Παρασκευή 27 Νοεμβρίου 2015

ISIS lucrative economy and its donators

“ISIS is a huge financial package to support more 8 million people—which is now the size of the population living in territories under ISIS control... it is also supporting tens of thousands of militants who have been at war for months, with new recruits coming in every day. Yet it keeps all these people answerable to them, seems to have incredible cross-border mobility and shows no signs right now of running out of money or fuel.” says Luay al-Khatteeb, visiting fellow of the Doha Brookings Center and director of the Iraq Energy Institute in Baghdad[1].



Today ISIS controls an area almost as big as then United Kingdom. Having amassed more than two billion dollars[2] since its appearance in 2003[3] it is now the wealthiest terrorist organization. Although, lucrative donations and private contributions started up ISIS, the group has managed to become self funded within a couple of years. It has even put in place the beginnings of quasi-state structures - ministries and law courts. This unpresented pace of income compilation  is based on the following sources of income[4]:
·         Oil smuggling from controlled territories: . ISIS controls almost 60% of Syria’s oil, and seven oil-producing assets in Iraq. Ιτ exports about 9,000 barrels of oil per day at prices ranging from about $25-$45 (£15-£27). This revenue is ranged from $1 to $2 million a day, which makes oil its most important source of income. Its main clients are Turkey, Iraq and Syria
·         Natural resources exploitation: For instance,  ISIS has seized control of three dams and two gas-electricity plants in Syria. Rather than ruining them ISIS has made a deal with Syria to let state employees come to work and sell some of the gas produced to Damascus. Not only does the Assad government pay the gas plant staff, but workers say it sends spare parts and specialists. Farmers of  Raqqa's fields have accused IS of forcing them to sell their commodities to Turkey while bread in Raqqa is scarce.
·         Taxes on the population and local businesses in controlled areas for providing services such as electricity and permissions to open new businesses/ VAT on products .
·         Kidnappings and hostage taking: By 2014, ISIS kidnappings only in Mosul was generating $12 million per month. Averagely, ISIS gains almost $60 million dollars from kidnappings.
·         Crimes such as robberies, trade in illegal drugs and human trafficking: This levies around $80 million per month. One example is the June 11 seizure of Mosul's central bank, which alone netted tens of millions of dollars to ISIS. 

But smuggling oil or drugs trade can hardly sustain the vast areas under control.  It is no secret that a significant amount of funding comes from other states.

The donors from the Persian Gulf
As Former U.S. Navy Admiral and NATO Supreme Commander James Stavridis, put it to nbcnews.com "there are several Arab donators that are like what 'angel investors' are to tech start-ups, except they are interested in starting up groups who want to stir up hatred"[5].

It is no secret that the House of Saud promotes the extremist Wahhabism domestically, the question is whether it does so internationally too. Even though exact numbers are not known it is said that more than $100 billion (the number could be double) have been lavishly spent by Saudis on promoting Wahhabism to much poorer Muslim states[6]. It is noticeable that Soviet Union  spent about $7 billion to promote communism from 1921 and 1991.

Last year, Vice President Biden at an event at Harvard's Kennedy School of Government, said[7] "Our allies in the region were our largest problem in Syria. The Turks were great friends... [and] the Saudis, the Emirates, etcetera. What were they doing?.... They poured hundreds of millions of dollars and tens of tons of weapons into anyone who would fight against Assad -- except that the people who were being supplied, [they] were al-Nusra, and al-Qaeda, and the extremist elements of jihadis who were coming from other parts of the world".

After years of US pressure to Riyadh for it to designate ISIS as a terrorist organization not only until last March did it do so but still without achieving any particular objectives of obstructing private Saudi funding.

Qatar and United Arab Emirates  are also accused for cloudy links to ISIS. Especially Qatar has been promoting diverse radical groups in order to strengthen its political position in the region.  It has been even called by the US “permissive environment for financing terrorist groups”.  Besides military-based funds, they fund charitable organizations for training imams, media, universities and cultural centers.


An important funding hub is also Kuwait. For the rest of the Gulf states to ensure that their donations actually reach Syria, they send their money to Kuwait. Andrew Tabler, senior fellow at the Washington Institute for Near East Policy, told The Daily Beast. “Kuwait’s banking system and its money changers have long been a huge problem because they are a major conduit for money to extremist groups in Syria and now Iraq[8].”

Another non Persian Gulf state, Turkey plays a special part on this situation.  It operates a questionable policy of border enforcement in which weapons and money flood into Syria. It is said that bags of cash are coming in and out ISIS controlled areas from Turkey handing over millions of dollars mostly from Gulf states[9].


What should be remembered is that besides donations from Gulf states which up until recently has been the major source of money for ISIS, empower IS by maintaining trade relations. Selling crude oil to Turkey, Iraq and Syria is a major resource for IS.


The role of the West

The promotion of  radical Islamism is not the only drive for the Gulf states that abet ISIS. They also take pleasure in ISIS-led Sunni advances against Iraq's Shiite government and in Shia containment (Iraq and Iran) in the region.

