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Daesh is financially weak.

222downloadThe Islamic State is facing imminent financial collapse, according to a new study conducted by a London-based research group in association with one of the world’s leading international accounting firms. The recently launched report is entitled Caliphate in Decline: An Estimate of Islamic State’s Financial Fortunes. The analysis that forms the basis of the report was conducted by scholars at the International Center for the Study of Radicalization, a research center that operates out of the Department of War Studies at King’s College in London. The report’s authors were joined by financial analysts at Ernst & Young, a British-based company that is often referred to as one of the world’s ‘big four’ accounting firms.

The report challenges the widely accepted claim that the Islamic State is the wealthiest terrorist organization in history. Its authors argue that the organization’s wealth is connected to its function as “a quasi-state”, with a geographical territory under its control and a subject population that lives in it. Territorial control, say the report’s authors, allows the Islamic State to amass significant revenue from sources like direct and indirect taxation, extraction of natural resources, and confiscation of property from citizens, among others. Even though much of the Islamic State’s financial activity is hidden, the study uses open sources to make the claim that the group’s income in 2014 was close to $2 billion. Last year, however, the overall income amassed from all sources dropped to less than $900 million, an estimated reduction of 45 percent, say the researchers.  Read articles here