Friday, 19 June 2009

Purchasing Power Parity?

I think this post presents my recent ponderings on Purchasing Power Parity (PPP) – although I may have got that wrong! However, don’t be put off by the economic terminology; I’m going to talking about eating and shopping.

Last night we were in Split to pick up some friends. It was the first time we’d driven there from Mostar so we left extra time for the journey. We didn’t get lost some we did get to visit the Joker Centar – not a bad comedy club but a smart new shopping centre, with a McDonald’s. At this point I should come clean and say I don’t even like McDonald’s. In the UK, if it had to be fast food like that then I would pick Burger King or, preferably, KFC. Then, of course, there was also the, arguably, healthier option of Subway. But not having had any of the above in none months we thought we should take the opportunity to remind ourselves what we are ‘missing’.

As we sat munching some distinctly unimpressive fries I suddenly remembered we used to use the price of a McDonalds meal to make a rough comparison between currencies. For example: last night two meals cost 73Kuna. The exchange rate is approximately 8 Kuna to 1 GBP, meaning we paid a little over nine quid for two large ‘xtra value’ meals. That’s not unlike UK prices, as we remember them; certainly much better than McDonald’s we bought in Norway or Switzerland.

However, living overseas you start to see how this is a very shallow measure. Walking around a fancy shopping centre could give the impression Croatia is an affluent country on a par with any of Europe’s leading economies. But this is only half the picture. There are plenty of people who have money and can afford to pay, comparatively, more for the latest trends from Nike or Benetton or Topshop. But there are many who can’t. The same is true in Bosnia.

Add in the ice creams we had and last night dinner cost 93 Kuna, which is a little over 20KM. That we paid so much of a McDonald’s would be anathema to some of our Bosnian friends. (For that price we can get a decent meal in Mostar.) Going out for coffee is a big part of their culture but paying to eat out isn’t. And as firm believers in the supremacy of good ćevapi they would have been appalled by the quality of the soggy patty in last night’s burger!

3 comments:

Postgate said...

My memories of McDo in the Champs Elysee, a few years back, are of similar prices to the UK but a smaller product. And the toilets were bad! Paris is overpriced for food in any case; this we know from a recent visit. But the fact that McDo could sell the 'same' product, in a smaller size, for the same price as the UK was an eye-opener. They are not an asset.

Brit in Bosnia / Fraught Mummy said...

You know that The Economist runs a McDonalds index, where they compare the cost of a Maccy D's in many countries? It is interesting to see how it equates.

Can't see McD ever taking off here, like you say the Bosnians would look at the burgers and head straight for the cevapi.

Brit in Bosnia / Fraught Mummy said...

Don't hate me for this one - but you are tagged at mine - and for a recycling week challenge.