Islamic State lacks funds to keep control of Iraqi, Syrian territory - experts

LONDON (Thomson Reuters Foundation) - Islamic State (IS) militants may ultimately lose the war in Iraq and Syria because they do not have enough money to run the territory under their control, despite holding assets worth more than $2 trillion, international terrorism experts said.

The cost of running an entire administration – paying civil servants and the military, maintaining roads, schools, hospitals, electricity and water networks – is far beyond the reach of Islamic State, said Charles Brisard, an expert on terrorist financing and a consultant on business intelligence.

“That means there will probably come a time when the population could turn against the Islamic State, which is not the case at the present moment, especially … in Iraq,” Brisard said in an interview on Thursday.

Iraq’s Sunni tribal leaders can decide the fate of IS, he added. In 2006 and 2007, they played a major role in fighting the group, then called al Qaeda in Iraq, with U.S. backing.

Since then, however, support for IS has grown, especially among Iraqi tribal leaders who resented being sidelined by former Prime Minister Nuri al-Maliki’s Shi’ite majority government.

The political situation in both Iraq and Syria led to the rise of IS and its capture of territory in both countries, “and may tomorrow decide its fate”, according to the Thomson Reuters report “Islamic State: The Economy-Based Terrorist Funding”.

The report was released earlier this month by Brisard and Damien Martinez, sales director for Thomson Reuters Risk in Western Europe and co-author of “Zarqawi: The New Face of Al-Qaida”.

IS is the world’s richest terrorist organisation, with an income estimated at about $2.9 billion a year, much of it from oil, gas and farming projects it controls. It runs factories, oil refineries and even banks.

U.S.-led air strikes are targeting IS in Syria and Iraq, but the United States does not want to shut down economic activities in IS-contolled areas, Brisard said.

The United States is not targeting oil trucks, for example, because if the strikes kill the drivers, the local population may turn against the Americans, the report said.

IS receives about $30 million a month - 12 percent of its total income - from extortion, according to the report.

Extortion includes tax on cash withdrawals from bank accounts, an $800 tax on each truck entering Iraq from Joradan and Syria, a tax on looting archaeological sites, and a protection tax for non-Muslims.

Income from oil makes up 38 percent of IS’s income, gas 17 percent, kidnap and ransom 4 percent, and donations 2 percent. The rest comes from gas, phosphate products, cement, wheat and barley, the report said.

(Reporting by Alex Whiting, Editing by Tim Pearce)

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