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I did a post a while back on how I’m living a significantly cheaper life in Mexico than I did in a relatively inexpensive city in the U.S. But some things cost more—a lot more. You will notice this phenomenon in a lot of the world’s cheapest places to travel. You’ll pay less for almost everything, but some items or services will be far more than you would pay at home.
You can chalk some of this up to inefficient distribution system, government protectionism, or scarcity, but just as often it boils down to something less complicated: a monopoly. There’s only one beer company maybe (as in much of Latin America). There’s only one phone company (common where the telecom system used to be owned by the government). Maybe there’s only one company authorized to distribute imported electronics (often a president’s relative).
A newspaper in Mexico recently ran a story on what effect Mexico’s monopolies have on pricing and the result is pretty shocking. There’s a good reason Mexico’s Carlos Slim sometimes top the list as the richest man in the world —beating out Warren Buffet and Bill Gates: every day Mexicans put money in his pocket whether they like it or not. Here are the costs of some of these monopoly (or near-monopoly) goods and services work out compared to costs in the U.S.
– High-speed internet access – 144% more in Mexico
– Long distance phone call costs – 239% more in Mexico
– Basic cable TV subscriptions – 59% more
Soda costs about 25% more here than in the U.S. This is all despite the minimum wage south of the border being US$4.50 per day.
So what do you do? You can fruitlessly complain, you can try to avoid it by changing your consumption habits, or you suck it up and pay. If you want to drink beer in Colombia, you either drink the monopoly brand or you don’t drink beer at all. In Europe and Asia you have lots of budget airlines to choose from, but in many other parts of the world it’s the monopoly airline or nothing.
Sad to say, for the most part you’re screwed. If you’re on a round-the-world journey, the best thing you can do is figure out where you get reamed and where you don’t, then adjust your spending to match. If you’re living somewhere as an expat, figure out which things are crazy expensive where you are and either bring them along, have them brought by visitors, or stock up when you leave the country.
Sometimes there’s a silver lining though. Internet access is expensive in Mexico, but that means it’s still really easy to find internet cafes. You don’t have to lug around your laptop and hunt down a hotspot to make a Skype call or send a few e-mails.
You can often find this out-of-whack pricing info in the front of what is still the easiest reference guide available: a good guidebook. Buy one well before your trip and it could save you a small fortune later. Expatriate message boards for where you’re going are also a great source. Those people live and breathe local prices every day and they know what’s out of whack.
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