A white elephant is a supposedly valuable possession whose upkeep exceeds its usefulness, and it is therefore a liability. The term derives from the sacred white elephants kept by traditional Southeast Asian monarchs in Burma, Thailand, Laos and Cambodia. The metaphor was popularized in the United States after New York Giants manager John McGraw told the press that Philadelphia businessman Benjamin Shibe had “bought himself a white elephant” by acquiring the Philadelphia Athletics baseball team in 1901. The Athletics manager Connie Mack subsequently selected the elephant as the team symbol and mascot. There are many examples of buildings, ships, artwork etc., which are considered white elephants.
We have heard this term used in Guyana for many of the new structures that have been recently erected. Many have asked, how will these be maintained and how will the return on investment be realized. In 2004, RoopGroup Investments visited Hilton Hotels to present a plan on the construction of a hotel in the Kingston Area where this week it was reported that another group of investors were interested and that Marriott Hotels were the hotel of choice. We had talked to the Mayor and City Council and Go-invest on our plans but were told that they were not ready to release the land. Hilton ended up not being interested in the project and said Guyana will never be in their plans in any near future because we do not have the ability to sustain a sophisticated operation in the tourist arena. I hope these investors that have thrown the Marriott name around have done their homework. I am not concluding that these are not true investment strategies or that it is meant to take our focus off the controversy surrounding the government investment in the recently opened hotel. Also the lack of attendance by some senior diplomats may send a signal that the controversy is even deeper than we imagined. We sincerely hope that these structures including the National Stadium can sustain operations comparable to the other plans that were shelved for these structures and not become a white elephant.
A useful approach to investment strategy begins with an examination of the errors that occur in investment management. The costliest errors in investment management are firmly rooted in human nature. I have experienced this first hand by putting patriotism over business acumen in my investments in Guyana. I myself am struggling to get a return on my investments. No business, except for the new hotel that I know of, has ever asked for real dollars from the government, some of us have asked for concessions and have been refused making the return on investment much harder. The term White Elephant then makes sense in this example, because money must be poured into the hotel project to get it to a point so it is not embarrassing to the country.
In summary, the term derives from the white elephant of East Asia, which is high-maintenance and has no practical use, but is considered sacred in Burmese culture (and therefore cannot be neglected or abandoned). We all now have to work hard to ensure our national stadium is sustained. It’s a beautiful structure. Until next week “Roop”.
