Developing countries need urgent help. The IMF is acting quickly, but it needs help, too.
First came the financial earthquake in the US and Western Europe. Now, the aftershocks are shaking the developing world. Countries from Ukraine in Eastern Europe to Pakistan in South Asia need urgent financial attention. Helping them requires a global effort.
It wasn't long ago that many of these countries – known as "emerging markets" in finance lingo – were thought to be immune to financial problems in the developed world. Their governments had decent balance sheets, had paid back international loans, and even stored up funds in "rainy day" reserves. In fact, they were being talked about as engines that could pull America and other wealthy countries out of recession.
But now they're suffering, too. Demand for their goods and commodities is drying up as the great consumer market of the world – the US – folds its wallet.
Even worse, jumpy foreign investors are pulling out of the emerging-market countries, and that's caused currencies in Brazil, Mexico, South Korea, Turkey, South Africa, Hungary, and elsewhere to plummet. With weak currencies as well as foreign capital on the run, banks and companies in such countries – and in some cases, governments themselves – are unable to borrow or pay off loans.