Unfortunately, Third World governments are promising what they can't deliver. Under pressure from global financial institutions, virtually every South American and Asian government has agreed to permit full and free convertibility of its currency into US dollars and other major currencies. At the same time, they promise to stabilize their currencies against the dollar, so that global firms don't suffer losses when they convert their profits. However, convertibility and stable exchange rates are incompatible. When a country allows investors to buy and sell its currency, repatriate earnings or play the local stock exchange, it quickly loses control over its own money.
Speculators move in and set the exchange rate themselves.
Brazil is a case in point. The peg insured foreign investors against exchange-rate losses and protected the wealth of the Brazilian lite, who figure their worth in US dollars. The 'Real Plan' was supposed to set off an economic boom. Foreign investors would pour funds in and wealthy Brazilians, notorious for moving money overseas, would keep their money at home. For a time it worked.