The Islamic State

The Disciplined, Well-Organized & Violent Push for the Revival of the Caliphate

Executive Summary

On June 29, 2014, the Islamic State of Iraq and Syria (“ISIS”) declared the revival of the Caliphate, and renamed itself the Islamic State (“IS”). Led by Abu Bakr al Baghdadi, the Islamic State’s stated objective, or “business model”, is the re-establishment of a Sunni caliphate, an Islamic state governed by Sharia law. Despite its numerous perversions of the Islamic faith, IS asserts religious authority to justify its legitimacy and argues that its actions are in the interest of reviving Islam, uniting the Muslim world under truly Islamic rule, and fulfilling the orders of God.

In order to support this objective, IS executes on a well designed and organized operating model, which includes four primary components: military, administrative, financial, media [1]. These areas of operations are highly integrated and function in a coordinated fashion in the advancement of the declared Caliphate.

In light of its territorial gains, sustained operations within Iraq and Syria, and ongoing recruitment of international supporters, it is clear that the Islamic State has been very effective at aligning its operating and business models.

Military Operations

The military activity of IS is the most widely covered aspect of its operating model. Historically, IS’s military strategy focused on conquering physical territory in Iraq and Syria, diverging from predecessor groups who centered their efforts on civilian based attacks in Western countries.

IS leverages an enthusiastic and determined network of fighters who have a reputation for violence [2]. While the CIA estimated the number of IS fighters to be between 20,000 and 31,500 in late 2014, assessments are extraordinarily wide-ranging, with some reaching as high as 200,000 [3].

IS has enjoyed significant military success and currently commands a region roughly the size of Belgium [4]. In al-Naba, its “annual report”, IS details the results of its military campaign and provides key “success metrics” organized by attack type (e.g. assassination, armed attack, cities taken over) and operating area (e.g. Baghdad, Anbar, Kirkuk). These reports demonstrate IS’s effective use of distributed resources, sophisticated knowledge of military strategy, and coherent leadership structure.

ISIS Activity, Source [5]: Brookings

 

 

 

 

 

 

 

 

 

 

 

 

Recent attacks in Egypt and France exhibit a potential shift in IS military strategy. While some argue that these attacks reveal an increasing desperation of IS leadership, they also display a desire and capability to carry out sophisticated mass-casualty attacks globally [6].

Administrative Operations

The Islamic State is divided into 18 Wilayats (provinces), each with a Wali (governor) who oversees the local organization and civilian administration. After taking control of a newly acquired territory, IS assumes governance responsibilities, establishing sharia police forces and courts. It also oversees religious education, aid distribution, and services such as water, electricity, and sanitation.

ISIS militants parade in Tel Abyad, Syria, on the border with Turkey in 2014, Source [5]: Brookings
Proclaiming to offer an alternative to endemic corruption of past governments, IS frequently receives support from local civilians initially. However, IS’s intrusion in civilians’ daily lives, enforcement of rules about appearance and behavior, and savagery of punishment quickly results in popular acquiescence through fear [7]. This dynamic may ultimately prove to be IS’s undoing, as its ruthless tactics and totalitarianism have led to disaffection and exodus of civilian populations.

Financial Operations

The Islamic State controls significant financial resources. In 2014, external parties estimated that IS generated ~$50 million in monthly income and held between $1.5-2.0 billion in net assets [8].

Oil production from IS controlled facilities is its largest source of income. IS is estimated to produce between 30,000-80,000 barrels per day; even if sold at a price of $25 per barrel, this would generate daily income between $2-4 million [9]. Additional sources of income include: bank and civilian asset seizures, business extortion, highway checkpoint “tolls”, and prisoner ransom payments. Importantly, IS appears to have sufficiently diverse sources of revenue to survive the loss of any one in particular, including oil production.

IS’s financial operations have proven invaluable in supporting its strategic “business” goals. With this income, IS maintains civilian infrastructure, purchases weapons, and provides salaries to fighters. These wages serve as an important recruitment tool to attract supporters; with salaries of nearly $350 per month, fighters earn nearly five times as much as ordinary Syrian civilians [10].

Media Operations

Page 2 of the 2013 al-Naba report, which summarizes military achievements, Source [12]: Bloomberg

IS leverages extensive media efforts to garner support, promote its images, and raise money.

