The "white elephant" is a rare and sacred animal in the Far East, and in some cultures it symbolizes good omen, but it indicates different connotations in the economic world. When we describe a property or investment as a "white elephant", this means that it brings losses and exhaustion to its owner.
The meaning of the white elephant in the world of economics
The term "white elephant" refers to any investment or real estate that has a high maintenance cost, and in return does not achieve any benefit or significant material profits. .
Mostly, "white elephants" are illiquid assets, meaning that they are difficult to replace or sell for cash without suffering significant losses. Today, the term "white elephant" is used to refer to any unprofitable property, regardless of its type.
Etymology
The roots of the name go back to Asia, specifically to "Siam" known today as Thailand, as rare white elephants were sacred in that country in ancient times.
The cunning kings of Siam used to gift white elephants to the hated courtiers, as the white elephant is sacred in those countries, and therefore it is forbidden to work and its owner is not entitled to benefit from it in any way, in addition to that it must be pampered by giving it private land and providing special food for it and giving it a certain level of comfort The care that colorful elephants do not receive.
Hence, this elephant costs its owner a fortune on the one hand, and he cannot benefit from it in any way on the other hand.
The white elephant is a sacred animal in the Far East, but it has become a symbol of any investment or real estate with a high maintenance cost (French)
The investment turned into a white elephant
Many companies invest their money in property, facilities and equipment with the aim of using these fixed assets to improve the company's profits in the future, but changing economic conditions in the country can turn these assets into "white elephants".
If a company decides to build a factory to meet the market’s needs for a specific product, then fails to promote it, or the demand for it decreases for some reason, the factory will become a burden on the company, as it does not generate enough revenue to cover the cost of its maintenance, in other words, this factory will turn into an “elephant.” white".
The term white elephant has also been associated with development projects funded by governments with the aim of achieving rapid economic growth by allocating a lot of money for construction and infrastructure projects.
The problem with these projects is that they are designed based on the opinions and preferences of politicians and government officials to serve their material interests in most cases. The result is poorly designed and implemented projects, which soon turn into "white elephants" that consume money without the desired material profits for the state.
Examples of white elephants
Among the most famous examples of white elephants around the world:
Empire State Building
The Empire State Building is one of the most famous landmarks of New York City in the United States in the modern era, and it was a "white villa" for two decades before its status changed due to the changing economic situation.
The Empire State Building was built in 1930 in the form of a giant skyscraper, with an investment scheme that aims to be a group of offices that generate huge profits for its owner, but against the background of the Great Depression, the scheme failed and the building remained a huge “white villa” for 20 years before economic conditions improved in the United States It begins to generate profits in the early fifties of the last century.
Today, the building is owned by a real estate investment fund, and generates huge profits from leases of offices and retail space. There are about 1,000 offices in the building and more than 21,000 employees.
The building owners also benefit from the revenues of the television and radio broadcasting stations located in it.
"Doom Hotel" building
The Agony Hotel is located in Pyongyang, North Korea, and was designed as a pyramid-shaped skyscraper with a height of 105 floors, and was planned to include 5 restaurants and more than 3,000 hotel rooms.
Engineers began designing this hotel in 1987 as the tallest building in North Korea, but construction was stopped later in 1992 due to a lack of funding resulting from an economic crisis that hit North Korea.
Construction of the hotel resumed in 2008, and it was planned to open in 2012, on the centenary of the birth of former North Korean President Kim Il Sung.
But that did not happen, and the building remained incomplete, which gave it the title of "Doom Hotel" (Ryugyong) and represented a "white villa" for its owners throughout the past years.
An external photo of the Arena da Amazonia stadium, taken in 2014 (European News Agency)
abandoned stadiums
In the countries that hosted the World Cup over time, we find a number of abandoned stadiums that, after the end of the World Cup, turned into "white elephants".
Some countries built huge stadiums with a huge capacity specifically to host the World Cup, but after its completion, these stadiums became almost deserted, visited by only a few hundred football followers, and do not generate any significant profits for the state, while the cost of maintaining and operating them is very high.
An example of these stadiums is the Arena da Amazonia stadium in Manaus, Brazil, which was specially built when the country hosted the 2014 World Cup.
The stadium took 4 years to build, and cost the Brazilian government between 220 and 300 million dollars, and it is one of 12 other stadiums built by Brazil to host the World Cup.
This stadium was used during the World Cup in only 4 matches, and it was also used in a few matches during the 2016 Olympics. Today it has turned into a huge “white elephant” that attracts only hundreds of spectators in matches, while its capacity reaches nearly 40,000 spectators.
Likewise, when Greece hosted the Olympic Games in 2004 at a huge cost of nearly 9 billion euros, it was allocated to build impressive stadiums that were a source of pride for the Greeks at that time, but after the end of the World Cup all those huge stadiums were abandoned, and turned into white elephants that were a burden on the government that could not Taking advantage of them, which fueled the anger of the Greeks, especially since the sums spent by the government on these elephants were a major cause of the country's passing through an economic crisis and recession that lasted 6 years, during which the Greeks suffered from unprecedented levels of poverty and unemployment.
Qatar solves the crisis of white elephants after the World Cup
Qatar hosted the World Cup in 2022, and the Qatari government built 7 new stadiums at an estimated cost of $7 billion, in addition to developing Khalifa Stadium and increasing its capacity.
Similar to what happened in Brazil and Greece, it was also possible for these stadiums to turn into "white elephants" that burden the government with maintenance and operating costs and do not generate any significant profits in return.
But the Qatari government thought about this before starting to build the stadiums, and they were all designed to be able to be dismantled and reused in other fields, for example, the 974 stadium was made entirely from recycled shipping containers, and it was installed in a way that it was easy to disassemble it to return again to use in the field of commerce And marine navigation, and it is possible that the ceilings and some metal carriers are used in other projects inside Qatar.
It is also planned that the Education City stadium will be transformed into an entertainment and sports center for the members of the Education City, while reducing its area by half and donating 20,000 of its seats to developing countries.
As for Al-Bayt Stadium, it was designed to be re-dismantled after the World Cup, and converted into a 5-star hotel, shopping center and hospital.
Moreover, the sustainable plan that the Qatari government has worked on includes dismantling most of the Lusail Stadium seats to be reused in different places, and transforming the stadium into a community destination that serves the city of Lusail.
The same is the case with most stadiums, as the plan aims to donate seats, screens, audio equipment, players’ rooms, etc. to developing countries, thus achieving sustainable development with the complete exclusion of the “white elephants” problem.