The Islamic State is in a strong financial position despite the impact of airstrikes and falling oil prices hitting its bottom line, analysts say.
According to public policy experts at the RAND Corp., the group has more than enough revenue and assets to cover its current expenses, The New York Times reported.
The militant group raises more than $1 million per day in extortion and taxation. The rate of taxation on Iraqi government employees is as high as 50 percent, adding up to at least $300 million last year, while companies can have their contracts and revenue taxed up to 20 percent.
As other sources of revenue have decreased, such as from banks and oil, the Islamic State has adjusted tax rates to draw in more income, the Times reported.
Specifically, according to figures provided by the analysts, the Islamic State's assets stood at $875 million in June 2014. Extortion and taxation in Iraq accounted for the highest source of revenue at $600 million. Another $500 million was stolen from state-owned banks in Iraq, while oil came in third at $100 million. Kidnapping ransoms accounted for $20 million.
Oil revenue has consistently fallen since the United States started targeting the group's oil infrastructure through airstrikes. Revenue from oil is down to about $2 million per week, and much of the production is being used to meet its own needs.
The group's largest expenditure is in salaries, estimated to be between $3 million and $10 million every month. The Islamic State also invests in committees, media courts, and market regulation as opposed to providing services, and it avoids investment in infrastructure given that is an easy target for attacks.
Overall, the analysts said that the Islamic State keeps its costs low by looting military equipment, appropriating land and infrastructure, and paying relatively low salaries. It also manages its level of vulnerability by shifting its operations between territorial expansion and fueling terrorist activity.
"The Islamic State's loss of ground in Tikrit last month, for example, has not stopped it from launching attacks in other parts of Iraq and Syria and taking the Iraqi city of Ramadi
this weekend," the Times said.
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