Which countries have the lowest cost of living changes each year, as prices rise and fall and economies grow or sputter. Historically, North America generally has a high cost of living, but there are other places in the world where costs are much lower. Many of these countries, like Iraq and Afghanistan, have struggled with war and political unrest, although this is not true in all cases. For example, the Gambia, a small country in West Africa, has one of the lowest costs of living in the world, according to International Living's 2011 Quality of Life Index, and a relatively stable political structure.
The cost of living is how much money it takes to afford basic necessities, like food and shelter, and maintain a certain standard of living. It is important to remember that a low cost of living often means a relatively weak economy; the Gambia relies heavily on peanut exports and has few other natural resources. Decades of sanctions, the overthrow of Saddam Hussein in 2003, and continued violence and corruption have left Iraq's economy devastated, despite the nation's oil reserves.
In South America, the country with the lowest cost of living is Bolivia. One of the region's poorest countries, Bolivia is largely divided between indigenous peoples who make up most of the population and a wealthy elite that has, until recently, controlled political life and the economy. The country has experienced several political crises, largely related to control of natural gas reserves, one of Bolivia's few natural resources.
The Marshall Islands, not far north of the Equator, also have a very low cost of living. Several of the islands were used for nuclear testing by the US in the 1940s and '50s, when the country was occupied by the United States, and some areas are still contaminated. Despite the possibilities for tourism, the country is still dependent on the US for support, and suffers high unemployment.
Having a low cost of living doesn't necessarily mean that a country would be a good place to live or visit. Even those countries that are relatively peaceful often have poor infrastructure, like a lack of paved roads or regular supplies of electricity, and limited access to services, including medical care. In many cases, the cost of living is low because of high unemployment and an uncertain economy.
There are a few countries with a low cost of living that would make for pleasant vacation destinations, however. Nicaragua, which suffered considerable political unrest in the 1980s, has enjoyed more economic growth since a 1990 peace agreement, and the tourism industry has had a rebound. The Marshall Islands offer warm temperatures, sandy beaches, and waters ideal for fishing and scuba diving.
The cost of living in the United States is lower than many people might expect, although of course it depends on where in the US a person lives. Most major cities, especially New York and Los Angeles, have a very high cost of living; cities in Texas and the center of the country tend to be less expensive. As of 2011, US cities with the lowest cost of living include Brownsville and Ft. Hood, both in Texas, and Pueblo, Colorado, according to Kiplinger.