IS 'business model' failing

IS' “business model” is failing as jihadists lose their grip on territory and the vital oil and tax revenue it brings, a new report has found.

The so-called Islamic State is believed to be the richest terrorist group in the world, exploiting natural resources and looting antiquities seized in its lightning advance across Syria and Iraqi in 2014.

Civilians trapped under the militant group's brutal rule are subjected to punitive taxation, confiscations and fines, while millions of pounds are made in ransoms from kidnappings.

But research by the International Centre for the Study of Radicalisation and Political Violence (ICSR) at King's College London has found that as IS is driven out of swathes of its former territory and international air strikes target its oilfields, the revenue streams are starting to dry up.

The group's true wealth is difficult to determine, but its annual revenue has plummeted from an estimated $1.9b (£1.5b) in 2014 to $870m (£700m) last year.

Peter Neumann, director of ICSR said that while the exploitation of vast territories has been lucrative for IS, the bureaucracy entailed brings expenses.

“It needs to fix roads,” he told the Associated Press. “It needs to pay teachers. It needs to run health services. It needs to pay for these things that al-Qaeda never had to."

The report found no evidence that rumoured donations from foreign supporters and governments “continue to be significant”, while taxation has become IS' main revenue source after its ability to make money from looted antiquities in new territory faded.

Oil remains the group's second-largest money-maker but IS' trade has declined rapidly since the start of a targeted air campaign by the US-led coalition.

Operation Tidal Wave II, launched in October 2015, aims to destroy oil transport and infrastructure to cut funding, seeing oil wells and tankers repeatedly bombed despite concern for civilian workers.

The group has been forced to reduce salaries and perks for fighters, as well as increasing taxation and fees to make up the cash shortage, leaked documents from its Bayt Mal al-Muslimeen” treasury show.

IS LEADERS LEAVING RAQA

Leaders of the IS group are leaving their Syrian stronghold of Raqa, fleeing in the face of the Arab-Kurd offensive backed by the international coalition, the US Defense Department said Friday.

"We are starting to see now that a lot of senior ISIS leaders, a lot of their bureaucrats... are beginning the process of leaving Raqa," said Pentagon spokesman Jeff Davis.

"They have definitely taken note of the fact that the end is near in Raqa," he told reporters, describing a retreat that seems "very organized, orderly."