South Korea

South Korea is steadily shouldering its way into the big league when it comes to costs - Japan is about the only place that's still more expensive. If you're staying in a hostel or a traditional Korean inn, you might be able to get by on US$30 a day. If you're planning to travel around and would prefer more luxurious accommodation, you should expect to spend significantly more. As for sustenance, the nightlife in Seoul will dig into your coffers, but food is generally quite cheap - US$7 should fill you up. Travelling will up your spend, but happily Korean transport is both efficient and reasonably priced. A high-speed train runs the length of the country and a ticket on this only costs US$40.

US military bases will let you pay in US dollars (should you feel the need to pick up a stealth bomber or two), but everywhere else you'll need won. Cash US dollars are the easiest to exchange, but any other hard currencies, especially yen, shouldn't pose a problem. You'll get a better rate on travellers cheques than cash - those in US dollars will be more widely accepted. There are ATMs all over Seoul, Busan and other major cities, but the instructions are in Korean. International credit cards are widely accepted.

South Koreans don't expect you to tip, particularly as a 10% service charge is added to the bill in many mid-range and all top-end hotels. You'll be wasting your time bargaining in department stores - you'll have about as much chance as you would in K-mart - but you might as well give it a go in small shops and markets. Even fancy-looking tourist shops will usually bend a little on their prices. If you're going to haggle, be polite, smile and don't get grumpy.

South Korea has witnessed an amazing rags-to-riches story over the past four decades. The man to thank for this economic miracle is former dictator Park Chung-hee who ruled the country from 1961 until his assassination in 1979. His 'government-guided management' model of five-year plans and 'export or die' programmes involved paying low salaries at home, restricting imports and borrowing billions of US dollars in cash (mostly from the USA). Within a decade, South Korea's economic indicators went through the roof and the country joined Hong Kong, Taiwan and Singapore as one of Asia's 'economic tigers' (also called 'little dragons').

Unfortunately, 'government-guided management' was a two-edged sword. Unlike the other tigers, the South Korean economy was directed by a swelling civil service. In time, the bloated bureaucracy came to control everything from the flavour of ice cream to the price of ginseng. In recent years there has been a sincere effort to slay the red-tape dragon, but the bureaucrats are being wrenched from their desks kicking and screaming.

A key feature of Korea's economy are the jaebeol, huge family-run conglomerates that owe their survival to government-subsidised bank loans. The tight-knit relationship between the jaebeol and government officials has led to more than a few indictments for corruption, and has made the phrase 'Korea, Inc' more of a truism than the more commonly known 'Japan, Inc'. Officially there are 30 jaebeol. The top five, Hyundai, Samsung, Daewoo, LG (Lucky Goldstar) and SK (Sunkyong), account for more than a third of the total sales of all South Korean companies and 50% of the country's exports. In 1997, Asia lurched into an economic crisis, and South Korea was badly affected. As a direct result, President Kim Dae-jung has launched a number of bold reforms aimed at reducing the power and influence of the jaebeol. The reform process - still not complete - promises to restructure South Korea's economy considerably.

Sharply increasing wages is another big change of recent years. From the late 1980s onward, the country has often been rocked by large and occasionally violent strikes. Nowadays, South Korea is no longer considered a low-wage country. Many companies have responded by moving factories to China, or by hiring illegal immigrants to do the drudge work. It's a scene not unlike that found in many developed Western economies.

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