“A financial panic is again gripping some of the world’s developing economies,” according to an article in The New York Times.

This is in sharp contrast to the climate in the U.S., the article reports, “where a nearly decade-long bull market continues amid buoyant economic conditions.” It adds that this has occurred before (citing the Mexican peso crisis of 1994, the Thai baht collapse of 1997 and Russia’s 1998 default), adding, “investors had to contend with spillover of trouble from one country to others, dragging down economic growth or causing market stress.”

The article underscores the economies of Argentina, Russia, South Africa and Turkey as those that are “facing the maelstrom,” citing the following contributing factors:

• Argentina: Investors were already nervous because of past crises, the article says, recalling how the country has spent much of the past twenty years “locked out of global markets in the aftermath of its 2001 meltdown.” Although it was finally able to regain access to global money in April 2016, the article reports, the honeymoon ended this year when a drought hit soy and corn production, two markets crucial to the country’s economy.
• Turkey: Over much of the past decade, Turkey’s economy has enjoyed a strong run, but the article notes that “much of that economic pep depended on a debt-fueled bubble. Turkish companies have binged on bonds, much of them denominated in the dollar and the euro.” It adds that President Erdogan’s government has been spending generously, “subsidizing big-ticket infrastructure projects,” and the debt has rendered the “collapse of the Turkish lira particularly problematic.”
• South Africa’s economy, the article says, “has long been one of the world’s more precarious,” although in recent years it has benefited from an influx of foreign money, much of which has been used by the government for large-scale social spending to offset what the article describes as the “nation’s stark inequality.” As a result, external debt has surged to about 50 percent of the country’s GDP. The South African rand is down by about 18 percent this year, the article repots, with second-quarter data showing the country is already in a recession.
• Russia: “As global investors factored in the country’s increased isolation from the world economy,” the article says, “the ruble fell 18 percent this year. (Simply put, less integration and trade with Russia mean less demand for ruble, which you need to buy Russian goods.)”

The article concludes that it’s difficult to know whether these countries are suffering from “unique vulnerabilities” or whether other countries will become the “next focus for jittery investors eager to avoid losses.” There are many factors at play, including interest rates, reliance on foreign borrowing, refinancing needs, government deficit levels and stockpiles of foreign currency.