It used to be common for dealers on black markets in Third World countries to offer money at three or more times the official rate. Nowadays, however, most such countries have black market rates of only ten to 20 per cent higher than the normal rate. Buyers should always weigh up the risk before dealing, remembering that in black market operations the traveller, just as easily as the dealer, can end up in prison. In countries recently ravaged by war or coup d'état, black markets usually continue to thrive at good rates.

Dollarmania

Black markets usually operate best in ports; where money can be easily smuggled out and goods back in and where, with the help of baksheesh to customs officers, nobody in government pay needs to know, or admit to knowing. However, a quasi black market is operated by expatriate technicians working in oil fields or international aid or construction programmes. Paid part of their salary in local currency, usually more than they need to live on, they are keen to get rid of some of it in exchange for US dollars, at a good rate to the buyer.

In much of Islamic Africa and the poorer Middle Eastern countries, you will also find Egyptian, Sudanese, Syrian or Palestinian teachers, employed in smaller villages, who are very keen to convert their local salary into US dollars.

Another method of dealing, common in countries where businessmen do not feel safe and cannot get their money out legally, is for businessmen or hotel owners to 'lend' you funds locally, which you repay in hard currency into a relative's bank account in the West. Those who travel regularly often arrange this in advance before departure; but local businessmen will take a risk on unfamiliar travellers, if they are reasonably dressed and staying in recognised smaller hotels, because their own local currency is worthless to them.

Even in large top-quality hotels, cashiers will often take payment in hard currency at near-black market rates, if the customer pays them outside of the manager's normal working hours.

Travellers should particularly avoid street dealings, as they are more likely to be short-changed, given bad notes, caught in a police 'sting' operation or robbed.

On-the-spot black market deals nowadays are always for cash and mostly for US dollars. A few countries with strong links and trade with the UK or Germany will trade in pounds sterling or deutschmarks, but other currencies, even strong ones such as the Swiss franc or Dutch guilder, will find few black market buyers. Deutschmarks go down well in Turkey, pounds sterling in Pakistan, India, Mal-aysia and Nepal, but elsewhere the US dollar is the prime requirement.

Normally, larger denomination notes fetch a higher rate, as they are easier to smuggle out. Avoid the older 100 bills that do not have 'In God We Trust' written on them: even though they may not be forgeries, most dealers will not touch them. Also avoid English £50 notes, which may be unknown to smaller dealers. It is worth carrying a number of 1 bills to pay off small bills and give as tips. Even for normal legal transactions, many countries now insist on clean, unmarked notes, i.e. those without any writing on them that is not part of the original printing.

There is no longer any problem in taking money out of the UK, so it is best to buy US dollars or US dollar travellers' cheques before you leave. Many countries are not happy about accepting American Express travellers' cheques and most will not accept those from smaller, less-known Australian or New Zealand banks.

Declaration forms

Many countries with black market problems insist on a declaration of all money and valuables on entry and check this against bank receipts on exit. Remember, you may be searched on entry and exit, and any excess funds will be confiscated.

If you want to take in some undeclared money to use on the black market, you should understand the risks. Obviously, you must change a reasonable amount of money legally at a bank and keep receipts so that you will be able to explain what you have lived on during your stay. You will also need these receipts if you are trying to change local currency back into hard currency when you leave. It is usually inadvisable to try to do so, however, since most countries make it very difficult for you, despite the literature claiming that you can.

Local officials, who probably don't read the literature, like to remove your excess local money and keep it for themselves. The bank clerk who tells you he cannot change your money back is often in on the act. He informs the custom officials how much money you have and they, acting on his tip-off, search you as you leave.

On the plus side, allowing officials to remove a reasonable amount of money from you at the point of departure often minimises further red tape.

Currency declaration forms are taken very seriously in some countries and you must have an explanation for any discrepancy. Make sure that the amount written agrees with the amount in figures. If any money that has been entered on your form is stolen, get a letter giving details from the police, or you may have trouble when you wish to leave the country.

Some countries get around some of the black market by making you pay for hotels in hard currency, at the official rate.

In such hotels you can usually get away with paying for meals with black market cash, so long as you pay for it at the time. If you sign a restaurant bill to be paid for later, then you will be charged in hard currency. Corrupt hotel staff may refuse to accept cash payment in the restaurant, in which case you will be better off taking your custom to restaurants outside the hotel.

