The Economist - The Caliphate Cracks

[Algernon Moncrieff]

The state of Islamic State

The caliphate has been pushed out of the Syrian town of Kobane by Kurdish fighters, backed by American air power. It is being squeezed in Tikrit (the tribal base of the former dictator, Saddam Hussein) by the Iraqi army and Shia militias co-ordinated by Iran. Compared with the peak, when it was at the gates of Baghdad, its territory has shrunk by about 25%.

IS’s funds are dwindling, too. America and its allies have bombed lucrative oil facilities. Most of the hostages have been sold or murdered in video-recorded beheadings. Now that IS’s forces are retreating, the loot of conquest has dried up. Some analysts reckon it may have lost up to 75% of its revenues. That makes it harder for IS to keep fighting and to provide services to the roughly 8m people living under its rule.

That may help explain signs of internal tension. The movement has started to kill its own followers, sometimes for fleeing before the enemy and on at least one occasion supposedly for zealously beheading too many people. Residents complain of extortion, violent repression and declining public services. There are reports of tensions between local and foreign members over disparities in pay.

Judged by its own standard, then, the caliphate is failing as an all-conquering state and model for society. That matters because a proto-state with a large territory and population to defend is also more vulnerable to setbacks than terrorist groups that are not rooted to a patch of land. Precisely because IS claims to be running a model Islamic state, its visible failure exposes the bankruptcy of its ideology and the hollowness of its claims to would-be recruits. If, as some say, the secret of IS’s success is success itself; then failure will gain momentum, too.

http://www.economist.com/news/leaders/21646750-though-islamic-state-still-spreading-terror-its-weaknesses-are-becoming-apparent

This article is from Late March. Refer to http://www.democraticunderground.com/10026564857 for an article with a polar opposite view.

[leveymg]

1. IS has always been heavily dependent upon funders in KSA and the GCC states. It was never majority

self-financed. Even at its height, oil was less than half of its budget, and kidnapping and plunder of art treasures far less.

I posted this in Feb: http://www.democraticunderground.com/10026192755

Proposed UN Sanctions Do Not Go To Most ISIS Funding from Wealthy Donors

There is broad agreement that "substantial" funds are still reaching ISIS from wealthy elites in Saudi Arabia, Qatar and other Gulf states. As the Pentagon announced yesterday, oil exports now do not account for most of ISIS finances. ISIS is instead depending on donations, “a lot of donations,” according to Rear Admiral John Kirby, spokesman for the Joint Chiefs of Staff.

Further sanctions do not threaten the primary source of finance for the so-called Islamic State (IS), reported to be in excess of $2 billion last year. On Thursday, a UN measure was proposed by Russia that would sanction the trade in oil and stolen antiquities that partially funds ISIS funders. However, according to the NYT, it does not add to the existing list of individuals named for sanctions. http://www.nytimes.com/2015/02/07/world/middleeast/un-prepares-resolution-to-confront-islamic-state-on-oil-and-antiquities.html?_r=0

This spares the US and NATO the difficult task of having to immediately punish most of the same Sunni states with which it has been previously cooperating in prosecuting the war in Syria. The measure discussed on Friday would, however, specifically sanction parties engaged in smuggling oil from ISIS controlled areas, paying ransom, and the sale of stolen antiquities, the latter valued at $35 million last year.

Nobody seems to want to put a finger on exactly how much cash is still flowing to ISIS from wealthy ISIS funders, and who exactly they are. But, everyone agrees that support from the Saudis and Gulf elites continues to be substantial. See, http://www.nbcnews.com/storyline/isis-terror/whos-funding-isis-wealthy-gulf-angel-investors-officials-say-n208006

In 2014, Saudi Arabia publicly agreed to clamp down on some donations from its citizens and religious foundations. As a result, most private funding now goes through Qatar. The UN Security Council Resolution 2170 passed last August 15 named only six individual ISIS leaders for direct sanctions. The new measure does not expand that list, but calls for a committee to nominate others for violation of existing UN resolutions.

The effects of the additional sanctions on oil exports proposed would have its primary impact on crude oil smuggling in and out of Turkey. The majority of ISIS oil revenues are derived through the black market in that country. Last June, at its height, a Turkish opposition MP and other sources estimated the annual oil revenues at $800 million. http://thehill.com/policy/energy-environment/221272-report-isis-oil-production-worth-800m-per-year

If accurate, oil sales was about 40% of the total ISIS operating budget as stated by the group. However, even at its height, petroleum accounted for only a fraction of ISIS funding. Some western estimates placed the IS annual total budget as high as $3 billion. See, http://thehill.com/policy/defense/228465-isis-puts-payments-to-poor-disabled-in-2-billion-budget; http://www.ibtimes.co.uk/isis-news-caliphate-unveils-first-annual-budget-2bn-250m-surplus-war-chest-1481931

The $800 million figure is actually at the top end of the estimates. US sources quoted by CNN last October stated that ISIS oil income was more likely half that figure: http://www.cnn.com/2014/10/06/world/meast/isis-funding/

The U.S. Treasury Department does not have hard figures that it can make public on the group's wealth but says it believes ISIS takes in millions of dollars a month.

Sources familiar with the subject say that ISIS' "burn' rate" -- how much the group spends -- is huge, including salaries, weapons and other expenses. For ISIS' oil sales, sources told CNN, the group probably makes between $1 million and $2 million per day, but probably on the lower end.


Along with everyone else, the returns on ISIS oil are probably a fraction of what they were at the height of world oil prices a year ago. Plus, the US and allies are bombing the group's oil platforms and vehicles. That has cut production and export to the point where US commanders now acknowledged that oil sales aren't the source of most ISIS funds, and that they are coming from donations, "a lot of donations":

The Islamic State of Iraq and Syria (ISIS) is no longer relying on oil as its main source of revenue to fund its terrorist activity, according to the Pentagon.

“We know that oil revenue is no longer the lead source of their income in dollars,” Pentagon spokesperson Rear Admiral John Kirby told reporters during a press briefing on Tuesday.

ISIS’ loss of income is compounded by its losses on the battlefield as the group has “lost literally hundreds and hundreds of vehicles that they can’t replace,” Kirby said.

“They’ve got to steal whatever they want to get, and there’s a finite number.”

ISIS is instead depending on “a lot of donations” as one of the main sources of income. “They also have a significant black market program going on,” Kirby said.
http://english.alarabiya.net/en/News/middle-east/2015/02/05/Pentagon-oil-is-no-longer-ISIS-main-source-of-income-.html

That leaves a big hole in the Caliphate's budget - that gets filled by someone.

Imposition of expanded UN sanctions would entail difficulties and costs for the US, particularly with Saudi Arabia. Therefore, it should not come as a surprise that the Security Counsel measure is limited, and does not yet show if the world is truly serious about eradicating ISIS.

[fadedrose]

2. First link is good news

but the 2nd isn't.

Nobody really knows how the people in ISIS feel - some love the killing for killing's sake, and some for love of Allah and promises of heavenly reward. The 2nd link is more recent and tells that a couple of groups are merging.

But the first link shows that beheadings and violence have gone too far for some, and ISIS even kills its own for leaving the battles instead of fighting.

Thanks for posting. I look for non-political posts, have commented on Jenner, and am interested in your topic.