Quality Of Life

Untitled Document

2006 Quality of Life Index

And the winner is…France. The loser? Iraq. No explanation necessary for the latter, but regular readers to these pages may be surprised to see France taking top honors in our annual Quality of Life Index this year. it's the first time this country has risen to first place. More than that, though, it's the first time in 21 years that any country other than the United States has come out tops in our Index. This year, the United States drops from the top spot to sixth position.

Before I get into the merits of living la vie Francaise, let me back up and explain how our Index is rated. How do you determine a good

Why the United States has fallen

The United States falls from the top position it held in this Index for 21 years in a row, to take sixth place this year. Although its score hasn't dropped dramatically (its final score last year was 86, compared with 82 this year), a few points are worth making.

Its economic performance over the past year has slowed slightly, and this is reflected in our Index (it gets an Economy score of 90 this year, compared with its 92 rating last year). According to the OECD (www.oecd.org), "with the gradual withdrawal of monetary and fiscal stimulus and much higher oil prices, growth has slowed slightly as output has approached capacity limits and inflation pressures have begun to build. Although the impact of Hurricane Katrina is still subject to substantial uncertainty, prospects for a soft landing are good. Nonetheless, policy action in some areas would be helpful in unwinding imbalances that have emerged and sustaining favorable economic performance."

More than the current economic uncertainties, though, it is the ongoing and increasing infringements of personal freedoms in this country that account primarily for its fall from first place in our Index. While other First World countries receive the top score of 100 in our Freedom category, the U.S. gets but 92 points.

The United States remains, inarguably, the world's most convenient place to live. But, we argue, and our Survey this year maintains, that convenience is not the most important factor in determining any country's quality of life.

quality of life? For some, it's climate…for others, economic stability. For our Index, we take into account those categories, plus heath care, infrastructure, climate, cost of living, safety, and recreational opportunities…all factors we believe are important to the quality of life any country offers its population.

Every year, to create the rankings for each of these categories, we rely both on official government figures and published statistics, of course…but we also factor in the experiences of our correspondents from around the world. We all know numbers lie…or, at least, often mislead. So we try to go beyond the figures to the real-life experiences of our editors, correspondents, and friends living and spending time around the world.

The world's best place to live?

But France?

Well, yes…France. Good climate, unspoiled countryside, world-competitive infrastructure, plus the best health care in the world, according to the World Health Organization's (www.who.org) recent study

The culture is top-notch. UNESCO has named 30 World Heritage Sites in this country (by comparison, Italy, with 40, has the most cultural and heritage sites in the world). And its capital, Paris, is arguably the world's most beautiful and romantic city on earth. France sees in excess of 70 million overseas visitors each year, making it the world's favorite destination.

And, while no one would confuse France for a bargain destination, living here needn't cost the earth. France scores 65 in our Cost of Living category, and, outside Paris, the cost of living can be relatively inexpensive.

The cost of living in the world's best place to live

Following are samples of food items from Carrefour, a typical chain supermarket in France, and a market on Rouen's Place du Vieux Marché with adjoining butcher and fishmonger shops. You can check the costs of other supermarket items on these websites: www.carrefour.fr or www.ooshop.fr

Dairy products: milk-76 cents per liter (approximately 2 pints); Pont l'Éveque cheese-$2.34 per pound.
Bread: baguette-69 cents; olive-stuffed baguette-$1.
Vegetables: haricots verts (green beans)-$1.49 per pound; tomatoes-$1.14 per pound; onions-37 cents per pound; new potatoes-70 cents per pound; artichokes-90 cents each; green asparagus-$6.80 per pound; carrots-65 cents per pound; mushrooms-$2.20 per pound; zucchini-$1.25 per pound.
Fruit: French raspberries-$1.58 per pound; Spanish strawberries-80 cents per pound; cherries-$3.20 per pound; oranges-$1.75 per pound; peaches-$3.55 per pound; golden delicious apples-$1.05 per pound; grapes-$4 per pound; coconuts-$1.20 each.
Meat: rabbit-$3 per pound; chicken-$3.08 per pound; joints of lamb-$3.49 per pound; beef entrecote-$7.33 per pound; pork fillet-$4.29 per pound.
Fish: plump black mussels-$1.43 per pound; oysters-$3.80 per pound.
Sundries: eggs-99 cents for 10; filter coffee-from $3.62 per pound; farm cider-$2.90 for a liter bottle; Alsace Sylvaner wine-$2.20 per bottle; Muscadet wine-$1.61 per bottle; Bourgogne wine-$4 per bottle; Corbières wine-$3.38 per bottle

