Currency, petrol and the corruption behind the ISIS enigma

In recent days, ISIS social media has been showing off its long-anticipated currency. Rumours have been circulating for many months, but they were embellished in November 2014, highlighting not only the group’s geopolitical expansion, but also its infiltration into the societies it invades. Pictures of the coins have been posted on social media but it is unclear whether ISIS has enough resources to have them in circulation before Eid, as has been claimed. The group has exaggerated its prospects in the past but, in any case, this is symbolic of the way that ISIS wants to develop.

On 10 June, ISIS started a fuel blockade of rebel-held areas in northern Syria. Since then, bread prices have tripled and hospitals have been less able to function due to a steep rise in petrol prices. Local people thus have an extra burden to shoulder, along with the inevitable threat of shelling by regime forces. The group started this because it anticipated rebel advancement into northern Aleppo and wanted to block it by any means possible. Again, this shows that its power grab is not through aimless attempts at scattering influence through terror, but is very strategic. ISIS thinks in the long term and is fulfilling ambitions that no other terrorist group in history has been able to do; it is confusing policy experts globally.

ISIS has a unique aim that sets it aside from other terrorist groups; it doesn’t only seek power and territory, but also wants to govern. Inside the self-proclaimed state, there are the same institutions that are associated with a modern nation state.

Taking the issue of ISIS expansion right back to its basics, it grew over a governance gap which years of civil conflicts and foreign intervention have created in Iraq and Syria. ISIS took advantage of the sectarianism in Iraq and the sectarianism rising in Syria since 2011. Its tactics can be boiled down to surgically assessing the gaps in society to infiltrate through propaganda, assessing the discontent that comes with the governance gap, and then ruling through merciless violence.

Not only does ISIS have the means to govern, but also the finance. Its estimated worth is now $2 billion, which doesn’t only come from selling oil and looting; a large proportion also comes from heroin trafficking. It is estimated by the Russian Federation Drug Control Service that ISIS makes $1 billion per year on Afghan heroin trafficked through its territory. If it succeeds in making a leap into the European drugs market, that could rise to $50 billion. This diversification of their funds, as opposed to the traditional tactic of terrorist groups relying on funding through donors, makes its governance more sustainable.

In Syria, much of ISIS’s success was in taking over oil and gas fields, making them players in Syrian civil society, rather than against it. Currently, ISIS has taken over 80 per cent of Syrian oil and gas. Its monopoly has given it such power that it is deemed to be unchallengeable by the Syrian regime and so it is dealt with. Both the FSA and the Syrian regime have purchased oil from ISIS, with Bashar Al-Assad even striking a few business deals with the group. In March, a Syrian-Greek citizen of Christian origin, George Haswani, who owns one of Syria’s largest engineering firms and is close to the Assad regime, was hit with EU sanctions for dealing with ISIS on behalf of the Damascus government. His company, HESCO, operates a natural gas production facility in the city of Tabqa, which was captured by ISIS last August, yet it still supplies fuel to Assad-controlled areas. Because of such diplomacy, politically ISIS has put itself in a stronger position than other groups fighting in Syria because as far as the regime is concerned, it is now at the lower end of the list of groups to fight. ISIS remains a target, claims NGO Raqqa Is Being Slaughtered Silently, not least because it recently publically executed spies who were believed to be working for Assad and the Kurdistan Workers Party; it is tactful in using its power to keep its enemies at bay.

ISIS has even created a welfare system to perpetuate its expansion. This is prevalent in all ISIS-controlled areas, but the Syrian city of Raqqa is an example that will be used for the sake of explanation. ISIS has naturalised the societies it infiltrates into two classes: active members and civilians who will not fight against the group. Those who have had their cities taken over by ISIS are forced to live in poor economic conditions with impoverished services and virtually no health and food security. They are subject to brutal punishment, such as lashes and execution, if they do not follow ISIS legislation; women become the objects of men, not even being allowed to leave the house without the supervision of a male from their immediate family. ISIS members, however, enjoy decent financial security. One does not even need to fight for ISIS, only work for their companies to have some form of security. In Raqqa, those who sustain the ISIS civil service get paid slightly less than what they would have done in pre-war Syria. One media report based on access to anonymous officials in Raqqa revealed that doctors who work for ISIS get paid $1,500 a month, while engineers in the ISIS-controlled oil and gas fields get $2,500 a month.

In terms of the parties fighting ISIS, not only are some of them corrupt and have dealings with the group, but there is also a matter of divisions within the opposition. The Iraqi army is notorious for its internal divisions and, since the ousting of Saddam Hussein, has only got worse. Currently, there is a consensus that the Iraqi army is only trying to fight ISIS to enforce Shia rule and restore corruption in the country, but on their own terms at a cost to Iraqi Sunnis. After the geopolitically strategic city of Ramadi was captured by ISIS last month, many Sunnis sought refuge in Baghdad but were turned away; they could choose to go back to Ramadi and live under ISIS, or be homeless.

Even the Kurdish forces (Peshmerga) that have proven to be the most effective fighters against ISIS, and the most organised, still lack the capability to unite and fight efficiently. The political split in the militia between the Kurdistan Democratic Party (KDP) and the Patriotic Union of Kurdistan (PUK) has drifted into an intra-army power struggle. The PUK has accused Western sponsors of favouring the KDP in arms and training, though the KDP has reservations about the PUK’s policy of aligning itself to Iran and Turkey for military assistance in defeating this common enemy. Much of the Arab Iraqi community is hesitant to support the Kurds because of Kurdish separatist sentiments.

The expansion of ISIS is a security threat that affects the international community as a whole, but the fight against it is scattered, disorganised or hypocritical. ISIS grew by taking advantage of the social rifts that already existed in Iraq and Syria and continues to take advantage of them as these divisions play out in the fight against the group. It’s wrong to say that ISIS is not unique and can easily be defeated as a result of this, because it has evidently taken the concept of terrorism to a new level. At the same time, though, when looking at counter-terrorism, it is clear that defeating the group can’t be done solely through military means; political efforts are also necessary. The factions fighting ISIS on the ground need to be rejuvenated politically for unity’s sake. Such a task at this stage, when political rifts are so deeply entrenched in society, some of them decades old, is near impossible in the foreseeable future. That’s why defeating ISIS is such a challenge.

The views expressed in this article belong to the author and do not necessarily reflect the editorial policy of Middle East Monitor.