IS fin troubles could be aggravated: study

The Islamic State may not be earning like it did earlier with an estimate showing that its revenues have halved between 2014 and 2016 to USD 870 million, a latest study has claimed.

The financial troubles could be aggravated if the coalition forces manage to capture Mosul, dubbed “commercial capital” of the IS, it warns. Mosul in Iraq is under the control of the IS.

The study ‘Caliphate in Decline: An Estimate of Islamic State’ s Financial Fortunes’, however, warned that the decline in revenues may not have an immediate effect on its ability to carry out terrorist attacks outside its territory.

“While hurting Islamic State finances puts pressure on the organisation and its state-building project, wider efforts will continue to be necessary to ultimately defeat it,” said the study by The International Centre for the Study of Radicalisation and Political Violence in UK’s Kings College and EY, a multinational professional services firm.

According to the report, the IS’ annual revenue has nosedived since 2014 — from up to USD 1.9 billion in 2014 to a maximum of USD 870 million in 2016. There are no signs yet that the group has created significant new funding streams that would make up for recent losses and with the current trends continuing, the IS’ “business model” will soon fail, it said.

“A careful examination of what is known about Islamic State finances reveals that the group’s loss of territory, coupled with an increasingly effective anti-Islamic State coalition, has severely undermined the group’s finances, leading to a dramatic decline of income,” the study said.

The report said by November 2016, the IS had lost 62% of its mid-2014 “peak” territory in Iraq and 30% in Syria. From a revenue perspective, this means fewer people and businesses to tax and less control over natural resources such as oil fields.

Acknowledging that it is impossible to say exactly how much money the IS has at its disposal, it said the most significant sources of revenue — taxes and fees, oil, and looting, confiscations, and fines — are closely tied to its territory.

The report is optimistic that about the further decline of IS’ revenues. With global coalition forces are trying to recapture Mosul, it said it will have a “significant detrimental effect” on its finances. It, however, warned the possibility of overcoming financial and military setbacks.

(Feb 19, 2017)

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