A different way of doing business

France scores sixth highest in our Index in the Economy category. Nightmarish bureaucracy, endless vacations, strictly regimented weekly business hours, workers who go on strike at the drop of a béret, a tax burden that accounts for 45% of GDP...French ways are not the same as American ways. Yet, somehow, France survives, and the economy is on the up. Although it may be hard to believe the next time you're stranded at Charles de Gaulle airport because the baggage handlers are again en greve, this is the country that introduced the word "entrepreneur'' into the English language.

The world's fourth-largest exporter, France has a per-capita GNP of $26,300, and inflation stands at just 2.2%. The French economy has a lot going for it-including ultra-modern transport and communications systems...competitive energy costs...and a AAA credit rating.

As well as exports such as perfumes, cosmetics, top-quality wines, and gourmet foods, the country's traditional muscle lies in engineering and transportation. Some engineering talent has recently been lured into the glitzy world of web ventures, but the metal-bashing industries still attract top graduates.

The country now has 4,000 international corporations, accounting for 26% of French jobs, 33% of investment, and 36% of exports in the country's manufacturing sector.

Embedded at the strategic heart of the European Union, France exports almost twice as much as the United States in terms of GDP. Major U.S. companies, such as Disney, IBM, Motorola, and Ford, have French addresses. In total, almost 2,000 North American firms have their European headquarters on French soil.

Add to all this that excellent infrastructure I mentioned already, and you can understand why we'd name France the world's best place to live. For more information on life in this country, e-mail our office in Paris at: France@InternationalLiving.com.

In second place…

Switzerland always scores high in our Index, and this year it rises from the fourth-place position it held in last year's survey to take silver. Boasting a stable economy (it scores top marks in this category) and infrastructure that is renowned for its reliability and efficiency, Switzerland is also a beautiful country. Who isn't charmed by the thought of a cozy alpine chalet or an elegant apartment overlooking a mirror-calm lake? Generally, the standard of living in this country is high, the crime rates are low, and the currency is one of the world's strongest.

The 10 most popular countries in the world for travelers
(Rounded off to the nearest million)
Country Most tourist arrivals in 2005
1. France 77 million
2. Spain 52 million
3. United States 42 million
4. Italy 40 million
5. China 37 million
6. United Kingdom 24 million
7. Canada 20 million
8. Mexico 20 million
9. Austria 19 million
10. Germany 18 million
Source: The Economist Pocket World in Figures, 2005.

Switzerland, of course, like France, isn't a bargain destination…but it isn't only for the mega-rich either. Although there are restrictions to where and what you can buy, you don't have to be a resident to own a Swiss home. Nor do all properties cost upward of $1 million. In mountainous French-speaking Switzerland, around the Villars-sur-Ollon area, bijou studio apartments sell for as little as $150,000 or $200,000.

At home in Switzerland?

Switzerland's immigration laws are tough. With immigration quotas in place, obtaining a residency permit to allow you settle permanently in Switzerland isn't easy.

That's not to say you couldn't buy a vacation home in certain parts of Switzerland and enjoy the benefits of a life in Switzerland at least part of the year. Providing the local commune of a canton grants its authorization, you, as a non-national, are allowed to own one apartment or chalet with up to 2,150 square feet of habitable space. You can rent it out as a holiday let-and also live there yourself for up to three months at a time. Most non-EU nationals can stay up to six months in any one year.

