Singapore still the top choice for expat location in Asia

Published March 15, 2007

Singapore still the top choice for expat location in Asia

Living standards slip in HK, Jakarta, KL and Beijing: poll

By SIOW LI SEN

(SINGAPORE) Singapore continues to be the best place in Asia for expatriates to live, while standards have fallen in Hong Kong, Jakarta, Kuala Lumpur and Beijing, according to a survey by a consultant.

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Overall though, living standards have improved in most of Asia compared with five years ago, making it easier for multinationals to encourage their employees to undertake assignments in cities in China and India, and reducing the hardship allowances that have to be paid, said ECA International.

'Excellent infrastructure and facilities, coupled with its cosmopolitan make-up, low crime rate, socio-political stability and favourable climate make Singapore a very favourable location for foreigners, and justify its top spot in the rankings,' said Lee Quane, general manager, ECA International Hong Kong.

ECA's annual location-ranking survey compares living standards in 254 places around the world according to categories including climate, air quality, health services, housing and utilities, isolation, social network and leisure facilities, infrastructure, personal safety and political tensions. Overall scores are used to set allowances which compensate expatriate staff for the difficulties of living in their assignment location.

Cities in Australia, New Zealand, Japan, Canada, Denmark, Netherlands, Belgium, Germany, Ireland and Switzerland join Singapore to make up the top 10 favourable locations for Asian expatriates to live in. The least favourable place in the world to live in is Baghdad, followed by Kabul and Karachi.

Out of the 48 Asian cities in the survey, only eight have fallen down the rankings between 2002 and 2007, with Port Moresby, Jakarta and Bandar Seri Begawan deteriorating the most in terms of living standards afforded to foreigners.

Hong Kong has fallen from 18th to 23rd position during the period, being overtaken by cities including Tokyo, while Kuala Lumpur has fallen from 60th to 63rd.

'The main reason Hong Kong has deteriorated is air pollution, which has worsened considerably, but there have been improvement in other factors,' Mr Quane told BT in a telephone interview. 'Health risks, due to its proximity to China,' with worries such as potential outbreaks of bird flu, are another negative for Hong Kong, he said. 'We recommend paying a hardship allowance for sending someone to Hong Kong,' he said.

Hardship allowances are paid to encourage employees to move to a location where living standards are bad. This is in addition to paying cost of living allowances which are designed to maintain the pattern of consumption.

The hardship allowance recommendation for Hong Kong is 10 per cent of the base salary, he said.

Air quality in other locations, such as Port Moresby, Jakarta, Kuala Lumpur and Beijing has also become worse in recent years, which has led to an increase in associated health risks.

But with the overall improvement in living standards in many Chinese and Indian cities, hardship allowances are getting lower.

Within Asia, Wuhan and Xian have shown the biggest improvement in living standards, both moving up 46 places in the rankings. Chengdu, Chongqing, Dalian, Nanjing, Shanghai, Shenzhen, Xiamen, Macau, Bangalore, Chennai, Mumbai, New Delhi, Ulaanbaatar, Vientiane, Phnom Penh, Georgetown and Tokyo have also risen by more than 20 places over the five years.

'This is making a number of assignments in the region more cost-effective, helping Asia to maintain its competitive edge, since these allowances, which are often a costly component of an expatriate's salary package, are being reduced,' said Mr Quane.

'Somebody moving from Singapore to Shanghai, we'd recommend it (hardship allowance) but some companies don't go along with that,' he added.