[Cost of Living Skyrockets] Is Turkmenistan's Ashgabat Now the World's Second Most Expensive City?
When it comes to the world's most expensive cities, you might think of Tokyo, New York, or Hong Kong—but would you guess that Ashgabat, the capital of Turkmenistan, ranks second in the world? According to a survey by American HR consulting firm Mercer, this mysterious city, known as the "City of White Marble," ranks as the second most expensive city globally for expatriates, second only to Hong Kong, and even ahead of Tokyo (3rd) and New York (6th).
This isn't the first time Ashgabat has made the cost-of-living rankings. Back in 2019, another HR consulting firm, ECA International, noted that Ashgabat had surged from 111th place in 2018 to the top spot—an astonishing jump in ranking.
So why is the cost of living in Ashgabat so high? The key lies in the black market exchange rate and foreign exchange controls. Since 2015, the Turkmen government has imposed currency restrictions, banning individuals from legally exchanging US dollars, while businesses can only exchange limited amounts at the official rate (1 USD to 3.5 Turkmen manat). In reality, local residents mostly rely on the black market rate. According to bne IntelliNews, the black market rate reached as high as 1 USD to 23 manat in May 2020—6.5 times the official rate.
For example, a steak priced at 65 manat would cost 18.6 USD at the official rate, but only about 2.8 USD at the black market rate—an enormous gap. This huge price discrepancy has also raised suspicions that many people, including President Gurbanguly Berdymukhamedov and his relatives, are profiting from it.
Since the black market rate is unverifiable and highly volatile, travelers exchanging currency locally must rely on the help of locals, with rates varying from person to person. We exchanged at a rate of 1:14 in the middle of last year, but just months later it had dropped to 1:10—showing just how drastically the rate can change.
The black market exchange rate directly drives up the price of imported goods, further fueling inflation. According to Trading Economics, Ashgabat's inflation rate rose from 9.4% in 2018 to 13.4% in 2019. Food prices have continued to soar, and supply has also been affected. The Turkmen government still maintains Soviet-style state-run food shops, selling staples like chicken, flour, and sugar through subsidies and rationing. However, as prices have surged, the government has further tightened supplies, with reports of repeated shortages.
To prevent the outside world from learning about the situation, the government had explicitly banned citizens from queuing outside state-run food shops, requiring customers to "knock on the door" to enter. Foreigners, meanwhile, could only shop at private food stores, where prices were exorbitant and far beyond what ordinary citizens could afford.
Besides food, other living costs are also staggeringly high. For instance, renting a room in Ashgabat costs between US$300 and US$700 a month — comparable to the price of a subdivided flat in Hong Kong — while a SIM card with just 1GB of data costs a whopping US$30, with an additional 1GB costing another US$15.
Finally, beyond its astonishing cost of living, Ashgabat's urban planning is a rarity in the world: uniform white marble buildings, streets devoid of people, invisible shop signs and antennas, an entire fleet of white cars... everything makes you feel as though you've stepped into a "white ghost city".
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