In Cheap Destinations, Some Things Are Pricey

One of the most eye-opening experiences for most expatriates is finding out that things they bought for cheap in their supposedly richer country are more expensive locally in the developing world. In some cases, the cost is twice as much. Travelers discover this the hard way too when they go to replace their broken digital camera or get a new pair of sneakers/trainers with a swoosh or three stripes on the side.

Since I have a little Mexican beach house in the Yucatan I’ve gotten a taste of this oddity before, but now that I’m living here it’s even more pronounced. So to give you an idea of how this can play out, here’s a table on what’s cheaper and not cheaper in Mexico in comparison to an average mid-sized city in the U.S.

expatriate expenses

If you look closely, you may spot a pattern there that applies to many other developing countries as well. Labor is cheap, construction is cheap, local food is cheap. When it comes to goods that can pass through multiple middlemen, however, things get more complicated—and more expensive. In the U.S. and Europe, factories hum at ISO-certified output levels, Six Sigma bots wring out every inefficiency, and cost controls are analyzed every step of the way. Every wasted action gets eradicated.

In countries that cringe at the mere thought of all that—part of the reason we find them attractive—there are lots of leaks in the system and lots of hands getting their percentage along the way. Hey, it keeps more people employed that way and as a result of the higher prices people don’t buy as much crap that they don’t need. Things get fixed too—I’ve passed two TV repair shops walking around town in Guanajuato. When’s the last time you saw one of those?

Maybe no better or worse in the end, but just remember that not everything is cheap in the cheapest places to travel.

Comments
  1. Marcus Aurelius

    I was in the Philippines in ’06 and my deck shoes were almost in tatters, walang problema, we went to a SM and found a cobbler and he repaired the shoes for way less than it would cost to have bought a new pair. Same with my camera which got batted off a table post-TSA at ATW (but it took almost the entire time I was there for the technician to get back from vacation & the time it took him to perform the repair, alas the camera got swept off the bed when back at home this time the repair wasn’t so cheap).

    When in the UAE as an ex-pat I had lots of electronic gear repaired, mostly my stereo receiver which is still cranking out sound for us. Kinda wish that last repair wasn’t so sound so I could go out and get a new receiver, LOL the speakers I bought in the UAE are already crapping out.

    Don’t forget about all that taxes, regulations, and currency trades it takes to acquire import goods. All of those can potentially add as well. Some nations tax imports highly and some nations tax all production highly.

    • tim

      Thanks for the input. And agreed on the import taxation. That was always the issue in India until they started prying open the import door, but it’s still super-expensive there for some items that are downright cheap elsewhere—just because they’re not made in India.

  2. Kath

    So do you want me to send you some peanut butter and jelly? :)

    • tim

      Well, it’s easy to get peanut butter, but the kind with lots of extra sugar…

  3. Paul Karl Lukacs

    Notes from Thailand:

    — Air fares within eastern Asia feel expensive, because Americans are used to grabbing round-trip coast-to-coast flights (about 2,000 miles each way) for less than $300. Here it can be double that for similar distances, particularly into jurisdictions which are not welcoming to low cost carriers.

    — The “Southwest effect” tends to lower airfares between a U.S. city pair to the level of the lowest priced ticket. No such luck here. AirAsia may fly a route, but a full service carrier like Singapore or Thai servicing the same route may still charge twice or triple the Air Asia fare.

    — The electronics I’ve purchased seem to cost the same as in the U.S. Some, like the mobile phones, feel cheaper because the emphasis is on pay-as-you-go rather than locking you into a long-term contract.

    — Some brand name products are cheap because the products are made locally by a subsidiary or licensee. These include Colgate (60 cents for a Reach-style toothbrush) and Lipton (50 cents for a can of iced tea).

    — Best Food brand jelly appears to be made in Thailand and is cheap (a buck-ish). Skippy brand peanut butter is made in China and costs US$4.50 for the squat 12-ounce tub.

    — Chocolate tends to be expensive, with the Swiss and German brands costing $3-$4 per bar.

    — So a dessert of chocolate with peanut butter on top can be the most expensive part of a meal.

    — Drinking water costs about one dollar per 1.5 gallons for most brands, and about a buck and a half for the fancy brands that pretend to be French mineral water.

    — Anything that seems French is priced at a premium.

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