Will this be enough to take this extremist group down?
According to the Associated Press, the Islamic State group has slashed salaries across the region due to a cash shortage. It has also asked Ragga residents to pay utility bills in black market American dollars, and is releasing people who have been detained for $500 per person.
The group that once boasted about minting their own currency are currently having challenges meeting their expenses due to coalition airstrikes and other tactics that have eroded millions from their finances since last fall. Islamic State had generated loyalty among militants with good paying salaries, honeymoon and baby bonuses, and has now halted even smaller “perks”.
Urban centers are now dealing with shortages and widespread inflation due to necessities dwindling. Those with connections to IS were interviewed, and claim that the Islamic State is turning to alternative funding streams including those in Libya.
In Raqqa, salaries have been cut in half since December, electricity is being rationed, and prices for the basics are soaring.
“Not just the militants. Any civil servant, from the courts to the schools, they cut their salary by 50 percent,” said a Raqqa activist now living in the Turkish city of Gaziantep, who remains in close contact with his native city.
The 50% cut wasn’t enough for Islamic State, though, as they need funds to replace weapons lost in airstrikes and battles. It also pays its fighters first, as well. According to an estimate by Aymenn Jawad al-Tamimi, who is a researcher with the Middle East Forum who sources IS documents, these expenses account for two-thirds of IS’s budget.
The previous two weeks has left the group beginning to accept money for “tax” payments, water and electric bills.
These dire circumstances include a drop in oil prices globally, which was once a key source of income. Airstrikes has also targeted cash stores, oil infrastructure, supply line cuts, and has impacted the Iraqi government’s decision to stop funding civil servants in territories controlled by the extremists.
Meanwhile, in Iraq, where Islamic State has been loosing ground, the government has cut off salaries to government workers within locations controlled by the extremists. Officials estimate that IS taxed the salaries between 20-50%, and now analysts are estimating a loss of $10 million each month in revenue each month. The good news is that between the financial loss and the U.S. led bombing of cash warehouses, American officials are hopeful that IS’s wealth will be limited decreasing their power.
According to the Associated Press, Lisa Monaco, President Barack Obama’s counterterrorism adviser said, “We are seeing our efforts having some effect on their financial flows. And it’s difficult to get a handle on just how much because of the different illicit ways in which they are handling their finances but you’ve seen the efforts that our military has taken to take out cash storage sites, and I think it is our hope and expectation that that will have demonstrable effects. On what order of magnitude, I think it’s difficult to say.”
American officials report that fighters are more restricted in their movements and spending as of late. The group, however, still controls a large amount of territory, and the Syrian government has made few gains against the extremists. Islamic State, for now, continues to maintain their threats, and payments for anyone who waivers in their allegiance.
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