The Pillars of ISIS's Economy Have Collapsed

Note -- In the history of global terrorism, which has very ancient roots, no terrorist network has achieved financial resources on the level of the caliphate known as the "Islamic State of Iraq and Syria" (ISIS). However, the rich treasury of ISIS did not last long, and following the defeats it suffered over the past year, culminating in the liberation of the major city of Mosul in Iraq, its financial resources have significantly declined. Today, it can be confidently stated that the backbone of the economy of this self-proclaimed state has been shattered. The emergence and survival of a terrorist group is intertwined with financial resources. Terrorists need money to protect themselves from the danger of pursuit and arrest, to relocate, to secure food and shelter, and most importantly, to obtain weapons and explosives. Maintaining a terrorist network in a city and region over a relatively long period (like the terrorists of September 11, 2001, or the terrorists responsible for the extensive Paris attacks in November 2015) requires considerable financial resources that are not easy to secure. When a terrorist organization establishes itself permanently and systematically in a territory and takes control of it (like al-Qaeda's establishment in Taliban-controlled Afghanistan or ISIS's establishment in Iraq and Syria), costs increase astronomically. At its peak, ISIS controlled a relatively large territory with a population of eight million. In this situation, this terrorist organization operated like a government, establishing ministries, appointing rulers and governors, employing thousands, and escalating its military expenses. It is worth noting that to prove its "statehood," ISIS resorted to one of the most important symbols of sovereignty: minting coins. In fact, this terrorist organization emulated the monetary system of the Umayyads, circulating gold, silver, and copper coins in its controlled territories, hoping one day to end the "imperialist" dominance of the dollar with these coins. Where does the budget for such an extensive apparatus come from? Before facing extensive attacks in Mosul and Raqqa, ISIS primarily funded itself from eight main sources: 1) Oil - At the height of its power, 25 to 35 percent of ISIS's financial resources came from the sale of oil extracted from about eight to ten oil fields in Iraq and Syria under its control. To manage the fields, refineries, and oil-related business, ISIS created an organization similar to a real national oil company, composed of some former personnel from the oil sectors of Syria and Iraq, as well as experts from outside the region who were hired at high salaries. ISIS sold its oil at prices significantly lower than the market rate to customers, especially in Syria and Iraq, as well as neighboring countries, utilizing the infrastructure established by Saddam Hussein during the sanctions. Before ISIS's oil fields and facilities were destroyed under the pressure of coalition attacks and a large portion of the Islamic Caliphate's territories were lost, the organization's revenues from oil were estimated at about two to four million dollars a day. 2) Taxes - ISIS, considering itself a government, collects taxes from the population living in its controlled territories. This includes consumption taxes, communication service taxes, truck transit fees, and jizya from "people of the book," among others. Given the prevailing poverty in these areas, the revenue from this source was likely not substantial. 3) Seizure of people's property - The properties of people fleeing from ISIS-controlled areas or those accused of violating the organization's imposed laws were seized. At its peak, ISIS seized a large portion of agricultural lands and both movable and immovable properties in its controlled territories, generating significant revenues from their exploitation or sale. 4) Financial aid - There are conflicting reports regarding direct financial assistance from some governments to ISIS. However, there is no doubt that wealthy individuals from Gulf Arab countries contributed to the emergence and rise of ISIS through their financial assistance. It is even said that aid from this source was initially the most important source of funding for this organization. 5) Kidnapping - Capturing citizens of Western countries and representatives of international organizations and releasing them for large sums of money has been another source of income for ISIS over the past few years. 6) Bank looting - In all cities that were occupied by ISIS, the money in bank branches fell into the hands of this organization. The most significant loot obtained this way was during the capture of Mosul in the spring of 2014, where it is reported that about five hundred million dollars were looted from the Central Bank branch in this city. 7) Sale of human organs - Both Iraqi medical sources and the High Commissioner for Human Rights state that ISIS profits from the sale of organs from prisoners, those executed, and injured soldiers. 8) Sale of antiquities - The ISIS organization showcases the destruction of historical buildings in its propaganda videos. Today, it can be confidently stated that before explosives are used on these structures, parts that seem sellable are separated from the whole and handed over to other mafia networks specializing in the sale of historical artifacts. With the liberation of Mosul from ISIS, the self-proclaimed Islamic Caliphate has reached the final stages of collapse and has lost more than sixty percent of its controlled territories compared to its peak expansion. Alongside this significant retreat, the financial resources of this terrorist organization have also collapsed dramatically. According to informed sources about ISIS's financial capabilities (including IHS Markit), the organization's revenues have decreased to one-fifth over the past two years. Given the loss of territories and the destruction of oil fields due to airstrikes, the organization's income from oil has fallen to one-tenth of what it was before. Under financial pressure, ISIS has significantly reduced the salaries of its fighters. The collapse of economic resources, like heavy military defeats, indicates the complete disintegration of the self-proclaimed Islamic Caliphate in the near future. However, this collapse does not mean the end of "ISIS" terrorism. There is a risk that, at least in the short term, the fighters of the defeated "ISIS" will intensify their terrorist attacks. Nevertheless, due to the drying up of this organization's financial sources, it seems unlikely that these attacks will continue for long.