Economics

What Is A "White Elephant Project" And Why It Is Called So?

An extremely expensive project with little or no output is called a white elephant project.

A “white elephant project” is a phrase which is used in reference to a financial endeavor which fails to live up to its expectations. A “white elephant project” can be used in reference to a completed project or one whose undertaking is still ongoing. The phrase has its origins in Southeast Asia which is home to Asian elephants known as white elephants due to their unusual pigmentation, which instead of being grey, have a pink pigmentation.

Origin Of The Term

The term “white elephant” has its origins traced to East Asia where populations of Asian elephants have lived closely with a human settlement for many centuries. Ancient kingdoms in East Asia particularly in present-day Myanmar, Cambodia, Thailand, and Laos regarded white elephants as sacred animals and had (and still have in the case of kingdoms in Thailand and Myanmar) laws protecting the animals. Only the extremely wealthy individuals in a kingdom were able to own a white elephant and in most cases, only the monarch owned these animals. While ownership of a white elephant commanded great respect in the kingdom, the owners of these animals had to incur great expenses to maintain the elephants which required huge amounts of forage. Therefore, in these, a gift of a white elephant was usually seen as both a blessing as well as a curse; a blessing because a white elephant was a sacred animal and curse because maintenance cost was extremely expensive for an animal which had little (if any) practical use.

Historical Use Of The Term

The term was first used in Europe in reference to an unsustainable project in the 17th century. However, some historians believe P.T. Barnum was first to coin the phrase in the late 19th century. P.T. Barnum was a 19th-century showman who was infamous for hoaxes in his Barnum and Bailey Circus. One of his exhibitions in the circus was a white elephant named Toung Taloung which he dubbed “the Sacred White Elephant of Burma.” Barnum acquired the elephant from the King of Siam at a huge cost but was disappointed to discover that instead of the elephant being white in color, it was actually grey with pink spots. Other historians credit Ezra Cornell as the person who introduced the phrase into popular lexicon in the early 19th century. The phrase enjoyed much use in the 19th and 20th centuries in Europe and is still popularly used in English-speaking countries.

Notable Cases

Ryugyong Hotel (North Korea)

The Ryugyong Hotel is arguably North Korea best known white elephant project. Ryugyong Hotel is a pyramid-shaped skyscraper situated in Pyongyang, North Korea and is the tallest building in the city, with a topped-out height of 1,082 feet. Construction of the skyscraper began in 1987 but is yet to be completed after the project which is financed by the Pyongyang-based government experienced financial difficulties. Due to its incompletion, the hotel is popularly regarded as the world’s tallest unfinished building. While several international companies, including hotel giant Kempinski, have expressed interest in completing the project, the country’s international relations have discouraged all potential foreign investors.

Detroit People Mover (United States)

The most popular white elephant in Detroit is a tram system which encircles the city’s downtown region known as the Detroit People Mover. The idea of establishing a tram system in Detroit was conceived in the 1960s as the city’s administration looked for a fast and reliable form of transport to alternate with the existing road transport. Construction of the tram system was marred with financial cutbacks from the federal government but was finally completed in 1987 and was expected to handle about 65,000 passengers each day. However, the tram system ended up being a white elephant project as daily commuter numbers reached only 6,000 passengers. The project also proved not to be cost-effective, with the cost per passenger mile in the tram system being about $3, a high figure when compared to the $0.82 in Detroit buses.

Russky Bridge (Russia)

The Russky Bridge is a long cable-stayed bridge which connects the Russky Island to the Russian mainland. The bridge holds the title for the world’s longest cable-stayed bridge, with its total length spanning a total of 10,200 feet. The bridge also has the second-tallest pylons in the world. The Russian government constructed the bridge at the cost of over $1 billion to serve the 2012 Asia-Pacific Economic Cooperation conference held in Vladivostok. The government hoped the bridge would open up Russky Island to become a tourist resort town but the progress towards this goal has been quite slow. The bridge was designed to handle about 50,000 vehicles each day, which is way above the total number of vehicles in Russky Island. The bridge is considered as a white elephant project, with critics pointing of the irrelevance of a $1-billion bridge to an island with a population of about 5,000 inhabitants.

Brasilia (Brazil)

Brasilia is a chief contender for the title of the world’s largest white elephant project since Brasilia is an entire city, specifically it is Brazil’s capital city. The main aim for the establishment of Brasilia was to open-up the central region of the country, after the growth of Rio de Janeiro and Sao Paulo caused development to be focused in the coast. While the city did eventually become Brazil’s new capital city, achieving the goal of opening up the region has been slower than expected.

Related Terms

There are two other phrases whose origin is intertwined to that of the term, “white elephant project” and are closely related to the term. These are a “white elephant sale” and a “white elephant gift exchange.” A white elephant sale is the sale of items which are considered as having no intrinsic value and of little use. Such items are also known as white elephants. White elephant sales are popular in the United States where they are usually organized by non-profit organizations including learning institutions and churches and are held on holidays and feature a public fete sale style. A white elephant gift exchange is a party game held during festivities, in which gifts considered to have little intrinsic value are exchanged among its required six participants. Also known as a Yankee swap, a white elephant gift exchange is similar to a white elephant sale, except that the primary goal of a white elephant gift exchange is entertainment and not financial gain.

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