According to the Swiss Embassy, "Foreigners who do not wish to engage in a gainful activity (work) and do not intend to study in Switzerland may stay for a period of up to three months without a residence permit. Visitors who travel to Switzerland on a regular basis, but stay for less than a three-month period each time, must apply for a permit if their total stay exceeds six months within a 12-month period."

Without huge amounts of wealth at your disposal, though, a residency permits can be difficult to obtain. If you don't meet the financial requirements for residency, you must be over 60 years of age, retired, and show some close links with Switzerland to be considered. For more information, contact the Embassy of Switzerland, 2900 Cathedral Ave. NW, Washington, DC 20008; tel. (202)745-7900; website: www.eda.admin.ch/washington-emb.

What cost the Swiss life?

With an average after-tax income of around $48,000 per year, Swiss residents are among the world's wealthiest citizens. Even humble cleaners command hourly rates of $15 to $20.

Brasseries and restaurants offer a lunchtime "plat du jour" (dish of the day) typically for less than $15 per person. Come evening, however, it's a la carte, and you're talking serious money, even in modest brasseries. A main dish can cost $30; dessert, $7; a bottle of wine, another $30. It can take determined foraging even to find a pizza for less than $12. Average price for a coffee is $2.60; for a small beer, $3.80. By small, we mean 33 cl.-three mouthfuls, and it's gone.

The good life Down Under

Rounding out our top three this year is Australia, which takes the bronze.

With its year-round sunshine and great big outdoors, Australia offers an active lifestyle. Plus, as an American, you still get value for your greenback. As we go to press, $1 buys you $1.35 Australian dollars.

The most expensive countries in the world

U.S = 100 (see source)
1. Japan (138)
2. Norway (123)
3. Denmark (116)
4. France (116)
5. Hong Kong (113)
6. Switzerland (109)
7. United Kingdom (109)
8. Iceland (106)
9. Austria (104)
10. Finland (103)
11. Netherlands (100)
12. Sweden (99)
13. Singapore (98)
14. South Korea (97)
15. Germany (95)
16. Ireland (94)
17. Australia (93)
18. Belgium (93)
19. Russia (92)
20. China (90)
Source: This cost of living index is compiled by the Economist Intelligence Unit (www.economist.com) for use by companies in determining expatriate compensation: it is a comparison of maintaining a typical international lifestyle in the country rather than a comparison of the purchasing power of a citizen in the country. The index is based on typical urban prices an international executive and family will face abroad. The prices are for products of international comparable quality found in a supermarket or department store. Prices found in local markets and bazaars are generally not used. New York City prices are used as the base, so United States equals 100.

The cost of living is relatively low (Australia scores a decent 65 out of 100 in our Index), and the country's economic performance has been the envy of the world for more than a decade. According to The Economist (www.economist.com), Australia is now the only major economy to have a bi-lateral free-trade agreement with America, while also actively discussing one with China. Plus, John Howard, Australia's prime minister, has brought down the cost of the health service by providing sensible subsidies for private health insurance. (Mr. Howard was elected prime minister of Australia for the fourth time in October 2004.)

Considering the quality of life offered by the world's top 38 cities, Mercers survey in 2005 rated five of Australia's cities as tops. They are, in order of the highest rating in this survey: Sydney, Melbourne, Perth, Adelaide, and Brisbane. (Source: www.mercershr.com.)

The Real Estate Institute of Australia cites the median house price in this country at US$278,000. But, remember, this is an average. Properties around the country, particularly in the Northern Territory, can be had for much less. See: www.reia.com.au.

Having lived in Australia for a year, I would have stayed permanently but for its distance from home in Ireland. All other attributes of this country appealed greatly to me, not least the weather. From the States, proximity is also a drawback-it's a 14-hour flight from Sydney to Los Angeles.

Another antipode outpost, and coming fifth in our Index this year, is Australia's neighbor, New Zealand. Although this country is not as cheap as it was five years ago, the American dollar is still holding its own against the Kiwi dollar (US$1 equals 1.44 New Zealand dollars).

