Saturday, 6 February 2016

Where Does ISIL Get Money From?


Being one of the world's most nefarious organisations doesn't come cheap, not least for ISIL (or ISIS, Daesh, or whichever of their various names you choose). So where do they find money to carry out their operations? 



This is an important question to consider, not just for the sake of interest, but in the fight against this group that has plagued the Middle East and other parts of the world in the past few years. Of course, a typical response to the group's growing presence would be for other countries such as the US to become involved militarily- but, as Iraq showed just a decade ago, this may not be the best idea. Crippling the group financially is the next best strategy- and knowing where ISIL's income comes from guides us in this aim.

1. Drugs
According to the Russian Federal Drug Control Service, ISIL are making as much as $1bn every year through sales of drugs. This is not a new tactic for military groups in the region- Al Qaeda, for example, are known to take advantage of Afghanistan's many poppy fields. And despite the fact that Afghanistan remains the most profitable source of drugs such as opium in the region, ISIL is challenging this as they use their conquered lands to increase production.

Furthermore, the group is taking advantage of the fact that many locations under its control are between Afghanistan and Europe, by charging for use of established drug trafficking routes.

The consequence of this, according to the Russian report, is that as much as half of the heroin in Europe has been produced or trafficked to the financial benefit of ISIL.

2. Booty
No, not that type. Perhaps 'loot' would be a better word.

ISIL has taken full advantage of its expanding presence in the Middle East to make itself wealthier. The group have looted items of enormous value, most notably historical artefacts from Iraq and Syria. A US raid of an ISIL commander's house found 400 valuable artefacts dating back to as far as 879 BC, ready to be sold on the black market. The head of UNESCO claimed ISIL's "looting of archeological sites and museums... has reached an industrial scale of destruction".

One of the more spectacular lootings carried out by ISIL however was the heist of Iraqi city Mosul's central bank in June 2014- this no doubt helped to accelerate the group's growth, bagging them an estimated half a billion dollars in cash.

3. Natural Resources
Iraq holds 40% of the world's oil reserves- 10% of which is
controlled by ISIL.
It is no secret that the Middle East has a wealth of natural resources, notably oil and gas, and ISIL have indeed milked this proverbial cow. Iraq alone is the world's 4th largest exporter of oil, home to 40% of the world's reserves. As well as controlling 10% of Iraq's oil reserves, according to Jean Charles Brichard and Damien Martinez of Reuters, ISIL has control over as much as 60% of Syria's oil production, together enabling a production capacity of 80-120 thousand barrels of oil a day. Though this is not an especially significant amount on the global scale (the US, for example, produces about 9.3 million barrels of crude oil alone daily), it gives ISIL a huge financial boost- according to Brichard and Martinez it brings them a profit of as much as $1.46bn a year. Not much for a country like the US, but for an organisation like ISIL, plenty.

According to the same report, ISIL's control of natural gas plants in the region could generate as much as $979m a year.

4. Taxes
Benjamin Franklin's iconic quote of nothing being certain "except death and taxes" even applies to ISIL- who have a rather comprehensive tax system over its controlled territories. These taxes don't just apply to goods traded, or social welfare and public services- they are implemented on cash withdrawals from bank accounts, and even on looting of archaeological sites.

Linking back to our first point on drugs, travel through ISIL controlled territories is also taxed- for example, entering Iraq from Jordan or Syria comes at a cost of $800 per truck. Brichard and Martinez's research finds that in Mosul alone, taxes raise $8m for ISIL each month, and in Iraq and Syria together an estimated $30m.

5. Governments
Finally, governments of local nations have been a source of income for ISIL. Though in recent times this has not been a major portion of ISIL's income, local governments such as those of Saudi Arabia and Qatar played massive roles in funding ISIL's rise. The political reasons behind such support are numerous and complex in nature; however, one significant reason for support of ISIL finds its roots in the Shia-Sunni divide in the Middle East.

ISIL is a Sunni group that follows the 'Wahhabi' doctrine- the same strand followed officially by Saudi Arabia. With tensions rising between Sunni Saudi Arabia and Shia Iran, a number of proxy wars have been brewing in the Middle East, the most notable of which was between Iran and Shia-allied Syrian President Bashar Al Assad and the Syrian rebel group the Free Syria Army, many of whose members soon became what we know as ISIL. So, in supporting the FSA with weapons and funding, Saudi and its allies such as Qatar were battling Assad, and thus Iran.

Support from local Sunni governments has become lower in scale and profile recently, as they begin to realise the monster they helped create.

Of course, there are many more sources of income for ISIL, but here we have covered just a few. It is interesting to identify some parallels between ISIL's funding and that of North Korea, as we explored earlier- notably the black market drug activity and utilisation of natural resources.

Read James Rosanwo's opinion piece on what to do about ISIL: Is The Military Invasion of Syria A Viable Option?

and find our article on North Korea here: How Does North Korea Make Money?

What is your opinion on ISIL and its funding? What do you think the most effective way of battling ISIL is? Leave a comment and your opinion below!  

Mohammad Lone Editor