ISIS smuggled around $400 million out of Syria to fund its reorganizing for a comeback
Although the Islamic State has lost nearly 98% of the territory it once controlled, the group is ripe for a comeback in Sunni-majority areas of Iraq and Syria.
The main reason is its existing war chest, coupled with its skill at developing new streams of revenue. The Islamic State used to mostly rely on the territory it controlled, including cities and urban strongholds, to amass billions of dollars through extortion, taxation, robbery, and the sale of pilfered oil.
But the group has proven that it is capable of making money even without controlling large population centers.
During the apogee of its territorial control in 2015, the Islamic State accrued nearly $6 billion, making it by far the wealthiest terrorist group in history. How could a militant group compile the equivalent of a nation-state’s gross domestic product?
When it did hold territory, the Islamic State primarily generated its wealth from three main sources: oil and gas, which totaled about $500 million in 2015, mostly through internal sales; taxation and extortion, which garnered approximately $360 million in 2015; and the 2014 looting of Mosul, during which the Islamic State stole about $500 million from bank vaults.
The Islamic State has now lost most of its territory. The group has been relegated from controlling territory roughly equivalent to the size of Great Britain to attempting to survive while under siege in strongholds pockmarking the Euphrates River Valley.
The Global Coalition to Defeat ISIS has destroyed the terrorist proto-state in the Middle East and denied its leader, Abu Bakr al-Baghdadi, his dreams of an Islamic caliphate in the heart of the region. Without access to territory, and thus a significantly reduced revenue stream from taxation, extortion, and the sale of oil, the Islamic State’s funding has already decreased precipitously.
The group, however, no longer relies on territory for its economic survival.
In part, that’s because its surviving leadership may have smuggled as much as $400 million out of Iraq and Syria. The group’s extended network will seek to launder this money through front companies in the region, especially in Turkey. Some cash could be converted to gold and stockpiled for sale in the future.
Meanwhile, even as the Islamic State has far less money coming in, the group’s expenses are minimal compared to what they were just over a year ago. No pseudo-government is responsible for health care, education, paying municipal salaries, and providing public works, including trash and sewage services.
With such a drastically reduced operating budget, the cash it has hoarded will provide the group with more than enough money to survive as a clandestine terrorist movement with the ability to wage a prolonged campaign of guerrilla warfare throughout Iraq and Syria.
The Islamic State has also buttressed financial holdings with a diversified funding portfolio. It has developed a knack for raising money through a range of new criminal activities, including but not limited to extortion, kidnapping for ransom, robbery and theft, drug smuggling, and trafficking in antiquities.
Source: Business Reader
