ISIS in Cash Crunch; Begins Imposing Austerity Measures

Wars are expensive, they get bureaucratic and the enemy will attempt to destroy your income streams. FT reports:

Once smokers were flogged in Syrian territory ruled by the Islamic State of Iraq and the Levant, now they are fined about $65. Local rulers dismantle old state facilities to sell for parts. And shopkeepers complain Isis fighters no longer spend so freely.

The world’s richest jihadi group is not as flush as it once was, say Syrians who live under its rule. It has cut spending on fuel and bread subsidies, while increasingly shaking down locals for cash. Fighters themselves may be feeling the squeeze, too.

“Isis took some kind of financial hit . . . Some fighters’ salaries were cut, including my nephew,” said a man in the eastern city of Mayadeen, who says an apparent drop in the group’s revenues is making it difficult to cover the cost of its expansion in territory and membership since its lightning offensive last year...

Since the coalition began targeting the makeshift refineries and fuel convoys, Isis passed the refinery business on to local allies and now relies solely on crude extraction and sales of about $20 a barrel.

“Without selling the fuel, and only relying on crude, they lose about half of what their oil revenues once were,” said a gas plant worker from eastern Deir Ezzor province..

Opportunities to loot and kidnap for ransom, which Mr Soltvedt said earned Isis around $20m last year and the FATF put at anything up to $45m, have also become rare as the coalition campaign slows Isis’ territorial gains.

Isis, which has lost hundreds of fighters since the coalition strikes, also pays families 900,000 Syrian pounds (nearly $4,000) for each son killed, Raqqa residents say. With over a thousand believed killed in the battle for the border town of Kobani alone, such payments could be an added financial burden.

The group has also seen a string of high profile commanders and emirs, or local rulers, fleeing — often with hundreds of thousands, sometimes millions of dollars. In the past two months, at least five Isis officials have been executed for trying to abscond with large sums of money, according to locals and reports by the Syrian Observatory for Human Rights, a Britain-based monitoring group.