, Mr Quane expects inflation here to hold steady, and the Singapore dollar value to depreciate as the US dollar strengthens. “I don’t see cost of living becoming more expensive here, but it won’t become cheaper either,” he said.

Singapore International Chamber of Commerce chief executive Phillip Overmyer said multinational companies were now “trying to understand what would happen after the economic crisis”, and how to serve emerging markets after the turmoil dies down.

“With the lower cost of living in Singapore, it will encourage companies to put its analysts here, such as market researchers and R&D personnel,” he said. “It would support companies to use Singapore as regional headquarters for Asia.”

This could take six to eight months to happen, as companies would need to assess their financial position before focussing on Asia’s domestic market. For now, rising costs would spell bad news for expats as companies are reportedly giving out less generous remuneration packages.

The Singapore expat community, said Mr Overmyer, is different than it was ten years ago, when the expats held top positions in companies.

“Increasingly, the expats tend to be here for the learning experience and in mid-level positions with less generous packages,” he said. This group would now be “struggling a little more”, he added. “But if Singapore remains relatively less expensive, we would still be more attractive.”

ECA’s ranking was compiled using surveys done in March and September and using November exchange rates, over 370 territories.

MOST EXPENSIVE IN ASIA

1. Tokyo (global rank: 2)

5. Beijing (31)

6. Hong Kong (33)

8. Taipei (76)

11. Seoul (90)

12. Singapore (95)

Source : Today - 5 Dec 2008