Contrary to what has been assumed so far, black market oil sales were not the only and not even the largest revenue stream for ISIS, an investigation of The New York Times has revealed.
Islamic State militants have been almost entirely expelled from Iraq and Syria, but for nearly three years they had held vast territories in the Middle East because they ran those areas with two complementary tools—brutality and bureaucracy—according to the team of NYT journalists and experts who have analyzed more than 15,000 pages of internal ISIS documents found in Iraq after the terrorists were driven out.
According to those documents, the Islamic State was able to hold onto vast swaths of Iraq and Syria between 2014 and 2017 because it taxed almost every business and production under its rule, and was not trying to replace government agencies and employees, but would rather have them continue to work.
ISIS used every single service, business, and agricultural production to squeeze revenues out of it, the internal documents analyzed by the NYT show. This could partly explain why the militants were able to keep hold of territories for years—their revenue stream was highly diversified. Monthly budgets and ledgers found in Iraq after the militants were pushed out show that ISIS monetized every inch of the territory they had under control and taxed literally everything—every bushel of wheat and every fruit sold on markets they controlled. Related: Is The Iran Nuclear Deal Coming To An End?
What’s more surprising is that ISIS earned much more from tax revenues than from oil smuggling, according to the NYT journalists and the experts they asked to analyze the terrorists’ internal documents.
“It was daily commerce and agriculture — not petroleum — that powered the economy of the caliphate,” NYT’s Rukmini Callimachi writes.
Documents recovered in Syria showed that the ratio of income earned from taxes compared to proceeds from oil sales was 6:1, according to experts asked by the NYT for analysis.
By Tsvetana Paraskova for Oilprice.com
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