Best Countries for Vacation on a Shoestring

The focus here is on purchasing power parity (PPP) which is an economic technique used to determine the relative value of currencies against each other. In other words, PPP can be used to as an international comparison of income level. In order for one to use a common basket of good used by all countries in comparison for purchasing power. The measurement being most popular now are either the Big Mac Index or Starbucks tall Latte Index with the former being the most widely used. 

Why is this important? First, export driven countries have severely undervalued currencies. Second, rich and industrialized have just the opposite. The reason is simple, a weaker currency makes your exports cheaper and therefore promotes industries to make them but is bad for us the consumers because things are expensive especially those being imported. Ironically a balance has to be obtained. You can't keep undervaluing your currency as any imported inputs to make the exports becomes more expensive. Look at the Tiger Cub members whom are all export oriented economies; Malaysia (-44%), Indonesia (-45%), Philippines (-28%) and Thailand (-47%). 

If you live in Malaysia, best countries to visit when you have a tight budget are countries that do primarily exports but do not earn as much as we do (GDP per capita). Here's a rough spreadsheet and the numbers (source: CIA handbook). I excluded NA and Europe as they are rich industrialized. I excluded South America and Africa too as the high cost of flying there compensates for their weak currencies against us.

Countries that are developed (primarily services oriented more than >65%) certainly always have a strong currency. A strong currency also translates to better income levels. It is the basis of their economy just like we the exporters need weaker currency, they need a stronger currency in order for their economy to function. We as a nation needing exports to drive our economy will always be the underdog, that is unless we are able to move forward from manufacturing into services. The logic is pretty simple. Remember when Singapore first left The Federation of Malaya, their currency was at a 1:1 basis (during their manufacturing phase) and it slowly creep up to what is now at a ratio of ~2.5 and it's going to be higher. China's currency is not going to fly high anytime now. In fact they have a long way to go before catching up to any of the Asian Tigers, I reckon it's going to be 20 years or so, are you going to hold the Renminbi for 20 years? Go and visit Singapore next year while China can wait for another decade.

If you life's dream is to travel and see the many wonders of the world, I do hope that your plan does include either working in Singapore or Australia =) if not, well we have Google Earth.

Jenna Ho Pui Yu. 23 year old lass from Hong Kong.