The Grey Chronicles

2009.February.22

Relative Hardship in Iligan?


In my previous post, I quoted Steven McManus (2008) who wrote:

“It is quite normal to have considerable differences between Expatriates doing exactly the same job, in the same country. These differences are caused by these factors: the Cost of Living difference between the Home Country (country of origin) and Host Country (where they work). The Relative Hardship difference between Home and Host Country. For example, moving to a country where more day to day hardship will be experienced, would normally result in more pay to compensate for the hardship. The Exchange Rate difference between the Home and Host Country.”

Coleman (2009i) gave a very succint example on how much salary would an expatriate moving from New York to Bangalore get. Intriqued, I wanted to calculate the eqivalent salary of an expatriate moving from Mumbai to Iligan City.

Cost of Living Index

Cost of Living Index

Recent survey on Cost of Living index survey in (2009), however, reveals that Manila ranked 126 at 82.07 while Mumbai ranked 171 at 76.04. Meaning that early this year, it became apparent that living in Manila is much more expensive than Mumbai. Remember that New York is rated at 100. The overall cost of living in Manila is 6.03% more expensive than Mumbai given the Mumbai cost of living index of 76.04 versus Manila’s 82.07.
 

In terms of relative hardship, Coleman explained:

“Assessed in global terms, India is currently ranked as an extreme hardship location, which typically commands a 40% salary premium for hardship. An expatriate moving from a country similar to India would experience less hardship than someone moving from a country that is completely different. . . . The global factors which are used to determine a relative hardship ranking world-wide include differences in Economic conditions such as poverty and service provision; Political conditions such as tolerance of diverse views, life style and conformity to cultural norms; Religious conditions such as religious prevalence, and tolerance of other religions; Public Service conditions such as provision, administration and accessibility to water, electricity, sanitation, work permits etc; Climatic conditions such as extremely hot or cold weather; Safety conditions such as personal security and the threat of public violence; Health conditions such as health standards and risk of viral outbreaks; Education conditions such as state education standards, expenses, mother-tongue teaching, and school proximity to home; and Transportation conditions such as public transport availability, safety and efficiency. ”

Incidentally, read a previous post regarding the supposedly “relative hardship” Indian expats are enduring while living in Iligan City.

“Worse of all, these same ex-NSC employees observe that their counterpart expats, toting their GSPI-issued laptops, hired in 2004 at a salary level based on 2004 exchange rates, are pampered. Expats are afforded with shuttle buses to ferry their children enrolled to premier private school all expenses paid for by GSPI. They relax in their fully furnished no-rent blue houses with free electricity, free cable, landline and internet connections, plus free-flowing no-charge potable water, and sport amenities that could rival a five-star hotel: Olympic-size swimming pool, a covered tennis court, a standard size basketball court, guarded every hour 24/7!.”

Research on the internet produced no equivalent figure for the so-called relative hardship for living in Iligan City. With the relative hardhip in Mumbai declared as 40%, let us then address, in succeeding posts, each of these factors by comparing conditions in Mumbai and Iligan in 2005, when GSPI was officially declared open for business and a horde of expats came to share their expertise in steel manufacturing.


Notes:

Exchange Rates based on Interbank, Median Bidding Rate per trading day as published by World Currency Exchange Rates and FXHistory.

The World Bank (2005). World Development Report 2006: Equity and Development Washinton, D.C.: The World Bank and Oxford University Press., 2005. p. 292-3. back to text

IMF (2006), World Economic Outlook – April 2006; Globalization and Inflation. Washington, D.C.: International Monetary Fund, p. 209. back to text

Economics and Research Department (2007). A Snapshot of Asia in 2005: Purchasing Power Parity Manila: Asian Development Bank, 31 July 2007. back to text

Swanson, Eric
[principal author] (2008)
Poverty data: A supplement to World Development Indicators 2008 Washington, D.C.: The World Bank, December 2008. back to text

Coleman, Steven (2009) International Cost of Living Trends 2009 Online: Online: ArticleBase, 30 January 2009. back to text

Coleman, Steven (2009i) Expatriate Cost of Living in India for February 2009 Online: EzineArticles.com, 13 February 2009. back to text

McManus, Steven (2008). What Makes Expatriate Pay Different to Local People?. Online: ArticleBase, 29 March 2008. back to text

Disclaimer : The posts on this site are my own and doesn’t necessarily represent any organization’s positions, strategies or opinions.

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