If you know anything about sailing, you know that the "set of your sails" means squat in a hurricane, which entirely determines which way you go, if you wish to surivive. Not all of Q's business is facing a hurricane of course, but the parts in Korea are:
From the South China Morning Post this am in Hong Kong:
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Sitting tired in his office, 36 floors
above the streets of Seoul, Kim
Yun-ho seethed with frustration.
''The economy is stuck,'' complained
Mr Kim, a trim young man in white shirt
and tie, surrounded by samples of the
pots and pans that his company
exports. ''Banks aren't lending or doing
business. It's the same with
companies. They're just firing people
and cutting costs. They've stopped
doing their business.''
He shook his head and added, ''The
economy just isn't working.''
That is a common complaint, for Seoul
today offers the remarkable spectacle
of a modern, industrial economy that
seemingly has come creaking nearly to
a halt. Glass-and-steel towers still
preside grandly over the broad
avenues, but business itself turns out
to be far more fragile than the buildings
in which it is conducted.
Above all, the financial crisis
underscores how the essence of
modern commerce is confidence, and
how computers and digital phone lines
mean little without it. In the last few
days the situation has stabilised a bit,
with the stock market moving up and a
hint of confidence creeping back, but
the uncertainties are so great that
commerce is still crippled.
The trade finance system has broken
down, the credit that businesses
depend on for working capital is
unavailable, nervousness is so great
that suppliers are unwilling to let go of
their goods unless they get cash, and
overall apprehensiveness is so
overwhelming that businesses are
extremely cautious about deals when
they do not know what exchange rate
or costs they are committing
themselves to.
All this could be reversed if confidence
returned, but for now the crisis has
ensnared even exporters whose
business should now be booming.
South Korea's depressed currency
means that each sale in dollars now
earns far more Korean won than it
would have earlier this year, so that
exporters can cut prices and still earn
bigger profits.
The breakdown of the trade finance
and credit networks, however, means
that even the exporters are finding that
for now they cannot take advantage of
their new competitiveness.
''It's very bad,'' said Jack J.C. Park, a
sales manager at Sam Won, which
exports everything from inner tubes to
hair dryers. ''Money has to flow in an
economy, but now it's stuck. It doesn't
move. The money doesn't move.
''People aren't getting paid by
customers. And even if they have land
or buildings, they can't sell them. And
they can't borrow from banks, because
the banks have no money. Many good
companies are going bankrupt,
because the money doesn't flow.''
If these export companies are having
difficulties, then the crisis is
incomparably worse among importers.
Imports now cost almost twice what
they did a few months ago, and trading
companies accustomed to opening a
letter of credit with a telephone call are
now finding that they have to visit the
bank and bring cash in advance.
''Our customers have cancelled all our
orders this month, except for a few
critical items,'' grumbled Kim
Young-tae, a manager at Hong Jin
Trading, which imports technical
materials for the steel industry. ''If the
situation goes on like this, we'll have to
fire some of our employees.''
His 12 employees, all within earshot,
tried harder than ever to look busy.
But, as Kim acknowledged, there was
no work to be done.
Few businessmen appeared to trust
the government, which repeatedly
dissembled about the size of the
nation's foreign currency reserves and
foreign debt, and business also lacks
confidence in the three candidates
who are running for president in
Thursday's election.
International banks do not trust Korean
banks and so have been reluctant to
roll over loans or even to arrange trade
transactions. Foreign investors feel
they have been lied to so many times
by Korean authorities that they are
afraid of new minefields ahead in the
coming weeks.
''Credibility is the most important factor
at the moment,'' said Lee Won Il, head
of research at KEB Smith Barney
Securities. ''At the moment, no one
really believes the government any
more, and no one has any idea about
the economic blueprint of the next
president.''
The stock market is a good gauge of
the mood, and it has hovered at a
10-year low, rising over the last few
days in hopes, no matter how
tentative, that the worst might be over.
Many people think that prices are at
bargain levels now, but corporate
disclosure is poor and so it is difficult
for investors to know whether they are
getting a bargain or simply a company
that is going bankrupt.
''There's no question that there's value
in the market at these levels,'' said Kim
Hun-soo, head of research at Merrill
Lynch in Seoul. ''It's just a question of
confidence.''
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