Nearly a century on, the effects of the Great War rumble on



The guns of August 1914 are firing again. Today, 95 years after the armistice and months before the 100th anniversary of the First World War’s opening moments, we are still grappling with the forces unleashed by the conflict and, indeed, the many myths that surround how it began.

It was not the assassination of Archduke Franz Ferdinand in Sarajevo that triggered the war, but the blank cheque Germany gave to the Austro-Hungarian Empire. Without this support, they would never have issued the ultimatum to Serbia that precipitated the conflict and Russia would not have mobilised.

The convulsions in the Middle East today are, it can be argued, partly the legacy of that four-year bloodbath. The Sykes-Picot Agreement between France and Britain carved up the Ottoman Empire into self-interested spheres of influence. The arrogance of these “great powers” was so strong that talks began on the post-war landscape three years before the guns fell silent.

These negotiations coincided with humiliating Allied defeats at Gallipoli and the deal was eventually signed in May 1916, just weeks before the allies suffered massive losses on the Somme. The modern incarnations of Syria, Lebanon and Iraq were forged in that Sykes-Picot Agreement. All three have paid the price of that carve-up in the past decade.

In Asia, the troubled relationship between Japan and China also finds its roots in the Great War. The Japanese prime minister Shinzo Abe last week vowed to stand up to China, amid rising tensions between the two nations, particularly over who owns a string of islands in the East China Sea. While much of the mutual distrust between the two nations stems from their contrasting economic fortunes in the past two decades, the Chinese also have bitter memories of Japanese colonial aggression.

Japan entered the First World War on the side of the allies in 1914, participating in the Siege of Tsingtao, in a joint attack with the British on the German held port in China. It exploited this position to extend its influence. In 1915, it presented China with the humiliating string of demands for special privileges in the country and was later favoured by the allies at Versailles. An outraged China never forgot.

August 1914 represents a warning from history. “The falcon cannot hear the falconer,” wrote WB Yeats, the Irish poet, in 1920, aptly summing up the failures that brought the First World War into being. The war was precipitated by a breakdown in communication and a diplomatic failure of staggering proportions. It was brought to life by a failure of leadership, of common sense, and the result of the ridiculous notion of a clash of civilisations.

There is also a perception that the Second World War was an inevitable consequence of the Great War. Yes, Versailles was a punishing treaty and hit Germany hard. The treaty gave Adolf Hitler his most potent propaganda card and throughout the 1920s he propagated the delusional myth that somehow Germany had not been defeated in the field but had been stabbed in the back by the signatories of the armistice. But the Second World War was not inevitable because of the first.

Hitler exploited the economic turmoil of the Weimar Republic – during the 1920s the Nazi Party actually lost support – but it was the 1929 US stock market crash that doomed the Weimar Republic, reinvigorated Hitler’s march to seize power and set the scene for the approach of another devastating war.

Could Japan and China go to war over a few rocks in the sea? Unlikely as it seems, the First World War tells us that devastating conflicts have been triggered by less.

John Dennehy is a senior news editor at The National. His book, In A Time of War: Tipperary 1914-1918, was published earlier this year

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Never Look Away (Germany)

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Abdul Jabar Qahraman was meeting supporters in his campaign office in the southern Afghan province of Helmand when a bomb hidden under a sofa exploded on Wednesday.

The blast in the provincial capital Lashkar Gah killed the Afghan election candidate and at least another three people, Interior Minister Wais Ahmad Barmak told reporters. Another three were wounded, while three suspects were detained, he said.

The Taliban – which controls much of Helmand and has vowed to disrupt the October 20 parliamentary elections – claimed responsibility for the attack.

Mr Qahraman was at least the 10th candidate killed so far during the campaign season, and the second from Lashkar Gah this month. Another candidate, Saleh Mohammad Asikzai, was among eight people killed in a suicide attack last week. Most of the slain candidates were murdered in targeted assassinations, including Avtar Singh Khalsa, the first Afghan Sikh to run for the lower house of the parliament.

The same week the Taliban warned candidates to withdraw from the elections. On Wednesday the group issued fresh warnings, calling on educational workers to stop schools from being used as polling centres.

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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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Dragon:prosperous, brave, rash
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Sheep:easy-going, peacemaker, curious
Monkey:family-orientated, clever, playful
Rooster:honest, confident, pompous
Dog:loyal, kind, perfectionist
Boar:loving, tolerant, indulgent