Iraq and the UK have signed a ‘historic’ trade and bilateral defense agreement worth a total of £12.3 billion ($14.98 billion). The wide-ranging agreement was announced following a meeting between Iraqi Prime Minister Mohammed Shia al-Sudani and British Prime Minister Keir Starmer in London.

According to a spokesperson from the Prime Minister’s Office at Number 10, Starmer met with his Iraqi counterpart, Sudani, in London. The British Prime Minister noted that Iraq has become a safer and more prosperous country under Sudani’s leadership and expressed his satisfaction with this progress. Starmer emphasized his commitment to supporting this momentum by building a modern, future-oriented partnership between the two nations.

The leaders also discussed the situation in the Middle East, emphasizing the importance of promoting peace and stability in the region, particularly in light of recent developments in Syria. They welcomed the deepening of bilateral defense ties through the signing of a new joint defense declaration and pledged to maintain strong cooperation in the fight against terrorism.

Prime Minister Starmer also addressed the issue of economic growth during the meeting, welcoming the developing partnership between the UK and Iraq. This partnership was demonstrated by the ‘Partnership and Cooperation Agreement’ signed during the visit and the announcement of a £12.3 billion trade package. The two leaders discussed their intention to work on a new extradition agreement to address illegal immigration and committed to closer collaboration to disrupt human trafficking networks.

The agreement will enable Iraq to benefit from British private sector expertise in water, energy, telecommunications, and defense infrastructure. It will also secure future investment projects in sectors such as clean energy, pharmaceuticals, logistics, and financial services.

The agreement includes several major projects:

-A £1.2 billion project to use British-built power transmission systems in a grid connection project between Iraq and Saudi Arabia.

-A £500 million plan for the refurbishment of Al-Qiyara Air Base in northern Iraq.

-A £5.3 billion water infrastructure project to provide clean water to southern and western Iraq, to be run by a UK-led consortium.

In addition, a British company will undertake the Basra Water Project, which includes desalination and water treatment plants to provide clean water to three million Iraqis in the south. This project is worth a total of £3.3 billion. British companies have also been awarded a £330 million contract to clear mines left by the war across Iraq.

Following the meeting, the Iraqi side announced that a memorandum of understanding was signed with British energy company BP to develop Kirkuk oil fields and increase oil and gas production. According to a statement from the Iraqi Prime Ministry Press Office, the memorandum, signed during Sudani’s visit to the UK, transfers the rehabilitation and development project of four oil fields belonging to the Northern Oil Company in Kirkuk to BP. The agreement aims to achieve the best production rates targeted for oil and natural gas.

Investors are rapidly divesting from emerging market equities as they brace for President-elect Donald Trump’s proposed trade tariffs and grapple with a strengthening US dollar and rising bond yields, according to a report by the Financial Times (FT).

The MSCI Emerging Markets Index, which tracks approximately $7.6 trillion worth of stocks in China, India, Brazil, South Africa, and other markets, has fallen more than 10% since reaching a two-and-a-half-year high on October 2. During the same period, developed market stocks have remained relatively stable.

Emerging markets have been particularly impacted by forecasts suggesting that inflationary policies under the Trump administration, such as tariffs and tax cuts, will compel the Federal Reserve to maintain higher interest rates for longer than previously anticipated. This comes amid an already robust US economy.

In recent weeks, US government bond yields have risen as investors reassess the inflation outlook. Emre Akçakmak, a portfolio advisor at East Capital, an emerging markets fund manager, noted, “With US yields rising and the US dollar strengthening, it’s clear that this is not an environment conducive to emerging market performance. The major markets that constitute two-thirds of the MSCI index are all under pressure.”

Chinese stocks, which represent the largest share of the index, have declined by 15% since October 2 due to concerns about the resilience of the country’s economy. Similarly, India and South Korea, two other major players in emerging markets, have also suffered significant losses in recent months.

According to JPMorgan data, investors have withdrawn approximately 3 billion dollars from global emerging market equity funds this year. This adds to the 31 billion dollars in outflows recorded in the previous year.

Prolonged periods of high US interest rates and a strong dollar often discourage US investors from taking on additional risks by investing abroad, prompting them to focus on domestic opportunities instead.

Many investors anticipate that countries affected by US tariffs may attempt to weaken their currencies to enhance the competitiveness of their exports, which could further reduce dollar earnings in emerging markets.

Some investors are positioning for a potential sell-off in emerging market assets during the first half of the year, followed by a recovery. They argue that tariffs may initially be set higher than Wall Street’s consensus but could be reduced as Trump negotiates deals with individual countries.

However, some remain hesitant to return to emerging markets, as doing so would require significant exposure to Chinese equities unless they are held outside of indices that could overshadow movements in other countries.

The Polish government adopted a resolution on Thursday ensuring that Israeli leaders, including Prime Minister Benjamin Netanyahu, indicted by the International Criminal Court (ICC), can “freely and safely” attend the 80th anniversary of the liberation of Auschwitz on 27 January.

On 21 November 2024, the ICC issued an arrest warrant against Netanyahu and others, accusing them of crimes against humanity in connection with the 15-month war in Gaza. This means that ICC member states, such as Poland, are obliged to arrest them upon entry into their territory.

In a political decision that directly contradicts its ICC obligations, the government, led by Prime Minister Donald Tusk, stated it would allow Israeli leaders to attend the event safely, citing its significance as “part of the commemoration of the millions of Jewish victims of the Holocaust.”

The decision also seems to be a concession to President Andrzej Duda, aligned with the conservative Law and Justice (PiS) party. Duda sent an official letter to Tusk demanding that Israeli leaders be granted safe passage.

Poland’s traditional pro-Israel stance remains one of the few areas of consensus among politicians from major parties.

However, the issue may become irrelevant, as Israeli media reported that Netanyahu had not received an invitation. Additionally, the Polish Foreign Ministry informed Euractiv Poland that it had no information suggesting Netanyahu would attend. The ministry also dismissed allegations that Netanyahu could be arrested upon entering Poland as “fake news” propagated by U.S. media.

The Auschwitz-Birkenau camp, operated by Nazi Germany in occupied Poland, was liberated by the Red Army on 27 January 1945 during the Vistula-Oder Offensive. An estimated 1 million people were killed in the camp as part of the “Final Solution.”