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Return and Expand : The Finances and Prospects of the Islamic State After the Caliphate

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Technical Report

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RAND Corporation Santa Monica United States

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As of March 2019, the Islamic State had been ejected from its territorial holdings in Iraq and Syria after having conquered an area the size of Great Britain. But the end of its territorial caliphate does not necessarily mean the end of the group. Understanding the future of the Islamic State requires an assessment of its finances. This report provides details on the many ways the group has raised money and spent money and offers an assessment of what the groups financial activities mean for its likelihood to reemerge. Throughout its history, the Islamic State and its predecessor groups have focused on raising money locally. With this money, it has conducted a wide range of terrorist and military operations and even run a state, at least for a short time. The Islamic State will almost certainly attempt a comeback. To fund this effort, the group will go with what has consistently worked for it in the past diversifying revenue sources to maintain steady access to financing and raising money locally. The Islamic States knack for fundraising through criminal activities will prove useful, as will the likelihood that it has information on the many millions of people who once lived under its rule. In addition, it appears to have sizable assets in reserve. As an insurgency, rather than a territorial government, its expenses are also far lower than they were at the peak of its power. Controlling territory would facilitate these activities but is not a prerequisite. Accordingly, the United States will need to stay involved with counterIslamic State activities across several lines of effort, including countering the groups revenue-raising activities and potentially including military action.

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  • Military Operations, Strategy and Tactics

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