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The emerging markets are looking more submerged with each passing day, as investors fret about anything carrying even a sniff of risk. This collective case of nerves, which has been building for a while, has forced harried monetary officials in Turkey and a handful of other countries to intervene to shore up battered currencies and driven emerging equities to their worst January performance since the height of the Great Recession in 2009.

The deep chill has also intensified the markets' focus on this week's Federal Reserve policy meeting – more tapering will mean more turmoil – and on any negative news out of China, the one emerging country capable of soothing or shattering investor nerves all by itself.

Still, this is not a repeat of the 1997-98 Asian currency crisis. It began with the sudden collapse of Thailand's currency, after the government removed its peg to the U.S. dollar, and quickly spread to other troubled parts of emerging Asia before hammering Brazil and Russia and hitting global trade and capital flows. Before it had run its course, Asia's biggest private investment bank collapsed and a multi-billion-dollar U.S. hedge fund blew itself up. Japan slid into its first recession since the mid-1970s and Alan Greenspan's Fed headed down a low-interest-rate path that would soon fuel new asset bubbles.

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The Asian crisis, which engulfed both mismanaged and better-run economies, was the culmination of nearly two decades of heavy short-term foreign borrowing at relatively high interest rates by governments across developing Asia and Latin America. Typically, the borrowing was done in U.S. dollars and occasionally other hard currencies, which ultimately proved punishing when their local currencies plunged and bills came due. It was bad financial policy compounded by ambitious development goals and a lack of available capital from cheaper sources.

Many policy makers learned from their painful mistakes – the IMF imposed some harsh measures in exchange for bailouts – and managed to reduce their reliance on external debt, aided in large part by a flood of more stable capital in the form of direct foreign investment and portfolio equity. Most emerging countries are in far better financial and fiscal shape today, apart from a handful of basket-cases, like Venezuela, Argentina and Ukraine, and others with worsening current account gaps, including Turkey, Indonesia, Chile and South Africa.

Panic about a new emerging markets crisis "ignores the fact that over the past decade or so, the emerging world is a much more diverse place," Neil Shearing, chief emerging markets economist with Capital Economics in London, tells me. "What matters for some emerging economies doesn't matter for others."

He lists five countries with improved prospects: South Korea, Philippines, Mexico, Poland and the Czech Republic. But he lumps China, the most critical of all, with fellow BRIC members Brazil, Russia and India as markets with internal structural problems. Which is putting it mildly.

As analysts repeatedly counsel, treating all emerging markets as if this is another one-size-fits-all crisis in the making is a mistake – provided your investment horizon is, say, at least three to five years. But in the short run, when the storms rage, even the safer assets get wet.

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