The best cities in the world to live
1. Geneva, Switzerland, 106.5
2. Zurich, Switzerland, 106.5
3. Vancouver, Canada, 106
4. Vienna, Austria, 106
5. Frankfurt, Germany, 105.5
6. Munich, Germany, 105.5
7. Dusseldorf, Germany, 105.5
8. Auckland, New Zealand, 105
9. Bern, Switzerland, 105
10. Copenhagen, Denmark, 105
11. Sydney, Australia, 105
Source: www.finfacts.com. Cities were ranked against New York as the base city, which has a rating of 100.

Again, the downsides of living here include its distance from the States (a 12-hour flight) and, unless you are young and qualified in certain trades, the restrictions on foreign residency. For more information on the rules for establishing residency in New Zealand, contact Malcolm Pacific, website: www.malcolmpacific.com.

Northern Europe

Austria, Denmark, Sweden, and Finland all rank in our top 10 this year. While these countries score high in our health care, infrastructure, safety, freedom, and economy categories, they lose points on climate and cost of living. No way round it: These countries are expensive. In fact, Norway, Denmark, Austria, and Finland are among the top 10 most expensive countries in the world.

Plus, if you lived here, you would have to endure long, dark winters. In Denmark and Finland, for example, you would have to suffer through days of close to 24 hours of darkness in the depths of winter.

Rags to riches

What of International Living's adopted homeland, Ireland?

While it won top honors in The Economist's Quality of Life survey this year, which rates 111 countries worldwide, weighted categories such as health, freedom, unemployment, family life, climate, political stability and security, gender equality, and family and community life, we (yes, we'll admit, ironically) rank Ireland 40th in our own.

Chasing the money: where to earn the most

Mercer's 2005 International Geographic Salary Differential Report (www.mercerhr.com) reveals that the United States has dropped out of the world's 10 highest paying countries. The depreciation of the U.S. dollar is an undoubted factor, but the unwelcome reality is that the United States only ranks 20th in terms of overall gross pay.

When all positions are taken into account-from management down to general laborers, the world's highest ranking country for pay rates is Switzerland. On a gross pay basis, nine out of the top 10 countries are in Western Europe, with Japan in Asia ranking fourth.
1. Switzerland
2. Germany
3. Denmark
4. Japan
5. Norway
6. Austria
7. Belgium
8. Ireland
9. Netherlands
10. United Kingdom

Of course, gross pay is not the same as net pay-the money you take home after taxes. High salaries do not always equate into high purchasing power when you take into account the cost of living as well. For example, Mercer points out that Australian and Japanese managers have equal purchasing power, even though those in Japan earn almost $10,000 more a year on average. And when it comes to purchasing power, the U.S. and Canada still fare well against Scandinavia and many other European countries.

Even so, when Mercer examined the average salaries of senior managers and calculated their purchasing power based on tax, social security deductions, and the local cost of living, Switzerland still came out top.

Its purchasing power ratio analysis evaluates how many times an upper middle manager can purchase an identical basket of goods and services. The ratio figures below show selected countries' purchasing power as a multiple of Vietnam's. This was the country in Mercer's survey where purchasing power for managers is the lowest. Average annual gross salaries are in U.S. dollars.

Country

Annual Gross Salary

Purchasing Power Ratio

Switzerland

$180,793

5.3

Hong Kong

$123,264

5.2

Germany

$146,437

4.8

Canada

$106,670

4.3

Austria

$137,451

4.1

Japan

$118,220

3.9

Ireland

$116,698

3.9

Australia

$108,718

3.9

Spain

$108,461

3.9

On an average salary of $87,536, the survey calculated that the ratio of managerial purchasing power in the U.S. was 3.4 as opposed to Vietnam's multiple of 1. You could earn more money in Denmark ($132,822), but personal income tax, social security contributions, and high cost of living decimate the purchasing power ratio-Denmark only rates as 2.8. Certainly in Europe, the worst place for managers to be is Latvia. Average salary is $38,001, but purchasing power is only 1.4.

