For years developing countries have been thrice blessed. First, near-zero interest rates in the US drove investors into bourses from Mumbai to Mexico as they searched for higher returns. Next, China emerged as the trading partner of choice as it gobbled up Indonesian palm oil, Cambodian hardwoods, and Brazilian iron ore. Finally, with the exception of the Middle East, the politics of most emerging-market countries were stable. The blessings have run out. In the eight weeks through July 17 investors pulled $40.3 billion from emerging-market bond and equity funds amid signs that the US Federal Reserve may start scaling back its stimulus effort. Developing nations deprived of cheap funding from the capital markets are punished far more during downturns than rich nations with extensive social safety nets like the US or Europe. Like Indonesia, Brazil is a major commodity exporter suffering from China's slowdown. Both countries are raising interest rates to fight inflation, which could dampen growth even further.