JEDDAH, Jul 11: Jeddah has been ranked as one of the top 10 cheapest cities in the world, according to the Worldwide Cost of Living (2011) survey conducted by the Economist Intelligence Unit (EIU). Karachi was the cheapest, while Tokyo was the most expensive. Jeddah came 128th.
Cities in the Middle East and North Africa make up the bulk of the cheapest locations, said the report.
According to the survey, Jeddah is, however, comparatively expensive to cities such as Tehran (130), Tunis (132), New Delhi (129) and Mumbai (131). The Sri Lankan capital Colombo, ranked 114, is among the top 20 cheapest locations.
Commenting on the survey results, Jarmo T. Kotilaine, chief economist at the National Commercial Bank, said: "The EIU's findings about Jeddah highlight the relative cost competitiveness of the Middle East in general as compared to more established business hubs in the West and in Asia. The low cost constitutes as important potential comparative advantages for the region as it seeks to attract more foreign direct investment. Jeddah's competitiveness is further boosted by its strategic location and access to a number of foreign markets through its international port and airport."
He said it must be remembered, however, that cheap does not automatically mean competitive. As the compilers of the index point out, low costs are typically associated with weakened currencies, low levels of development and, in some cases, price controls and subsidies on staple goods.
All of these factors either are or have been present in Jeddah in varying degrees. The most important among these challenges is the level of development. In the case of Jeddah, progress in terms of enhancing the city's standing in the eyes of investors will have to involve substantial additional investments in infrastructure at all levels, he said.
Similarly, the Saudi housing market in general is suffering from substantial shortages that translates into fragmentation, capacity constraints and higher costs. This may significantly limit the ability of business to capitalize on Jeddah's cost advantages. While Jeddah's potential advantages are real, more investment is required to properly capitalize on them, Kotilaine said.
Mohammad Ilays Khan, a Pakistani national who has lived in Jeddah for the last 24 years, agrees with the EIU ranking. He said Jeddah is no doubt cheaper to live in compared to other cities.
"Even when I go to Pakistan on vacation, I feel the pinch of high prices there. Things are very expensive there if you compare them with the Pakistani rupees," he added.
Khan, who works for a local foodstuff company, said food is very cheap in Saudi Arabia. Rents are lower than in some other cities in the region such as Dubai and Doha, he said.
"Anybody earning SR3,000 can live comfortably in Jeddah without much saving," he said.
Cities in the Middle East and North Africa make up the bulk of the cheapest locations, said the report.
According to the survey, Jeddah is, however, comparatively expensive to cities such as Tehran (130), Tunis (132), New Delhi (129) and Mumbai (131). The Sri Lankan capital Colombo, ranked 114, is among the top 20 cheapest locations.
Commenting on the survey results, Jarmo T. Kotilaine, chief economist at the National Commercial Bank, said: "The EIU's findings about Jeddah highlight the relative cost competitiveness of the Middle East in general as compared to more established business hubs in the West and in Asia. The low cost constitutes as important potential comparative advantages for the region as it seeks to attract more foreign direct investment. Jeddah's competitiveness is further boosted by its strategic location and access to a number of foreign markets through its international port and airport."
He said it must be remembered, however, that cheap does not automatically mean competitive. As the compilers of the index point out, low costs are typically associated with weakened currencies, low levels of development and, in some cases, price controls and subsidies on staple goods.
All of these factors either are or have been present in Jeddah in varying degrees. The most important among these challenges is the level of development. In the case of Jeddah, progress in terms of enhancing the city's standing in the eyes of investors will have to involve substantial additional investments in infrastructure at all levels, he said.
Similarly, the Saudi housing market in general is suffering from substantial shortages that translates into fragmentation, capacity constraints and higher costs. This may significantly limit the ability of business to capitalize on Jeddah's cost advantages. While Jeddah's potential advantages are real, more investment is required to properly capitalize on them, Kotilaine said.
Mohammad Ilays Khan, a Pakistani national who has lived in Jeddah for the last 24 years, agrees with the EIU ranking. He said Jeddah is no doubt cheaper to live in compared to other cities.
"Even when I go to Pakistan on vacation, I feel the pinch of high prices there. Things are very expensive there if you compare them with the Pakistani rupees," he added.
Khan, who works for a local foodstuff company, said food is very cheap in Saudi Arabia. Rents are lower than in some other cities in the region such as Dubai and Doha, he said.
"Anybody earning SR3,000 can live comfortably in Jeddah without much saving," he said.
http://en.harakahdaily.net/index.php/berita-utama/world/3114-jeddah-ranked-among-worlds-cheapest-cities.html
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