IS has been prolific in content production and dissemination as a result of its decentralized media structure. In the last two years, media efforts have been expanded beyond its original media outlet, al-Furqan Media, to include other outlets such as al-I’tisam Media, Ajnad Media, and al-Hayat Media, as well as provincial-level media offices [11].

The media operation of IS produces a range of propaganda material, including al-Naba, its annual report, and Dabiq, a digital magazine published in English and European languages. Both are expressions of IS’s sophisticated approach to articulating its caliphate vision.

IS has also demonstrated an advanced prowess in its use of social media, and in effect, actively crowd sources its propaganda. IS and its supporters have an active presence on outlets such as Twitter, YouTube, and Facebook. The decentralized distribution systems of these platforms have maximized its outreach and allowed its message to spread directly to its intended audience.

Tweets per day: ISIS, Islamic State and داعش, Source [13]: Topsy.

Sources

[1] Barrett, Richard. “The Islamic State.” The Soufan Group (2014): 23. Web. 5 December 2015. http://soufangroup.com/wp-content/uploads/2014/10/TSG-The-Islamic-State-Nov14.pdf.

[2] Barrett, Richard. “The Islamic State.” The Soufan Group (2014): 35. Web. 5 December 2015. http://soufangroup.com/wp-content/uploads/2014/10/TSG-The-Islamic-State-Nov14.pdf.

[3] Gartenstein-Ross, Daveed (2015, Feb, 9). How Many Fighters Does The Islamic State Really Have? War on the Rocks. Retrieved December 5, 2015, from http://warontherocks.com/2015/02/how-many-fighters-does-the-islamic-state-really-have/.

[4] Ezrow, Natasha (2015, Nov, 16). Explainer: Why Islamic State is proving so hard to defeat. The Conversation. Retrieved December 5, 2015, from https://theconversation.com/explainer-why-islamic-state-is-proving-so-hard-to-defeat-50790.

[5] McCants, William (2015, Sept, 1). The Believer. Retrieved December 5, 2015, from http://www.brookings.edu/research/essays/2015/thebeliever.

[6] Williams, Jennifer R. (2015, Dec, 2). We were wrong about ISIS. Brookings. Retrieved December 5, 2015, from http://www.brookings.edu/blogs/markaz/posts/2015/12/02-we-were-wrong-about-isis-williams.

[7] Barrett, Richard. “The Islamic State.” The Soufan Group (2014): 41. Web. 5 December 2015. http://soufangroup.com/wp-content/uploads/2014/10/TSG-The-Islamic-State-Nov14.pdf.

[8] Stupples, David (2015, Dec, 3). To defeat Islamic State we must sever its oil lifeline – here’s how. The Conversation. Retrieved December 5, 2015, from https://theconversation.com/to-defeat-islamic-state-we-must-sever-its-oil-lifeline-heres-how-51751.

[9] Barrett, Richard. “The Islamic State.” The Soufan Group (2014): 47. Web. 5 December 2015. http://soufangroup.com/wp-content/uploads/2014/10/TSG-The-Islamic-State-Nov14.pdf.

[10] Laub, Zachary and Jonathan Masters (2015, Nov, 16). CFR Backgrounders: The Islamic State. Council on Foreign Relations. Retrieved December 5, 2015 from http://www.cfr.org/iraq/islamic-state/p14811.

[11] Zelin, Aaron D. “Picture Or It Didn’t Happen: A Snapshot of the Islamic State’s Official Media Output.” Perspectives on Terrorism Volume 9, Number 4 (2015). Web. 5 Dec 2015.  http://www.terrorismanalysts.com/pt/index.php/pot/article/view/445/html.

[12] Hoffman, Allison (2014, Jun, 18). 1,083 Assassinations and Other Performance Metrics: ISIS’s Year in Review. Bloomberg. Retrieved December 5, 2015 from http://www.bloomberg.com/bw/articles/2014-06-18/1-083-assassinations-and-other-isis-performance-metrics-an-insurgencys-year-in-review.

[13] Tweets per Day: ISIS, Islamic State, and داعش(November 6th – December 6th). Digital image. Topsy. 6 Dec. 2015. Web. http://topsy.com/analytics?q1=ISIS&q2=Islamic%20State&q3=%D8%AF%D8%A7%D8%B9%D8%B4&via=Topsy.

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Student comments on The Islamic State

  1. This was a very timely and surprising choice for the TOM Challenge, and I appreciate you picking it. I am sure you would agree that a thorough understanding of ISIL’s operations is necessary for exploiting its weaknesses.

