Cross-Cultural Economics

by Editor on July 30, 2019

by Heather Pubols

About a week after my husband and I moved to Kenya in 2009 I took my first real trip through the grocery store to look for items that I needed for our home. The store near where we lived had an amazing variety! You could buy everything from a loaf of bread to a new kitchen table and everything in between. It was like a Kenyan Super Wal-Mart!

Much was similar to my shopping experiences in the United States, but one difference that I didn’t anticipate was prices. I remember picking up a medium box of corn flakes, doing the currency conversion, and discovering that it would cost me almost $10 USD compared to the $3 I’d probably pay at home. On the other hand, I remember visiting the butcher and discovering that we could buy a nice piece of beef filet for less than it would cost at home. We began to see this with all kinds of other things, too.

When we bought a car, we were in for another sticker shock. At that time, no cars were manufactured in Kenya. All cars were imported. With the help of a trusted agent, we found a reliable 8-year-old car.  However, because of import tariffs, shipping and agent fees, the final cost of this car, like the others on the market, was around double what we would have paid for it in the US.

On the other hand, we lived very close to a national park filled with wild animals that we could only see in a zoo in our home country.  Because we were residents, our entrance fee to the park was about $10 – a fraction of the cost of what a foreign tourist would pay to get into the same park. We also had easy access to many of Kenya’s all-inclusive resorts and hotels. At times in the off-season some offered prices similar to moderate to cheap hotels in the US.

All of these experiences became daily lessons in cultural economics.

 

Economies are cross-cultural, too
Before living overseas, I thought that if a country had less wealth, then products would be cheaper. Clearly, those ideas needed to go out the window!

What I came to understand was that a variety of factors impacted local prices. Those include local buying preferences, taxes, and what is made locally versus imported. When we lived in Kenya, I learned that labor for services was often less, but products (especially those requiring manufacturing or import) were usually more expensive and fewer people could afford them. The supply was less because the demand was less, so the price was higher. This was a different economic model than I was used to.

Understanding the various costs of living where you will live is important as you create a budget for living in a foreign country. Mercer provides a helpful annual global cost of living report. Their 2019 report has some surprising results. Eight African cities are in the top 50 most expensive cities in the world.  In fact, N’djemena, Chad, in central Africa, was listed as more expensive to live in than Geneva, Switzerland!

One other factor that needs to be considered is constantly changing currency exchange rates. Like most missionaries, we received funds in the currency of our home country, so changes in its value against the currency of our host country impacted our costs. For example, our 50,000 Kenya Shilling per month rent could be $350 US dollars one month and $500 USD the next all depending on the KSh/USD comparative value. This changed our cash flow from month to month at times from famine to feast or vice versa.

 

Explaining economic differences can be a challenge
All of this can be difficult to explain especially to friends, family and ministry partners at home. Some may have the same ideas that I did about costs of living; they may not understand a high ministry budget for work in a developing country. Others could have hidden jealousy when you are able to do or have something that could be unusual or extravagant in your home country.

Help build a bridge through your communication. Invite your community into “your world.” A good place to start is in your regular ministry communication – your newsletter or blog. Tell stories about silly faux pas and language mishaps and your experiences with $10 boxes of corn flakes and $10 park entrance fees. Explain cultural differences, including economic ones, and what surprises you about them with a view of how God is expanding your worldview.

However public communication isn’t the best forum to share everything. Discussions in small groups and conversations with people one on one are great places to share more details or explain things that may be more controversial. Be patient, use wisdom and let your focus for sharing information about economic differences be on nurturing knowledge that lets your community grow with you.

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Heather and her husband served as missionaries based in Africa and Europe from 2009 to 2018.  After moving back to the US, Heather launched a new ministry, LeMotif, which focuses on helping Christian organizations with marketing and communications. You can learn more about her ministry at www.lemotif.org

 

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