International airline tickets will always be charged for in hard currency, plus a premium ordered by IATA, to cover currency fluctuations. Hence, such tickets are much cheaper if bought in Europe. Internal air tickets can usually be bought with black money, but you may have to pay a local ticketing agent to do it in his name.

Beware of black market currency quotations by normally acceptable press outlets, such as the broadsheet Sunday papers, Newsweek and the BBC. These may be quoting from local sources, who have to be careful what they say publicly.

Street trading

Black market dealers are usually found in the places where budget travellers are most likely to be, for example, smaller hotels, bars and shops selling tourist items; in very small towns try the pharmacy.

In the main streets of a city or port, street traders will chase you and, assuming that you do not know the correct rate, will start with a very low one. It is usually worth bargaining to see how high a rate you can get, then approach safer places, such as small hotels, to check the real rate. Street trading is very risky: you should never show that you have a lot of money. There is a high chance that you will be short-changed, given notes that are no longer legal tender, have money stolen from the bundle by sleight of hand, see all your money grabbed and run off with, or meet one of those dealers who has a crooked, profit-sharing partnership with the police. So, in general, show only the amount of money you want to exchange and keep all other money out of sight, beneath your clothes.

Refuse any approaches to buy your passport or travellers' cheques. This kind of trading has become so common that many embassies delay issuing fresh passports to travellers who, may or may not, have genuinely lost their own. Getting travellers' cheques replaced in the Third World can take months, as can funds wired to banks or American Express offices. Never rely on receiving hard currency transferred in this way, you are likely to be forced to accept local currency.

Black market rates fluctuate with both inflation and availability. Rates will increase dramatically in the Islamic world, when the time for the annual pilgrimage to Mecca (the hajj) approaches, and decrease rapidly when the pilgrims return, or when a lot of upmarket travellers are in town, or a cruise ship or fleet ship is in port. Dealing out of season usually commands a better rate.

Central London banks often carry an excess of Third World currency and one of their branches may be happy to off-load a weak currency at a good rate. It is always worth checking whether this is so before you buy; but remember that the bank notes may no longer be legal currency.

Wherever you are, always check that you have not been short-changed. Bank cashiers try this on regularly, in the Third World. Many people end up changing on the black market, just because it can take up to two hours to change money legally in some countries. Currently, the black markets of the Balkans, the eastern European states and the Commonwealth of Independent States are strong. Many of these nations are technically bankrupt, have rampant inflation, pay their employees with unredeemable money and are changing their currencies. And you must be careful not to be given out-of-date banknotes. In Uzbekistan, when I legally changed US4 for local currency, I was given a wad of newly printed 'Monopoly money' tencm thick.

The best way to travel in countries such as these, or those with high rates of inflation, is to carry a large number of small-denomination US dollar bills, change a little at a time as you go along and, where possible, pay for everything in US dollars, so that you do not collect worthless change. UK banks do not like holding US1 bills, so give them plenty of warning when ordering currency and stipulate clean, unmarked notes.

Beggars

Begging is probably the world's second-oldest profession. In the Muslim and Hindu world, giving a percentage of one's income to the poor is considered to be a legal form of paying tax. However, with the increase of mass up-market tourism, begging is becoming an increasingly popular way of making a living, not only among the obviously poor people of the Third World, but also among Western hippies and some better-dressed, professional confidence tricksters, who claim to be refugees. This form of begging is now common on the London Underground.

In some countries beggars are very persistent, knowing full well that wearing you down produces results. Mere persistence may not be too hard for you to repel, but worst of all are the young children, often blind or with deformed limbs, who are guaranteed to arouse your pity.

What you may not realise, however, is that the child may have been intentionally deformed or blinded by its parents or 'master' in order to make a successful beggar. The child is almost certainly encouraged by his family or ringleader to beg and may be the chief source of their income, since the child beggar can perhaps earn more in a day than his father working in the fields or factory. Remember that a child who is out begging is necessarily missing school.

An adult with no education or experience, other than begging, tends to be less successful than a child beggar. What are his options? Crime, if he is fit, destitution if crippled. Begging is obviously easier than work, but to give money is to contribute to a vicious circle. By withholding money, you may indeed be helping to eradicate these appalling practices.