TerrorismFollow the Money: Thwarting Islamic State's Plans for a Comeback
With the end of its territorial caliphate, the Islamic State will almost certainly attempt a comeback. Such efforts will require money. A new RAND report examines the group as an insurgency and a self-styled caliphate, with a focus on how the group managed its finances. The report recommends that the U.S. government will need to stay involved with counter–Islamic State activities across several lines of effort, including counter-finance and potentially including military action.
With the end of its territorial caliphate, the Islamic State will almost certainly attempt a comeback. Such efforts will require money. A new RAND report examines the group as an insurgency and a self-styled caliphate, with a focus on how the group managed its finances, drawing from the literature, the group’s documents, and interviews with individuals who lived under the caliphate.
The report recommends that the U.S. government will need to stay involved with counter–Islamic State activities across several lines of effort, including counter-finance and potentially including military action.
The Islamic State has prided itself on drawing from local funding sources rather than external donations. As a territorial caliphate, it could openly levy taxes and fees and sell oil from fields it controlled to cover its expenses. Now that it can no longer rely on such sources, the group will return to activities that it has used successfully in the past, as an insurgency.
“Criminal activities will prove useful, with its members seeking to extort, kidnap, steal, smuggle, and traffic to obtain the money they need to finance the group’s activities,” said Howard J. Shatz, an author of the report and senior economist at the RAND Corporation, a nonprofit, nonpartisan research organization. “On top of this, the Islamic State likely has detailed information on the population it once ruled, and it appears to have sizable assets in reserve.”
RAND notes that as an insurgency, rather than a territorial government, its expenses are far lower than they were at the peak of its power. With the loss of the territorial caliphate, there is no need to provide services to a populace. With a significantly lower operating budget, continued revenue-generating activities and the cash the Islamic State hoarded will provide it with adequate funds to survive as a clandestine terrorist movement with the ability to wage prolonged guerilla warfare throughout Iraq and Syria.
