CATF Reports May 11, 2016, 3:12pm


Most media-spun narratives that investigate ISIS-generated revenue tend to focus on the criminal sounding elements that advance their financial growth. For example, of several recent news reports that discuss ISIS’s profits, all mention that “oil smuggling from Syrian refineries remains the group’s primary source of financing.”

While highlighting the group’s oil smuggling activities is certainly consistent with accounts that seek to prove that ISIS is an “illegitimate” caliphate, these descriptions take the focus away from the fact that ISIS also funds itself through everyday work by everyday citizens. In these narratives of illegitimacy, there is no serious consideration of the way that ISIS does, in many places, engage in legitimate government-generated revenue growth, and what that might say about their ability to weather an economic downturn.

While ISIS has certainly lost ground in recent months, both financially and territorially, the biggest threat they pose cannot be explained by Hollywood-style Toyota chases, coalition airstrikes on oil fields, or on border smuggling. Rather, the greatest danger is the way ISIS functions much like any normal society.

Media outlets run a great risk in focusing only on “spectacular” events at the expense of the banal. In doing so, ISIS appears separate from everyday life in Syria and Iraq and, thus, easily targeted and vanquished.

This is certainly not the case. It is to the everyday functioning of society inside ISIS controlled territory, to ISIS’s ability to generate revenue through ordinary means, that we should turn our attention. This is particularly important now as, according to recent reports, the Islamic State’s revenues have fallen by one-third since last summer as a result of lower oil income.

Feeling the pinch, like any other oil-based economy in the Middle East, ISIS is looking to diversify. It is well known that ISIS generates revenue through taxing their constituents, which is why the Iraqi government stopped paying its employees residing in ISIS controlled territories. But in order to get a real sense of ISIS’s power, and a sense of what it will take to defeat them, more reports should focus on what may seem like trifling details: taxation, local businesses, and manufacturing.

So far we know that there is a 10% levy on poultry in addition to an agrarian tax imposed upon everyday agricultural farmers. Many of these farmers cooperate with ISIS, and the tax functions much as it does in any other society: offering jobs, protection against attack, and social services like drinking water.

In addition to taxation, ISIS maintains legitimate businesses, both inside and outside the city. For example, they make use of the hundreds of lakes in Northern Baghdad where fishing is, and has always been, a source of income for Iraqi citizens. ISIS uses these fish-laden lakes, either abandoned by former fishermen or staffed the same way they always have been, to generate millions of dollars of revenue each month.

Inside the city of Mosul, on any given street, ISIS will have taken charge of a string of car dealerships, where the employees working inside are everyday citizens trying to eke out a living in an economically depressed environment. There are also many Iraqi-government abandoned factories that have simply changed ownership to ISIS. In many cases, ISIS serves as management and the people working in the factories are Iraqi citizens.

Fully functioning societies are much harder to target, to eradicate, than oil tankers or airplane hangars. While it is certainly easy to blow up an oil truck speeding down the highway, it is more difficult to blow up a car dealership inside a major city, or to target a factory where civilians work every day much like they do anywhere else in the world.

ISIS has become entrenched into the fabric of everyday society inside their territories. There is no clear way to disrupt local financial endeavors. Coalition aircraft cannot stop this revenue, and neither can drone strikes, without severe civilian casualties. It is at the level of the everyday where ISIS is most dangerous, because it offers the appearance of routine against a backdrop of violence, and most difficult to target. This knowledge should impress upon us the fact that the terror group, while weathering an economic downturn, is going nowhere fast.

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