Rio is Americas’ Most Expensive City

By Jaylan Boyle, Senior Contributing Reporter

RIO DE JANEIRO – Rio now takes the title of most expensive city in the Americas for foreigners to live, according to a recent survey undertaken by British consultancy Employment Conditions Abroad (ECA).

The study comes with a caveat: it was undertaken and compiled before this year’s dramatic fall in the value of the Euro, meaning in reality those cities of the American continent will rank even higher on the list of the four hundred surveyed than where they currently appear.

Rio’s position as the most expensive city in the western hemisphere represents a sharp rise compared to last year’s study, mainly attributable to increased demand for Brazilian commodities and the steadily strengthening Real, meaning that the significant increase in the cost of living affects the entire country. São Paulo has experienced a similarly dramatic leap, though still lags somewhat behind despite being the business hub of the country.

The study is arguably less than comprehensive, however. While it includes food (groceries and dining out at restaurants), drinks and tobacco, “miscellaneous” goods, services, clothing, electronics and motoring, it neglects such essentials to the expat as car purchase, school fees, utilities and accommodation. Many foreigners making their home in Rio will likely see these omissions as somewhat underplaying the survey’s findings, with accommodation proving a particularly pricey outlay in Rio, with prices forced up, ironically by the expat oil industry’s huge housing budgets.

One of the more common complaints among expats living in Rio is the prohibitive cost of consumer electronics, ranging from cameras to (non-pirate) computer software, which is largely attributable to Brazil’s high import taxes. In 1995, Brazil and its South American MERCOSUR trade partners implemented a Common External Tariff to set the duty costs of various items entering the country at a maximum of 22.5 percent of declared value. Nevertheless, each member country has a list of exceptions, which can be subject to hugely inflated rates. In Brazil this includes electronics, automobiles, and shoes.

In addition to import tariffs, a flat sixty percent tax is levied on any commodity shipped to Brazil by air (via a courier company such as FedEx for example) valued between US$51 and US$3,000. As a comparison, importing goods into the UK for non-commercial purposes can often little or no duty costs. With the addition of other sundry fees, sourcing products from abroad in Brazil can sometimes as much as double the original cost, as New Zealander Peter Laing can testify:

“I ordered some computer-related electronics from the UK after seeing how much the same goods cost here, without first investigating import costs in Brazil. I just assumed that fees would be roughly the same as at home. I was shocked when my goods, transported by DHL, were quarantined in São Paulo until I paid another seven hundred pounds sterling (US$1,030), double the value of the products I ordered.”

ECA’s study found Tokyo to be the worlds most expensive city based on the perceptions of foreigners, with Oslo the most expensive in Europe. Rio de Janeiro ranked 28th overall, up from 132nd in 2009, with Manhattan following in 29th. The entire list of countries ranked by ECA can be seen here.