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Pakistan is in the midst of a crisis characterised by interwoven economic, political and security challenges and Karachi is the city where the business of anarchy and chaos is booming since quite some time.
According to a recently released Cost of Living survey 2011 by Mercer - a global organisation specialising in human resource-related financial advice, products and services - Karachi is the cheapest city in the world for expatriates. Luanda, the capital of Angola is ranked as the worlds most expensive city, followed by Tokyo (Japan), NDjamena (Chad), Moscow (Russia) and Geneva (Switzerland).
Among the cheapest cities in the world, Karachi is followed by Managua (Nicaragua), La Paz (Bolivia), Addis Ababa (Ethiopia), Bishkek (Kyrgyzstan) and Islamabad (Pakistan). In Asia, Jakarta ranks 69, Hanoi 136, Bangkok 88 and Kuala Lumpur 104. New Delhi (85) is Indias most expensive city followed by Mumbai (95) and Bangalore (180).
For its 2010 cost of living report, Mercer surveyed 214 locations around the world, in which multinational companies and international organisations have a presence or are looking to set up operations. The ranking was based on a basket of more than 200 goods, including housing, transportation, food, clothing, household goods, and entertainment.
To determine a citys ranking, Mercer used New York as the baseline city for tracking price movements of its basket of goods. Relative weakness or strength of the host country currency was measured against the US dollar over the prior twelve months. Apart from currency fluctuations and price movements, cities rankings changed based on the movement of other cities in the ranking.
This survey can help corporations keep their overseas compensation packages in line with costs of living prevalent in other countries where income levels could be different from the home country. Expatriate assignments are instrumental in human resource development, yet they can be costly. Maintenance of living standards in the host country (at par with home country) becomes critical to retain valuable talent.
According to Mercer, Karachi is the cheapest city primarily due to housing costs - which has a heavy weight in the ranking formulation - becoming cheaper in terms of US dollar compared to 2010. The report says that the average monthly rent for an unfurnished two-bedroom luxury apartment in the city fell to about $293 in 2011 survey from $353 in 2010.
Mercer found out that currency fluctuation, inflation, political instability and natural disasters were the main factors which influenced the cost of living for expats across the world. It is pretty evident that Pakistan has experienced all these things lately. In fact, the Pakistani economy is still reeling with stagflation, and Karachi being the main driver of growth absorbs these effects. Add to that the law and order fiascos, and the pictures anything but pretty.
Pakistan would probably be unable to cash in on Karachis status as the most economical overseas work destination. The lingering security situation has largely kept foreign investors at bay, as evident from declining FDI inflows. Negative travel advisories have deterred average businessmen from visiting Pakistan and professionals from opting to work here.
Despite all the odds, one can find many expats in Pakistan frequently sharing their favorable views and experiences. Some would even vouch for a different situation on the ground. Pakistan has, however, become such an international pariah that, at least for the foreseeable future, the countrys perception in the west would overcast the reality no matter how strong or convincing the latter is.

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