The same strategic interest is shared by the West. Years after the Syrian rebellion the US and its allies have been supporting and arming the opposition despite of  its ties to extremism. Besides wanting a buffer to weaken the Shia expansion it is also in the best interest for US and its Western allies to get rid of Assad and assure the flow of petrol through Syria. To cut a long story short, in 2011 a $10 billion investment deal was signed between Iran, Iraq and Syria for a pipeline to be built from Iran to Syria to transport Gulf oil to Turkey and Europe[10].

A recently declassified secret 2012 US intelligence report,  allegedly reveals that the Western countries, Gulf states and Turkey welcome the prospect of  a "Salafist principality" in Eastern Syria and an al-Qaida controlled Islamic state in Syria and Iraq[11]. Even though a report is not a clear and formal policy document it is indicative of the mess brought into the region by the superficial game theoretic approaches of  Western states. Another embarrassing example is when a trial in London of a Swedish man accused of terrorism, was abandoned by prosecution after the defense threatened to reveal plenty of evidence that the British state was providing support to extremist Syrian opposition[12] . Play with fire and you get burned! Ironically, there was no al-Qaida in Iraq before the US-led invasion. And as if the West never learns little has it achieved by the bombings of Syria according to locals, on the contrary they have released the major extremist forces and allowed ISIS to overran almost half of the Syrian territory.

Before 2001 the chunk of money directed to terrorists were coming from businesses and institutions in the US. After 9/11 and the implementation of the Patriot Act the money laundered for these purposes sifted from the US to Europe that does not have a comprehensive anti-laundering legislation. Thus, the US unsuccessfully managed to frieze only 200 million of terrorist funds around the world while still huge amounts are routed through the US from institutions and legal businesses. Yousaf al Salafi, commander of IS in Pakistan stated that he run his organization with funding coming through the US. He also admitted that he was getting around $600 per recruit sent to Syria[13].

The US Western allies are not less involved in the funding process. In Europe banks are still free to do business with shadowy financial entities. In the Milan mosque in Via Quaranta case, for example, Italian authorities discovered that the cell received funds from Arab sponsors via British offshore accounts.[14]

Last but not least, few Western oil businesses are accused for doing business with ISIS. For example, the British oil company, Genel Energy, which is contracted with the Kurdish Regional Government is accused of facilitating ISIS oil sales to Turkey.[15]

Nowadays, in poor Muslim countries poverty is exploited to promote extremism. Indicatively, the choice for people is between going to an extremist madrassa or getting no education at all. The affected areas include Pakistan, Indonesia, the Philippines, Malaysia, Thailand, India and parts of Africa. The more tolerant versions of Islam cannot survive against the chunk of money being promoting extremist ideology. This is a major problem that both the West and Muslim world must address.

By Elpiniki Karakosta



[1] Available at Available at http://www.newsweek.com/2014/11/14/how-does-isis-fund-its-reign-terror-282607.html

[2] See charles Lister. “Profiling the Islamic State”. Brookings Doha Center. 13 (Nov. 2014). p. 5.

[3] After the invasion of Iraq in 2003, al Zarqawi set up the forerunner to today’s Islamic State: Jama’at al-Tawhid w’al-Jihad (the Party of Monotheism and Jihad), which was made up mostly of non-Iraqis. By 2011, when the U.S. troop withdrawal was complete, Al Qaeda was being run by Abu Bakr al-Baghdadi, and had morphed from a largely foreign to a largely Iraqi operation. AQI was now better known as the Islamic State of Iraq, or ISI. Baghdadi took Zarqawi’s tactics and supercharged them. Available at https://www.quora.com/How-did-ISIS-form-When-and-where-did-ISIS-begin.
[4] Available at http://www.businessinsider.com/theory-that-saudi-arabia-funds-isis-2014-6?IR=T, http://www.ft.com/cms/s/0/b2c6b5ca-9427-11e4-82c7-00144feabdc0.html#ixzz3s4gTSMse and http://egyptianstreets.com/2015/05/11/what-keeps-isis-running-the-funding-and-support-of-a-terror-organization/ . Also see Costigan, Sean S., and Gold, David, eds. Terrornomics. Abingdon, Oxon, GBR: Ashgate Publishing Group, 2007. ProQuest ebrary. Web. 15 November 2015


[6] Available at http://www.huffingtonpost.com/dr-yousaf-butt-/saudi-wahhabism-islam-terrorism_b_6501916.html
[7] Ibid
[8] Available at http://www.cbc.ca/news/world/u-s-admits-funding-syrian-opposition-1.98711

[9] Available at http://www.ft.com/cms/s/0/b2c6b5ca-9427-11e4-82c7-00144feabdc0.html#axzz3s4emEb2l

[10] Available at http://www.wsj.com/articles/SB10001424053111903591104576467631289250392
[11] Available at http://www.theguardian.com/commentisfree/2015/jun/03/us-isis-syria-iraq

[12] Available at http://www.theguardian.com/commentisfree/2015/jun/03/us-isis-syria-iraq
[13] Ibid

[14] See Costigan, Sean S., and Gold, David, eds. Terrornomics. Abingdon, Oxon, GBR: Ashgate Publishing Group, 2007. ProQuest ebrary. Web. 15 November 2015.

[15] Available at https://medium.com/insurge-intelligence/britain-s-secret-ties-to-governments-firms-facilitating-isis-oil-sales-210d21470e65#.paji5uhpn

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