Introduction:
The Islamic State (IS)—also known as the Islamic State of Iraq and Syria (ISIS)—seized large swaths of territory within the two sovereign countries of Iraq and Syria from 2011–2016. At the zenith of its expansion, the IS generated over $2 billion in revenue in a single year (2015), proclaimed governance over eight million people, and annexed over 86,000 miles of land from Iraq and Syria (Hansen-Lewis & Shapiro, 2015). This feat, coupled with the IS’s entrepreneurial skills and ingenuity, enabled it to attain the status as the world’s most recognized terrorist brand and organization, far surpassing its competitors of other violent extremist organizations.
At its pinnacle, the IS created a brand and image that it exported globally. By August 2015, the IS had cultivated over 40 international and local jihadist groups for allegiance and support (Barrett, 2014; Lynch, 2015). The IS brand has, in essence, gone global with many affiliates pledging allegiance, having inspired lone wolf attacks in Western countries, and with a name that has become correlated with terrorism. Yet, whether this brand of the IS will endure or fade away as its competitors continue to root out its followers, policymakers worldwide need to maintain a strategy to hedge against this threat.
Throughout its 18-year history, the IS has proven to be an adaptive, resilient, and entrepreneurial learning organization. Even though the group has been driven out from its physical strongholds in Iraq and Syria, policymakers need to take the time to dissect and deconstruct this organization. Devoting countless resources to “decapitating” the group’s leadership may not be the solution. Instead, policymakers might consider developing a robust Information Operations (IO) multidisciplinary strategy to study and defeat the IS within such disciplines as finance, psychology, military, logistics/economics, and religion to hedge the brand the IS has established, promoted, and become. If history is an accurate indicator from which to learn, one could argue policymakers were quick to forget the IS in years past when they were beaten back in 2009 and 2010 as Islamic State of Iraq (ISI). In essence, policymakers need to reconstruct how effective the IS was and avoid the temptation to walk away just because the “physical caliphate” all but disappears.
The IS could not have succeeded by chance or regional instability. Instead, the IS’s leadership and middle management displayed sharp business acumen, entrepreneurial intellect, and resourcefulness for such achievements. The IS’s internal business practices were integral in generating large sums of money, recruiting necessary human capital, and efficiently managing acquired resources to become globally recognized as an enduring proto-state. This research, therefore, investigates the means, systems, and strategies that the IS used internally to support itself by analyzing the core resources of money, manpower, and materiel.
Money
As in any firm, corporation, or business, the IS relies heavily on capital to obtain the necessary resources to meet its objectives (Kress, 2016; Mesquita & Smith, 2011). The IS’s organizational design wages violent tactics against its enemies and provides integrated structure and functioning bureaus to manage revenues for state building, propaganda, employee training, and operating expenses. The seizure of large swaths of territory allowed the group to generate funding internally, providing a competitive advantage over other insurgent and terrorist groups reliant on external support.
The IS’s financial strategy is based upon territorial control, providing it autonomy and a diversified resource base to fuel its operations (Bindner & Poirot, 2016). In seizing the land, the IS exerted its authority over the occupied regions’ natural resources, raw materials, commercial activities, and manufacturing bases, thereby providing itself with a primary source of funding (Binder & Poirot, 2016).
The IS’s elaborate organizational structure gives it the bureaucratic and administrative expertise to manage its financial strategy effectively. Having business acumen and oversight at various levels yields the ability to produce positive gains from its numerous revenue streams internal to its caliphate. This research displayed the IS capitalizing and managing several revenue streams to fuel its operations, unlike previous terrorist and insurgent groups. Ultimately, the IS exploited numerous resources that yielded billions of dollars in revenue, including oil and natural gas, taxation and extortion, commercial enterprises, plundered cash, ransoms, antiquities, human trafficking, and external donations. Even though the IS generated billions of dollars at its pinnacle, the group strived to maintain detailed oversight of its expenditures and outlays. The IS incentivized its fighters and followers with monthly salaries and spent millions of dollars in marketing, propaganda, public services, and war equipment, all of which underpinned its rise to the world’s most recognized terrorist brand. While the IS’s financial strategy and economic activities allowed them to yield financial gains, capital cannot be acquired, and money cannot be spent without manpower.
Manpower
Whether it is a corporation or the IS, no one rules aloneorganizations need a winning coalition of middle managers, foot soldiers, and loyal supporters (Mesquita & Smith, 2011). Dating back to its infant years as Al-Qaeda in Iraq (AQI) and ISI, the IS demonstrated the entrepreneurial and management expertise required to support its envisioned sophisticated financial, military, and state-like institution by always having an organizational and hierarchal protocol (Shatz & Johnson, 2015).
