ISIS Runs Out of Money as Loses Territory

ISIS Runs Out of Money as Loses Territory
Sat Dec 5, 2015 10:11:55

As Syrian and Iraqi forces recapture more areas, ISIS appears to be wrestling with money problems that could affect its ability to wage war while trying to govern people in its self-declared caliphate.

Iraqi and Syrian forces in Iraq and Syria have retaken significant amounts of territory from the group, depriving it of traditional sources of income, analysts say. Towns and villages that ISIS had relied on for tax revenue have been captured by Arab and Kurdish opponents and lucrative spoils of war, including oil fields, properties to confiscate and captives to ransom off, have become scarcer as the group struggles to seize new areas.

"A problem they face is that much of their income over the last two years has been through conquest, confiscation and extortion, and those are all one-time things that aren't sustainable," said Quinn Mecham, an assistant professor of political science at Brigham Young University. "And now they're losing territory, and that makes it difficult to continue to extract revenues. The pressure is on."

Information about  finances is murky. But the group's diverse sources of income, including extortion and antiquities smuggling, have helped it weather more than a year of airstrikes from a U.S.-led coalition, analysts say. The Treasury Department recently estimated that the militants could be earning $40 million a month from oil sales.

Through a complex bureaucracy that uses the threat of violence, including floggings and beheadings, ISIS also raises cash by taxing and fining the roughly 6 million to 9 million people in parts of Iraq and Syria who live under its rule.

An ISIS official purportedly told Arabic-language media outlets in January that the group had a 2015 budget of $2 billion. Although that's probably an exaggerated figure, the group may have accumulated enough cash to run a large budget surplus, said Benjamin Bahney, a terrorism analyst at the Rand Corp. think tank.

But the ISIS has lost as much as a third of the territory it had controlled in Iraq, including the city of Tikrit and the Baiji oil refinery. Iraq's military and pro-government forces have recaptured those areas. In Syria, the Syrian army is seizing from ISIS militants key areas near the group's self-declared capital, Raqqa.

"As it loses control of cities and as its economy suffers because of the war, its tax revenues are reduced," said William McCants, a Brookings Institution expert on the militant group.

The territorial setbacks also may have compelled the group to turn to terrorism abroad - including the recent attacks in Paris that left 130 people dead - as a way to apply new pressure on its enemies, analysts say. The group, they say, appears to be shifting resources to reinforce affiliates in other areas of the world, including Libya, possibly to secure a safe haven in case it loses more territory in Syria and Iraq.

There are signs that the group might be tightening its budget. Fighters' salaries have been reduced recently, from roughly $400 a month to about $300, said Columb Strack, a Middle East analyst at Jane's Information Group. In addition to a tax system rooted in Islamic law, he said, the group appears to be imposing more fees on a range of activities and products, including farming and mobile phones.

Aid programs that benefit the needy in ISIS controlled  areas appear to have been scaled back, causing poverty to deepen, Syrian activists and aid workers say. These areas, they say, are experiencing acute shortages of medicine for chronic diseases such as diabetes, as well as prolonged electricity cuts.

Without easy money, the ISIS has raised its fees, even on high school registration and textbooks, Tamimi said.

"Now, evidence seems to point to hardship in Mosul, and ISIS has been resorting to measures to try to deal with the new reality of having to pay those working under its authority who no longer get salaries directly from the Iraqi government," he said.

Few expect widespread dissent in ISIS-controlled areas anytime soon, in large part because of fear of the group's notorious brutality. The threat of violence also prevents many people from fleeing, along with war, anemic economies and sectarian-driven politics in neighboring areas.

Colin P. Clarke, a terrorism analyst at the Rand Corp., said he expects the group's finances to tighten as the airstrikes intensify. In recent weeks, Russia has targeted tanker trucks, threatening the ISIS ability to transport oil. British warplanes began bombing targets in Syria on Thursday, striking an ISIS-controlled oil field in eastern Syria, the BBC reported.

Russia, which does not coordinate with the coalition, also has stepped up air raids in ISIS key oil-producing areas in eastern Syria.

ISIS imposes fees and taxes on refining, shipping and selling oil, which largely is consumed within territory held by the group, analysts say.

"There will be a lag in seeing the effects, but in order to keep operations going, the group will likely have to reduce payments and the number of people working for it," Clarke said.

That could affect thousands of people, causing local anger to soar and more discontent for the militant group to manage.

"It's running a caliphate, so it has salaries to pay and people to keep in jobs. They run bakeries and have to find ways to keep the lights on," Clarke said. "It's a lot to manage;" ndtv reported.


string(1121) "[{"id":"1765984","sort":"3453505","contenttypeid":"21","pic":"/2015/12/03/alalam_635847683841179113_25f_4x3.jpg","title":"Iraqis “Widely Believe” US Supporting ISIS: Washington Post"} ,{"id":"1766032","sort":"3453506","contenttypeid":"21","pic":"/2015/12/03/alalam_635847765237170790_25f_4x3.jpg","title":"US-led Coalition Not Striking ISIS Oil Convoys"} ,{"id":"1766132","sort":"3453507","contenttypeid":"21","pic":"/2015/12/04/alalam_635848241090152311_25f_4x3.jpg","title":"ISIS New Horrific Video Real Game; Find the Prisoner and Kill Him"} ,{"id":"1766133","sort":"3453508","contenttypeid":"21","pic":"/2015/12/04/alalam_635848240834841023_25f_4x3.jpg","title":"German Parliament to Decide on Syria anti-ISIS Mission"} ,{"id":"1766165","sort":"3453509","contenttypeid":"21","pic":"/2015/12/04/alalam_635848307069917544_25f_4x3.jpg","title":"ISIS Spreading ‘Flesh-Eating’ Disease in Syria as a Biologic Weapon"} ,{"id":"1766219","sort":"3453510","contenttypeid":"21","pic":"/2015/12/04/alalam_635848427602030609_25f_4x3.jpg","title":"Pictured: Sorcery, Another Excuse for Latest ISIS’s Beheading in Iraq"} ]"