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Emerging market strains remove props for global markets

PARIS, October 24, 2008 (AFP) - Emerging market countries, their once vibrant economies now under increased strain in the global finance crisis, can no longer be counted on help prop up world stock markets.

"The escalation of the crisis revealed or exacerbated existing vulnerabilities (in emerging countries), such as current account deficits, that were ignored when times were good, (when) capital was plentiful," wrote the RGE monitor newsletter, a publication of New York University professor Nourriel Roubini.

The International Monetary Fund has likewise highlighted the changed circumstances in emerging economies and has declared its willingness to help.

"The crisis is now hurting a lot of emerging markets," IMF Managing Director Dominique Strauss-Kahn said earlier this month.

"Many countries seem to be experiencing problems because of the repatriation of private capital by foreign investors or the reduction of credit lines from foreign banks.
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"We are ready to support these economies and we are in discussions with a number of them.
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Moody's analyst Christine Li pointed to Argentina, the Baltic states, Turkey, Hungary and Ukraine as among the most vulnerable emerging countries, "

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