Share

Putin's IS funding shocker

SPEAKING at a press conference after the G20 summit in Antalya, Turkey which was dominated by the Paris terror attacks, US President Barack Obama revealed his thinking about how to combat the threat posed by Islamic terror movement Islamic State (IS).

Resisting calls by his Republican opponents to send in ground troops and finish IS off with the US military’s massive firepower, he repeated earlier statements that the goal remains to “degrade, and ultimately destroy” IS.

To repeat his predecessor’s Iraq strategy of 2003 would be a mistake, he said. “Not because our military could not march into Mosul or Raqqa or Ramadi and temporarily clear out ISIL, but because we would see a repetition of what we’ve seen before, which is if you do not have local populations that are committing to inclusive governance and who are pushing back against ideological extremes, that they resurface, unless we’re prepared to have a permanent occupation of these countries.”

He was supported by German Chancellor Angela Merkel, who said at her own press conference: “We agreed that the challenge can’t just be tackled with military means, but only with a multitude of measures.”

This includes air attacks. US and French bombers have, for instance, stepped up their attacks on the IS “capital”, Raqqa. But the G20 leaders concentrated on economic measures in order to – in Obama’s words – degrade and then destroy IS.

We will get back to the economic measures in a minute, but there was also a crucial meeting on the sidelines. It was fascinating to see Obama and his Russian counterpart, President Vladimir Putin, huddled at a table in the lobby of the hotel where they were staying, coordinating their strategy on Syria.

Putin also met separately with UK Prime Minister David Cameron and Italian Premier Matteo Renzi about the same subject.

The Syrian civil war indeed appears to be the crux of any solution. In this regard, Putin tabled a new plan, envisaging negotiations between the dictatorship of Syrian President Bashar al-Assad and opposition groups (apparently excluding IS), starting from January 1 next year. It remains to be seen how this will play out.

Beyond that, there was broad agreement about how to choke the IS “caliphate” in Syria and Iraq economically. Exactly how IS survives economically is a fascinating story.

Funding from 40 states - including some G20 members

Putin made everybody sit upright with a revelation that the terrorists receive funding from 40 states, including some G20 members. According to Russian news service RT, he told journalists: “I provided examples based on our data on the financing of different Islamic State units by private individuals. This money, as we have established, comes from 40 countries, and there are some of the G20 members among them.

“I’ve shown our colleagues photos taken from space and from aircraft which clearly demonstrate the scale of the illegal trade in oil and petroleum products. The motorcade of refuelling vehicles stretched for dozens of kilometres, so that from a height of 4 000 to 5 000 metres they stretch beyond the horizon.”

IS’ main revenue, of course, comes from the oil fields under their control, especially in the Mosul area in Iraq. This is why the recent recapture of Sinjar by the Kurds is so important, as this city lies on the road between Raqqa and Mosul, cutting the “caliphate” for all intents and purposes in two.

This is complemented by a clearly well-planned US air offensive against IS oil wells, refineries and pump stations, and also targeting fuel tanker trucks.

This may help "degrade" IS over time, but it is a long-term strategy. What to do immediately? IS coffers are, after all, flush with cash. They extort the money with exorbitant taxes from the eight million people under their rule. They also netted millions when they captured a group of banks in Mosul last year.

A Thomson Reuters study by Jean-Charles Brisard and Damien Martinez done a year ago came to the conclusion that the group had an income of around $2.9bn per year. Of this, about 38% comes from oil and 17% from natural gas, while 12% is generated by extortion.

This enables IS to pay its fighters about $400 a month, considerably more than soldiers in the Syrian or Iraqi Army earn. Which partly explains the group’s continuing attraction to people from the region.

As long as the IS “caliphate” has the pretense of being a state, passing laws (however absurd and unjust), gathering (or extorting) taxes and trading in the region, it will be extremely difficult to bring it to its knees. Cutting off its finances (“degrading” in Obama-speech) will make it much more difficult for it to survive.

So much for the “degrade” part. How about “destroy”?

Neither Obama nor any other Western leader has any appetite for putting US or European boots on the ground in Syria beyond a few surgical strikes with special forces. Rather, it appears that the Kurds and the Iraqi Army will serve as surrogate forces to defeat IS on the battlefield. Which, in turn, means that a considerable effort will be made to equip and train these forces.

Obama and Putin’s hasty tête-à-tête in the Antalya hotel lobby has the potential of an understanding about Syria and a political solution there. If so, and if the financial degrading of the “caliphate” succeeds, an end to the nightmare may be in the offing.

* Leopold Scholtz is an independent political analyst who lives in Europe. Views expressed are his own.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.94
-0.2%
Rand - Pound
23.91
-0.1%
Rand - Euro
20.43
+0.2%
Rand - Aus dollar
12.34
+0.1%
Rand - Yen
0.13
-0.2%
Platinum
910.50
+1.5%
Palladium
1,011.50
+1.0%
Gold
2,221.35
+1.2%
Silver
24.87
+0.9%
Brent Crude
86.09
-0.2%
Top 40
68,346
+1.0%
All Share
74,536
+0.8%
Resource 10
57,251
+2.8%
Industrial 25
103,936
+0.6%
Financial 15
16,502
-0.1%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders