Make us your home page
Instagram

Today’s top headlines delivered to you daily.

(View our Privacy Policy)

Islamic State is in deep financial trouble, study says

LONDON — When the Islamic State advanced in Syria and Iraq in 2014, its fighters looted banks, took over oil fields and kidnapped foreigners, seemingly without facing much resistance. But fortunes have changed, and the caliphate is in deep financial trouble, according to a new study.

The report, released by the London-based International Center for the Study of Radicalization and accounting group Ernst & Young, estimates that the revenue for the Islamic State, also known as ISIS, has fallen by about 50 percent over the past two years.

"It is clear that the Islamic State's business model is failing," said ICSR director Peter Neumann. "It used to be the world's richest terror group because it basically was a state. But its biggest strength at that time — the ability to loot and extract money through taxes in newly conquered territories — became its most significant weakness as it suffered battlefield losses."

The new numbers, based on internal Islamic State documents obtained by the researchers as well as a review of previous analyses, challenge previous estimates of the Islamic State's finances by the U.S.-led coalition against the group, which may have been exaggerated. The study will be presented at the Munich Security Conference today.

The fragility of the Islamic State's financing model was already evident in 2014. Looting, confiscations and taxes constituted the most significant revenue source for the jihadist group at the time. As the group's advance began to stall, the overall share of looting among the group's total revenue dropped from 52 percent in 2014 to 20 percent in 2015.

Taxes and oil revenue became more important, but both are inherently risky ways of earning money for militant groups. The coalition led by the United States targeted the group's oil fields in air strikes as more locals fled its territory.

As local fighters started to push back Islamic State militants in Syria and Iraq in 2016, all revenue sources declined — apart from ransom money paid by governments for kidnapped citizens. The researchers believe that ISIS losing control over the densely populated Iraqi city of Mosul would result in a major drop in revenue for the group and in a significant setback for the financing of its battlefield apparatus.

Islamic State is in deep financial trouble, study says 02/17/17 [Last modified: Friday, February 17, 2017 8:03pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Washington Post.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Editorial: When protest leads to understanding

    Editorials

    The protests against racial injustice by professional athletes across the country include examples of communities where it has not been handled well. And then there is the example set in Tampa Bay.

  2. Why it's too early to give up on the Bucs

    Bucs

    Don't panic. It's not too late for the Bucs.

    Tampa Bay Buccaneers quarterback Jameis Winston (3) and wide receiver Mike Evans (13) celebrate after the defense recovered a fumble during the second half of an NFL game between the Tampa Bay Buccaneers and Arizona Cardinals at University of Phoenix Stadium in Glendale, Ariz., on Sunday, Oct. 15, 2017. LOREN ELLIOTT   |   Times 

  3. Backlog of immigration cases under Trump stymies immigrants in Florida

    Courts

    It was supposed to be a routine green card renewal for a Thai woman who has called Central Florida home for years.

    Immigration lawyers such as Gerald P. Seipp of Clearwater worry that their clients' circumstances will change with long delays in their immigration court appeals, hurting their chances of staying in the country. [SCOTT KEELER   |   Times]
  4. New York town approves Legoland proposal

    News

    GOSHEN, N.Y. — New York is one step closer to a Lego dreamland. Goshen, a small town about fifty miles northwest of the Big Apple, has approved the site plan for a $500 million Legoland amusement park.

    A small New York town, Goshen approved the site plan for a $500 million Legoland amusement park. Legoland Florida is in Winter Haven. [Times file  photo]
  5. First lady Melania Trump donates her inaugural gown to the Smithsonian

    Nation

    WASHINGTON — Melania Trump knew her inaugural gown would be part of history and she had a clear vision for her look, asking the designer for something "modern, sleek, light, unique and unexpected."

    First lady Melania Trump donates her inaugural gown, designed by Herve Pierre, left, to the First Ladies' Collection at the Smithsonian's National Museum of American History, during a ceremony in Washington, Friday, Oct. 20, 2017. [Pablo Martinez Monsivais | Associated Press]