It's a matter of priorities. Our survey considers cost of living, climate, and infrastructure as key to a good quality of life. Ireland ranks poorly in all these categories. Indeed, we rate it the second most expensive country on earth, more affordably only than Japan.

Beware the drivers

Following are the 20 worst countries in the world for traffic accidents:
Malawi, Rwanda, South Korea, Costa Rica, Kenya, India, Honduras, Egypt, Sri Lanka, Portugal, Morocco, Turkey, Hong Kong, Japan, Kyrgyzstan, Colombia, Latvia, Italy, Canada, and Czech Republic.
Source: The Economist Pocket World in Figures, 2005.

Ireland is a great place to live if you value picturesque landscapes and family values above all else (and maybe you do). If, though, you're looking for good in-country airline connections, fast trains, or a sophisticated banking industry…you'll be disappointed and frustrated in the Emerald Isle.

Likewise, if sunshine matters in your life…you'll want to consider elsewhere.

On the other hand, we are as impressed as anyone by Ireland's recent rags-to-riches metamorphosis.. In the '60s, '70s, and '80s, the population dwindled as people emigrated (mostly to the States) in search of a better quality of life. Today, the unemployment rate is 4.2%, and many new and hopeful E.U.-member countries are looking to Ireland for advice on how they can improve their economies, as Ireland did.

Where to buy your international health insurance

The following companies offer international coverage:
* AllNation Insurance Company, www.allnation.com
* Bupa, www.bupa.com
* InsuranceToGo, www.insurancetogo.com
* Expacare International, www.expacare.net
* IHI Danmark, www.ihi.com
* Goodhealth Worldwide Ltd., www.goodhealth.co.uk

The World Health Organization (www.who.org) carried out an analysis of the world's health systems. Using five performance indicators to measure health systems in 191 member states, it finds that France provides the best overall health care, followed among major countries by Italy, Spain, Oman, Austria, and Japan.

The report also found that the U.S. health system spends a higher portion of its gross domestic product (GDP) than any other country, but ranks 37 out of 191 countries according to its performance. The U.K., which spends just 6% of gross domestic product on health services, ranks 18th. Several small countries-San Marino, Andorra, Malta, and Singapore are rated close behind second-placed Italy.

Other findings in the annual WHO report include:
· In Europe, health systems in Mediterranean countries such as France, Italy, and Spain are rated higher than others in the continent. Norway is the highest Scandinavian nation, at 11th.
· Colombia, Chile, Costa Rica, and Cuba are rated highest among the Latin American nations-22nd, 33rd, 36th, and 39th in the world, respectively.
· Singapore is ranked 6th-the only Asian country apart from Japan in the top 50 countries.
· In the Pacific, Australia ranks 32nd overall; New Zealand is 41st.
· In the Middle East and North Africa, many countries rank highly: Oman is in 8th place overall, Saudi Arabia is ranked at 26th, United Arab Emirates, 27th, and Morocco, 29th.

Healthy living-where you'll live the longest
1. Andorra 83.5
2. Japan 81.6
3. Sweden 80.1
4. Hong Kong 79.9
5. Iceland 79.8
6. Cayman Islands 79.7
7. Canada 79.3
8. Spain 79.3
9. Australia 79.2
10. Israel 79.2
11. Martinique 79.1
12. Switzerland 79.1
13. France 79.0
14. Faroe Islands 78.9
15. Macau 78.9
16. Norway 78.9
17. Aruba 78.8
18. Belgium 78.8
19. Italy 78.7
20. Austria 78.5
Source: The Economist Pocket World in Figures, 2005.

The bottom 10

The lowest-scoring countries this year are: Laos, Pakistan, Djibouti, Afghanistan, Haiti, Saudi Arabia, Yemen, Somalia, Sudan, and Iraq. All, though, receive good scores in our Cost of Living category, making the point that a country can be cheap…but still not a place you'd want to live.

Accompanying this article are the final scores for all 193 countries considered in our Survey. To see the complete scores for every country in every category, please read on.