Turkey’s Jarablus operation deals major blow to ISIL revenues

Turkey’s Euphrates Shield operation into Syria has delivered a major blow to the revenues of the Islamic State of Iraq and the Levant (ISIL), or DAESH, according to a report by the London-based International Center for the Study of Radicalisation and Political Violence (ICSR) and leading consultant group Ernst and Young (EY). The report titled “Caliphate in Decline: An Estimate of Islamic State’s Financial Fortunes” was published during the Munich Security Conference on Feb. 17-19.

The report states that the loss of populated centers, “alongside key transit points in Syria such as Jarablus, meant that taxation revenue in 2016 decreased to $200-400 million” from a level of “$400-800 million in 2015.”

The ISIL-held Syrian town of Jarablus by the Turkish border was captured by the rebel Free Syrian Army (FSA) forces, supported by Turkish forces, on Aug. 24, 2016, on the first day of the Euphrates Shield operation by the Turkish military into Syria. The operation cut ISIL’s contact with the Turkish border, while largely clearing ISIL militants from the town of Dabiq (which has symbolic importance for ISIL due to its apocalyptic place in Islamic belief, where the armies of the Mehdi, or Messiah, will have the final battle with the armies of the Anti-Christ) and the key transport town of al-Bab. So far, 68 Turkish soldiers have been killed in ISIL attacks in Syria in order to clear more than 1,900 square kilometers from their control. The Turkish authorities say the aim was to clear at least 5,000 square kilometers, which could later be used as a safe zone for refugees and the training of “moderate rebel forces,” if internationally accepted.

According to the report, ISIL’s “most significant sources of revenue are closely tied to its territory. They are: (1) Taxes and fees. (2) Oil. (3) Looting, confiscations, and fines.” The report says it could find “no hard evidence that foreign donations” have been major sources of income, while revenue from the sale of antiquities and kidnapping for ransom are also unlikely to have been major sources of income, despite general public belief to the contrary.

As a result, the loss of territories along with their population amounts to a major loss of income for ISIL.
The report states that when ISIL captured the Iraqi city of Mosul on June 10, 2014 its militants looted up to $1 billion over a couple of days, boosting ISIL’s total revenues over that year to an estimated amount of nearly $2 billion. It also got its hands on mostly U.S.-donated arms, ammunition and military vehicles left behind by the Iraqi military garrison there that escaped without fighting. Before Mosul, ISIL had captured the Syrian city of Raqqa and announced it as its capital. Today those two cities are left as two major assets in ISIL’s hands - in military, political and financial terms.

The Iraqi army has just launched another campaign to encircle Mosul for a final operation to take out ISIL. Raqqa is not as big as Mosul, (which is the second biggest city in Iraq), but it is still a sizable city with a mostly Sunni Arab population. 

The U.S. has been putting military pressure on Raqqa for almost a year with air strikes in support of ground forces of the Syrian Democratic Forces (SDF). Turkey objects to that because the backbone and majority of the SDG is made up of the Democratic Union Party (PYD), the Syrian sister (or “cousin” in the words of former CIS head David Petraeus) of the outlawed Kurdistan Workers’ Party (PKK), designated a terrorist organization also by Washington.

Turkish President Tayyip Erdoğan suggested to U.S. President Donald Trump on the phone on Feb. 8 that they could carry out the Raqqa operation together, with the help of Arab rebel forces that proved a success in Turkey’s Euphrates Shield operation - if the U.S. removes the PYD from the Raqqa operation. But Washington’s decision still remains unclear.