Can [Mexico, Turkey] Withstand EM Selloff?

OK, here's the quick version of What's Going On in the World Economy. Despite the US jokeonomy failing to revive from comatose to, say, zombified as witnessed by the labor force participation rate falling with no end in sight, the rumor is that the Fed will further slow down its purchases of US Treasuries. In turn, expectations of higher interest rates Stateside is causing a selloff in emerging markets as investors repatriate their funds.

Who, then, is macho enough to weather this Made In America @&^*storm? Argentina is putting the pedal to the metal on the highway to hell, but it was headed in that general direction anyway. Hence the emerging markets' latest battle cry to all those who care to listen: Developing countries are not all alike! We're not Argentina! Or so they say from Davos, Switzerland.

Among those protesting most loudly there is Turkey, most likely because many commentators have lumped it with the "developing economies likely to falter" category. And so the lira goes...but not as far as the Argentinean peso, officials claim:

Turkey's Deputy Prime Minister Ali Babacan said the lira's tumble on Friday was a "re-pricing process" due to recent political turmoil as well as the U.S. Federal Reserve's plan to gradually withdraw stimulus.

"What's happening in Turkey mostly is a re-pricing process. Not only just because of the Fed's tapering but also the recent political events have triggered some market volatility," he told a panel at the World Economic Forum in Davos. Turkey's lira tumbled to new lows on Friday and investors doubted its central bank's ability to stem the rout as Prime Minister Tayyip Erdogan seeks to defuse a corruption scandal and stem a challenge to his power.

As an import-dependent economy with a quickly depreciating currency, I am unfortunately wary of Turkey's situation. OTOH, similar protestations about economic health are being made by Mexico:

The current volatility in currency markets will have some effect on Mexico, but without major disruption, Mexican Finance Minister Luis Videgaray said in an interview with Reuters Television. "Mexico is an emerging market, so all volatility is going to have some effect, but Mexico is well-positioned to weather the currency storm," Videgaray told Reuters TV on the sidelines of a gathering of business and political elites in this Swiss mountain resort...

Looking ahead, emerging markets are expected to face a volatile 2014 as the U.S. Federal Reserve scales back its stimulus programme. "We expected this year to be a volatile year for EM as the Fed tapers," he said, adding that volatility "will happen throughout the year as tapering goes on." The minister said Mexico's currency, the peso, was currently quite liquid. Should that change, Mexico would consider intervening, he said. "I don't see any problems of liquidity in the market for the Mexican peso," he said. "We would intervene to provide liquidity in the market, but this is not the case now; the peso is quite liquid now." 

Mexico has better macroeconomic fundamentals to withstand the EM selloff. Most importantly, it has a healthier balance of payments than Turkey, which has a gaping current account deficit it is (unsuccessfully) trying to belittle. Mexico will take its lumps, but I expect it to fare well among the EMs.