    While I found your assessment above to be thorough and well-researched, I have a different perspective regarding the true value of ISIS’s financial operations. Putting aside income from oil, arguably the easiest target for the Coalition, the other sources of income (bank and civilian asset seizures, business extortion, highway checkpoint “tolls”, and prisoner ransom payments) are not sustainable. If ISIS is contained geographically, these funding sources are finite and will rapidly diminish.

  2. An interesting take on ISIS, which is the most organized terrorist group in the world. By operating in a power vacuum (Syria + Iraq), ISIS is able to instill their form of government on the people and profit handsomely. However, I believe it is tough to grade their business model effectively when their “customers” have no option for dissent. In other words, customers are tortured or killed if they disagree or try to “shop elsewhere”. Using Ramadi as an example, what percentage of Ramadi residents do you think would leave if they could? Provided they can successfully navigate past the 15000 VBIED and IEDs. http://www.wsj.com/articles/roadside-bombs-snipers-delay-ramadi-offensive-1449427231

  3. Thoughtful choice for the TOM Challenge. I found both your analysis and the comments above extremely insightful. I can’t prevent myself from tracing a parallel with organized crime in Brazil and more broadly in Latin America (Medellin Cartel portrayed in Netflix’s original Narcos being a fine example). I am sure that local authorities would be more successful fighting organized crime if they had a deep understanding of how their business model is supported and reinforced by their operating model.

  4. Bold topic selection, and a well organized analysis. I would, however, question how tell the business and operating models are truly aligned, given the concerns surrounding the sustainability of civilian acquiescence. Additionally, one needs to examine the rate at which they are recruiting versus the rate at which their territorial coverage is expanding to see if they will have a sufficient supply of manpower to maintain control of their territories as they expand.

  5. Ian- Thank you for providing this detailed perspective on the operations of ISIS. Most of the Western media coverage is focused on the organization’s military rule, so I did not know much about the governance system and the financial underpinning of this operation. Obviously, the ability of this model to “scale” is a real concern and I wonder to what extent cutting off the main revenue stream of ISIS is a priority of international powers involved in this region.

  6. Very creative take on the assignment. As someone interested in understanding how ISIS came into existence and what drove its rapid growth in the region, I found your analysis captured many of the key tenants to the organization. If you haven’t done so already, I would check out the Atlantic’s “What ISIS really wants” — while somewhat controversial, I’ve found it to be the most in-depth and thoughtful article on the subject.

  7. Ian – Very interesting take on ISIS. It’s quite incredible how this organization has grown to be what it is today… starts to make more sense when you see the magnitude of their resources. I wonder how sustainable their model is in the long run.

  8. Ian,

    I find it interesting that you imply that predecessor organizations to the Islamic State relied primarily on terrorist attacks in the West. While the genesis of ISIS from the ashes of Al Qaeda in Mesopotamia is well-documented, there was quite a bit of differentiation between what was largely a Sunni-backed insurgency in western Iraq from the global Al Qaeda that perpetrated the 9/11 attacks. A more interesting comparison, at least to me, would be to compare the ISIS model to those of Hizbollah in Lebanon, the Mahdi Army in Iraq, and Hamas in Palestine. These groups, which largely relied on terrorist-type tactics to foment unrest against the powers governing their respective areas, were able to “go legit” by morphing into political entities that effectively govern territory and provide basic services to the local inhabitants. In all three cases, each of these groups, that largely started as insurgencies, have been able to use the democratic process to control seats in their respective parliaments. They have chosen to work within the existing system, and their goals are local rather than global. ISIS, on the other hand, has global ambitions and has chosen to challenge the very notion of the Westphalian nation-state.

    Perhaps an even more salient comparison would be with the Taliban in Afghanistan. Like the people in eastern Syria and western Iraq, the Afghan people in Kandahar and Helmand provinces initially turned to the Taliban to provide a sense of justice and order in the midst of governmental and extra-governmental malfeasance. However, they eventually angered the United States by providing sanctuary to Al Qaeda and wore out their welcome in other parts of the country due to the brutal nature of their rule and their unapologetic favoritism of the Pashtuns above all other ethnic groups.

    In any event, good analysis of the business and operating models of the Islamic State. I especially appreciated your discussion of their marketing efforts.

    Carlo

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