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Tuesday, June 27, 2006

Moscow: The World's Most Oppressive City

The blogosphere is buzzing with news about Moscow becoming the world's most expensive city, followed by Seoul, Tokyo, Hong Kong and London. As the Associated Press reports: "The survey by Mercer Human Resource Consulting ranked 144 cities around the world, measuring the comparative cost of more than 200 items such as housing, transportation and food. The survey is aimed at helping multinational employers determine compensation for their expatriate workers."

But what most everyone seems to be ignoring, including the linked post on Sean Guillory's blog and save for such acute analysis as that provided by the Guardian, is that while Moscow is the world's most expensive city the average income and productivity of Russia's citizens lags far behind that of the other most-expensive cities on the list, making Moscow's expenses horrifically oppressive for the local population.

The Mercer study, because it is only interested in the incomes of foreigners, takes no notice of the average income of the people living in the countries studied, but merely reports the absolute cost of various items. In second-place Seoul, for example, the population has a per capita GDP of $20,400 while that of Russia is a mere $11,100 (a figure which is inflated by being adjusted for "purchasing power parity"). What this means is that if the prices in Seoul and Moscow were the same, they would be twice as difficult for the average Russian to pay compared to the average Korean. And, in fact, Moscow's prices are actually higher than those of Seoul, while Russia's GDP is distributed far less equally than Korea's, leaving huge numbers of Russians desperately poor. So in fact, Moscow is even more oppressive than it superficially appears, by far the most oppressive city in the world in terms of prices. That doesn't even begin to consider, of course, the oppression factor presented by racism, Gestapo like police, corruption and lack of information.

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