The growth and formation of the IS and what it achieved at its pinnacle was not a rigid step-by-step process; instead, it was fluid and ever-evolving to support the dynamics of governance, resource management, and military operations (Ryan, 2009; Shatz & Johnson, 2015). During the IS’s peak of controlling territory from 2013 to 2015, it operated and functioned as a government with a bureaucratic hierarchy. At the top, two deputies supported the Caliph (Abu Bakr al-Baghdadi)—one for Iraq and one for Syria—forming “The Emirate,” which planned key strategic policies for the IS. Twelve governors of the IS’s caliphate in Iraq and Syria supported the policies of “The Emirate” (“The Islamic State,” 2014). This command relationship was underpinned by nine councils, or ministries, which created and implemented the day-to-day policies of the IS specific to finance, media, leadership, military, and judicial arenas (“The Islamic State,” 2014). As IS grew in size, so did its need to manage internal coordination across vast areas of territory. With the core competency of a hierarchy, the IS could allocate personnel to locations and positions needed to support operations, thus giving the IS an advantage over other insurgent groups in the region (Johnston et al., 2016).
At its peak, the IS cultivated a robust labor force to support military operations, safeguard lines of communication, extract resources, and provide governmental services to its constituents (Cronin, 2015). The IS’s appeal of a self-styled global caliphate was integral in its recruiting efforts, legitimacy, and image, all of which underpinned its brand of being the most recognized terrorist organization. The IS’s determination and aspiration to hold territory and provide state-like institutions made it both entrepreneurial and reliant on manipulating the human capital it needed on the battlefields and in the myriad of backroom roles for managing its quasi-state institutions. The IS was able to attract thousands of foreign fighters, coerce local populations, incentivize intermediaries and black marketers, and even entice women, all of which strengthened the legitimacy of its brand.
The organization’s ability to endure exceeds its fighters’ ability to pull the trigger. The resiliency of the IS can be traced to the vital skills of those found behind the scenes, which manage its finances, market its image/brand, and allocate expertise where needed. From 2010 to 2016, the IS could cultivate many foreign fighters, persuaded the local populations, and marketed its brand to its international affiliates, bolstering its rise in distinction. During this timeframe, the IS’s expansionist territorial goals required extensive manpower, and to aggressively defend its borders, war materiel was vital for protection. The IS’s organizational structure was critical to identifying, managing, and procuring materiel needed to support its tactical and strategic objectives.
Materiel
The IS needed equipment, tools, and parts to support its requirements. Whether this materiel (equipment, tools, and parts) was captured, purchased, or manufactured in an ad hoc location, the IS employed a vast array of war materiel to support its strategic objectives of expanding and defending its caliphate. The IS seized and utilized weapons and ammunition manufactured in over 15 countries, including China, Russia, and the United States. The preponderance of weapons used by the IS, originating from the aforementioned countries, was captured by the Iraqi military, the Assad (Syrian) military regime, and other rebel factions in the region (Ahmed, 2014; Nance, 2016). The volume of weapons, military equipment, and ammunition the IS plundered was estimated to be hundreds of millions of dollars and could support its combat operations for many years. The seized U.S. and Russian military hardware provided lethality to the IS on the battlefield and bolstered its image and brand by depicting its ability to defeat a militarily superior force. At its pinnacle, the IS amassed a profuse arsenal of military hardware that could last years and potentially fund a resurgence. To sustain its spoils of war, the quasi-state established a self-styled industrial base to legitimize its franchise.
Even though the IS captured massive troves of weapons, it required a robust supply of artillery and ammunition to continue defending and expanding the peripheries of its caliphate. Given the kinetic environment the IS operated within, captured ordnance and ammunition would only last the group so long. To maintain adequate resources, the IS’s entrepreneurialism and ingenuity enabled the group to manufacture and deploy ammunition, ordnance, and IEDs on a quasi-industrial scale (Conflict Armament Research [CAR], 2016). Evidence shows the IS employed a centralized weapons production capability within its caliphate. It used highly bureaucratic and strict reporting lines of standardization and quality control to manufacture mortars, mortar tubes, and rockets (CAR, 2016). The scale of production from the IS equates to the sophistication and capacities of a conventional military force, and the IS thereby distinguished itself and its brand from other regional insurgent groups.
In addition to this centralized control of its weapons production, the IS’s ability to standardize its weapons manufacturing demonstrates its intellectual expertise, business acumen, and logistical competency. Thus, the IS’s entrepreneurial leadership recognized the need to preserve and maintain its military hardware, which led the group to establish numerous vehicle maintenance facilities within its peripheries. These facilities overhauled and upgraded its inventories of all types of vehicles, from installing multi-spectral camouflage on tanks, reinforcing armor of fighting vehicles and even fabricating and fusing two separate and distinct military weapons into a single principal end item. Evidence suggests the IS maintained serialized management and accountability with its military hardware (Mitzer & Oliemans, 2017c). Inventory of the IS’s organic property provided it with benefits such as asset visibility, organization of warehouses, the accuracy of resupply, and internal staff efficiency, demonstrating innovative skills for managing its resources and institutions.
Given its history, resiliency, and adaptability, the IS may lose its physical caliphate, but its ideological vision will likely continue. The group needs to be recognized for its barbaric and violent acts to which it subjects its enemies and its ingenuity, resolve, and tenacity. This insurgency defied the odds and rose from a local criminal syndicate network, starting in 2010, to becoming the world’s most recognized terrorist brand in 2016. For a non-state actor such as the IS to have accumulated the amount of wealth it did, seized and governed the amount of territory it controlled, and defended itself against such overwhelming odds, it should be recognized for the feat it is.
References
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