Currency crises in industrialised countries do not translate in this way. But in developing countries, a currency turmoil often translates into a financial crisis and recession. The main reason is that developing countries are debtors and their foreign assets are in the red. Taiwan was in the black, and that was why it was protected. Secondly, developing countries are small.
Capital going in and out can cause havoc.
One or two institutional investors can leave and the developing country concerned is in trouble. Thirdly, developing countries are more dollarised than industrialised countries, and the share of dollars in bank deposits is greater in the South than in the North. Again, this makes developing countries more vulnerable. We cannot delink from the financial system as we need finance in order to trade. We have to integrate, but manage it well, so that we do not get into trouble.