The Dire Economic Situation of the Islamic State: 'ISIS Fighters' Salaries Halved'

The Islamic State group, facing a cash shortage, has reduced salaries across its controlled regions and has instructed residents of Raqqa to pay for municipal services in U.S. dollars, which are traded on the black market, and is releasing prisoners for $500. According to Reuters, due to intensified attacks by the international coalition and measures taken to cut off the group's financial resources, the Islamic State, which once claimed to have created its own currency, is facing serious financial problems. This group, which previously satisfied its fighters with special benefits such as paying for weddings, honeymoons, and child allowances, can no longer provide even minimal benefits like energy drinks or chocolate. This information has been gathered from interviews with several residents of Mosul and families of individuals living in Raqqa. In Raqqa, the self-proclaimed capital of the Islamic State, electricity has been rationed since December, and the prices of essential goods have sharply increased. Salaries for everyone, from armed fighters to employees in all departments, have drastically decreased. Experts say the main priority for the Islamic State is to secure weapons and pay its fighters, but it seems that the savings implemented since late last year have not been able to cover these costs. According to a resident of Raqqa currently at the Turkish border, the Islamic State has instructed the people of Raqqa to pay all taxes and public service fees in dollars, which are obtained from the black market. Experts at the Middle East Studies Foundation, who have seen some of the group's documents, state that the Islamic State has halved the salaries of all its fighters due to the difficult conditions it faces. Reuters adds that a significant factor in the decrease of the Islamic State's income has been the reduction in oil revenue in recent months. Oil has been one of the main sources of income for the Islamic State, but in recent months, attacks by the international coalition have destroyed part of the oil extraction and transportation network as well as several of the group's cash storage facilities. Another factor is the decision of the central Iraqi government to cut off salaries for public sector employees in areas controlled by the Islamic State. The advance of Syrian government forces, supported by Russian airstrikes in Aleppo province, has also put pressure on the Islamic State, and many of the group's fighters stationed in parts of Aleppo have sent their families to Raqqa. According to several residents of the town of al-Bab in Aleppo province, which is controlled by the Islamic State, lower-level fighters are extremely worried about their situation, and a group of residents has recently fled the town, ignoring the warnings and orders of the Islamic State. Those who have recently escaped from al-Bab report a noticeable decline in morale and anxiety among the Islamic State's forces. A former resident of Raqqa now living in Beirut said that Syrian migrants send dollars to help cover living expenses and buy food for their families still in Raqqa. A resident of Mosul now living in border towns in Turkey said that since December, the road connecting Mosul to central Iraq has been blocked, resulting in a sharp increase in prices in the city. The price of gas has increased by 25%, the price of meat by 70%, and the price of sugar has doubled. Iraqi government experts estimate that following the cut in salaries for employees working in areas controlled by the Islamic State, the group's income has decreased by at least $10 million per month, as it collected 20 to 50 percent in taxes from employees' salaries. In the Iraqi city of Fallujah, where the salaries of Islamic State fighters were previously about $400 per month, they have now been halved, and the group releases prisoners for $500 or allows any family to leave the city for $1,000. Residents of most cities controlled by the Islamic State say that in recent months, the group has been fining people for various reasons, and the public believes that all these new strict measures are aimed at extortion and compensating for the group's income shortfall. The group has confiscated everything of value in most of its controlled areas in the past, and the only remaining way is to extort residents. American officials say that Islamic State fighters have less mobility and financial capability compared to the past, but the group still controls extensive areas, and the Syrian army has made little progress in reclaiming areas controlled by the Islamic State. Some experts believe that the Islamic State is now focusing on Libya, which is under less pressure, to secure its funding. The Soufan Center, in an analytical report published in late January, states that although some benefits for Islamic State fighters have been cut, they still receive food allowances and free electricity. Some experts believe that these financial constraints will not be fatal for the Islamic State but may mark the beginning of a gradual decline for the group.