Islamic State sees sharp drop in its revenue

“The Islamic State is still a force in the region, but, this drop in revenue is a significant figure and will increase the challenge for the group to run its territory in the long term,” expert says.

By ARIEL BEN SOLOMON
Updated: APRIL 18, 2016 01:07
ISIS female slaves (photo credit: ARAB MEDIA)
ISIS female slaves
(photo credit: ARAB MEDIA)
Islamic State’s monthly revenue has dropped almost 30 percent in the past year and the terrorist organization has resorted to imposing fines to make up the funds, new analysis released Sunday by IHS revealed.
In mid-2015, Islamic State’s overall monthly revenue was around $80 million, but it had declined to $56 million as of March 2016 as oil production fell to 21,000 barrels per day from 33,000.
“The Islamic State is still a force in the region, but, this drop in revenue is a significant figure and will increase the challenge for the group to run its territory in the long term,” said Ludovico Carlino, a senior analyst at IHS. “ According to the report, the decline is highly likely to reflect the intensification of the US-led coalition’s military and, to a lesser extent, Russian efforts to degrade Islamic State’s capability to produce oil.
About half of the group’s income is from taxation and confiscation and around 43% from oil revenue with drug smuggling, electricity sales and donations making up the rest.
In addition, the population that Islamic State controls is dropping, further affecting revenue.
“The Islamic State has lost about 22% of its territory in the past 15 months,” said Columb Strack, also a senior analyst at IHS. “Its population has declined from around nine million to around six million. There are fewer people and business activities to tax. The same applies to properties and land to confiscate.”
The report was issued by the team responsible for the IHS Conflict Monitor, which tracks events in Iraq and Syria from social media and other open sources.
To make up the shortfall, Carlino said IHS research determined that Islamic State is increasing taxes on basic services and coming up with new ways to get money from the population.
“These taxes include tolls for truck drivers, fees for anyone installing new or repairing broken satellite dishes and ‘exit fees’ for anyone trying to leave a city.”
Carlino also pointed out that fines are being imposed for driving on the wrong side of the road or not answering questions about the Koran correctly.
Furthermore, according to the report, Islamic State began accepting payment for violations instead of the corporal punishments proscribed under Shari’a law.