With the recent abortive demand by Islamic State Jihadists for $200 million in return for releasing two Japanese hostages, some observers have speculated that the funding for the organization may be drying up.

But as the article below from The Telegraph maintains, that is unlikely. It’s much more likely that the Islamic State never expected to secure such a sum and asked for $200 million for symbolic reasons.

The article also analyzes the financing of the Islamic State:

Kidnapping for ransom is just one, and certainly not the most significant, tool used by Isil to finance its activities. 

Contrary to other extremist organisations, like al-Qaeda, that rely heavily on external donors and financiers, Isil has consistently tried to maintain financial independence. 

Isil’s main source of income is unquestionably the underground sale of Iraq and Syria’s oil and gas. According to some credible reports, the smuggling of oil and gas has resulted in a daily income of about $2 million, making Isil the wealthiest extremist organisation in the world. 

Since the proclamation of the caliphate, Isil has also coupled forms of shadow taxation and extortion with more official taxation systems, including a custom tax on trucks driving on the region’s main highways. 

Additionally, in the territories under Isil control, non-Muslims are required to pay a “protection” tax, called jizya. 

Along with oil and gas sales and more or less formal systems of taxation, Isil relies on money coming from agriculture, electricity, cotton production, water, and the sale of stolen antiques on the black market.


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