ISIS is different from other terrorists in two main ways. First it is unprecedented in its level of violence. We are talking about a terrorist organization whose leaders were thrown out of al Qaeda for being too violent. That is a special kind of crazy. But just as important is the fact that ISIS is a more of a single operation, unlike al Qaeda, which had a core group surrounded by many “franchise” terrorist groups, ISIS is a single entity. And as a single entity the “Islamic State” or whatever they are calling themselves today has been able to develop a self-sustaining economy that among other things makes it the richest terrorist group ever and able to fund a lot more evil than other terrorists.
As you can see by the chart above, ISIS has taken over large swaths of both Iraq and Syria, and closing in on Jordan, Turkey, and Lebanon and everywhere it goes it raises money through extortion, oil pirating and kidnapping. This is significant because one of the ways free nations fight terrorists is cutting off the money, since ISIS has its own money that strategy would be a much more difficult task.
Today’s Wall Street Journal outlines the emerging financial empire being built by the vicious terrorist group that is building a self-sustaining economy across the territory it controls in Syria and Iraq, by pirating oil and exacting tribute from a native population of at least eight million people.
Pretty soon Qatar won’t be lying when it says it doesn’t help fund ISIS.
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For Western and Arab nations that are striving to stop Islamic State, the group’s local funding sources pose a conundrum: A clampdown on economic activity that helps fund the group, counterterrorism officials and experts said, could cause a humanitarian crisis in the already stressed areas it controls.
“Can you prevent ISIS from taking assets? Not really, because they’re sitting on a lot of assets already,” said a Western counterterrorism official. “So you must disrupt the network of trade. But if you disrupt trade in commodities like food, for example, then you risk starving thousands of civilians.”
From Raqqa in Syria to Mosul in Iraq, Sunni radicals from the group administer an orderly extortion system of business and farm tributes, public-transport fees and protection payments from Christians and other religious minorities who choose to live under the militants rather than flee, according to residents of these areas, analysts who have studied the group and government officials tracking it.
Islamic State also does business with people from some of the same regions whose governments are trying to stamp it out. From the territory the group has taken, it controls the sale of oil, wheat and antiquities, spurring a vast gray market with buyers as unlikely as the Syrian regime and Shiite and Kurdish businessmen from Lebanon and Iraq, said Western officials and Syrians and Iraqis with knowledge of the now-common business transactions.
“They have a stable economy, more or less, across their territory in Syria and Iraq,” said Hasan Abu Hanieh, a Jordanian scholar of Sunni radicalism who is an expert on al Qaeda and Islamic State.
ISIS gets a large slice of its operating income from kidnapping ransoms. While the US doesn’t pay ransom Europe does and has for a long time. In fact Islamist terror from the days of Yasser Arafat through ISIS today, was suckled on the teat of European financial appeasement as well as European and U.S. political appeasement.
In its moves in Syria last year and its blitz through Iraq this year—militants grabbed oil fields, crop lands and central-bank branches—Islamic State appeared to surprise outside observers. But Mideast experts say the group remains very much the successor of al Qaeda in Iraq, which became al Qaeda’s richest branch using the same sorts of local taxation and extortion.
“At the time, no one could do any simple daily transaction or business—a truck couldn’t pass down the road—without payment,” Mr. Abu Hanieh said of al Qaeda in Iraq’s heyday. “This local revenue strategy continues,” he said. Islamic State is also structurally similar to its predecessor and is believed to have retained a financial committee with a “minister of finance” who oversees financial affairs, he said.
ISIS does its homework and that helps them strong-arm the locals into turning over their assets.
Earlier this year, as Islamic State militants swarmed northern Syria, one farming family got a knock on the door that would strip them of their livelihoods.
The militants, who introduced themselves as Islamic State members, said they were administering the town and had a list of how many acres of land and other assets the family owned, said one family member. They also said they had a list of the town’s Christian families and the tribute they had to pay to be able to stay living there.
“They demanded to be paid in gold, silver or any other precious material for the annual crop we were about to plant,” said the family member, who has since fled. He said farmers were forced to pay tribute based on land in their possession rather than the success of their crop—a hardship, coming in drought year.
ISIS also gets its cash from the fact it is an oil producing “state.”
In Syria, the insurgents control eight oil and gas fields in the provinces of Raqqa and Deir Ezzor, according to Syrian rebels who once controlled the fields.
Again, from these fields, they trade with people from the very countries that are fighting them. They sell heavy oil at an average of $26 to $35 a barrel to local merchants, to merchants across the border in Iraq, or to upstart refineries financed by Turkish, Lebanese and Iraqi businessmen, said Syrians and Lebanese involved in the oil trade.
Light crude, which is higher priced on global markets, sells at up to $60 a barrel, these people said. Crude smuggled out, rather than sold locally, is priced higher to account for the often complicated way out. Syrian rebels estimated Islamic State-controlled fields produce between 30,000 and 70,000 barrels a day.
Trade beyond Syrian and Iraqi borders is buoyed by a network of business people. Kurdish merchants transport oil into Iraqi Kurdistan and sell it either to Turkish or Iranian traders. Those traders smuggle it into their countries and sell it at a discount over local prices, or sell it back to the Syrian government, said Syrians and Iraqis involved in the oil trade.
Turkey’s foreign ministry said the amount of oil authorities have seized along the Turkey-Syria border has surged by 300% since the start of the Syrian uprising in 2011. “We are trying to see how we can stop this,” a senior Turkish foreign ministry official said, “but the border is very difficult to police.”
The ISIS economy has come just in time as many Muslim nations are looking at the extreme violence, beheading, crucifixions, etc., of the terrorist organization and realizing it is giving Islam a bad name. Surprisingly these same countries said nothing (and still say nothing) about groups such as Hezbollah, Hamas, and al Qaeda.
Despite what the Obama administration says in public, ISIS which is extremist even for extremists and has its own source of cash, is an existential threat to the United States and the Western World. Many wars have been fought because people of reason have ignored the stated objective of despots. More than a few times ISIS leadership has said it wants to put a huge hurt on the United States.
The combination of the anger against ISIS in the Muslim States as well as the fear of ISIS in Europe, leaves President Obama with an option his predecessor never had forming a truly international alliance to fight terrorism, at least ISIS terrorism.
There is no way U.S. voters will tolerate any more American boots on the ground in Iraq and Syria (beyond the stated number of troops-about 1,000 there are probably Special Forces on the ground we are not being told about). Americans probably would support air and Special Forces support for a ground force comprised of our allies.
Perhaps its time for our President to put together an alliance where other countries take the lead on the ground (its well past their turn) with support from the USAF and Special Forces. That would show the leadership he hasn’t displayed since he arrived in the White House 6 and a half years ago.
Keep in mind though, unlike the case of our entry into Iraq eleven years ago, ISIS threatens the life, liberty, and pursuit of happiness for all Americans home and overseas. If Obama cannot put together an alliance in that other nations are the lead boots on the ground, America might have to go in ourselves. In the end the first priority of a national government is protecting its citizens and a war against ISIS would not be an optional war, they aren’t lying when they say they intend to go after this country.