Dr. Ahmad Yousef
Introduction
Mankind has entered the 21st century, announcing the consolidation of rules of the scientific-technological revolution through the evolution of the digital revolution to the depth which is expected to achieve a qualitative leap in the life of mankind, by opening the doors to the transfer of human capital and the optimal investment of the outputs of that revolution. In fact, the unique results of this revolution have led to some development in the educational and health systems, and various aspects of humanity, nevertheless, with the entry of the new millennium, the world witnessed a serious scourge accompanied by that revolution, which invested the scientific revolution and began to gangrene in the body of the global coexistence, due to the growing impact of September 11th, 2001 events, which warned humanity of the serious aspects that can be invested in the scientific-technological revolution, in the case of achieving mating between its outputs and the applied outputs of the intellectual systems called backwardness, and the adherence to the legacy of ancestors for centuries, without authenticating the fact of what the conditions have reached under the influence of inheriting that legacy throughout generations.
There is no doubt that the issue of terrorism and dealing with it is no spur-of-the-moment or the current century, it extends to the 1960s of the 20th century, this issue was limited to some topics that posed a threat to the world peace, such as the hijacking of aircraft and individuals, but terrorism has taken a different approach to enter the new millennium through the actions of terrorist organizations as seizing geographical areas to use as a springboard for its terrorist acts, and applying its own laws that are totally incompatible with the international law and human rights. If the examples are numerous, beginning with al-Qaeda movement which took advantage of the Afghan territories to carry out its terrorist operations, the Nigerian Boko Haram, any terrorist organization which has achieved what ISIS or the so-called Islamic State in Iraq and al-Sham, the Levant (ISIL – ISIS) has achieved. They managed to control extensive geographical areas and built its Islamic empire there, taking advantage of the huge human potential coming to it from different parts of the world, and the material possibilities from various sources. How has this organization achieved its geographical control? What are its various funding sources and their details? What are the effects of its spread? Are there international bodies supporting this organization? These are questions we will seek to answer in this study.
First – Terrorist Movement in the World and its Economic Impacts
Terrorism is considered as one of the greatest challenges facing the world’s countries in the 21st century. It is not only a global security threat, rather, its impact extends to various aspects of life, especially the economic aspect (2). Global statistical data show the development of this dangerous phenomenon since 2000. In its annual Global Terrorism Index, the U.S. Institute for Economics and Peace has divided the countries of the world according to their levels of vulnerability to terrorism, topped by Iraq, Afghanistan, Nigeria, Syria, Pakistan and Somalia, respectively, where they are exposed to very high rates of terrorism which lead to high human and material losses, and negatively affect its stability.
In 2017, the number of victims of the world’s top twenty terrorist attacks exceeded 2,926. Somalia, Iraq, Egypt, Syria and Libya ranked first in terms of the number of human victims of terrorist operations in their territories. This can be illustrated by the following table:
Table (1)
Victims of some terrorist operations in 2017 – 2018
|
|
Country
|
City
|
Year
|
Terrorist Group
|
Victims
|
|
1
|
Somalia
|
Mogadishu
|
2017
|
Al-Shabaab Movement
|
588
|
|
2
|
Egypt
|
Bir al-Abed
|
2018
|
The Sinai Province
of the Islamic State (ISIS-SP)
|
311
|
|
3
|
Iraq
|
Mosul (2 operations)
|
2017
|
Da’esh (ISIL)
|
393
|
-Mario Arturo Ruiz Estrada, Donghyun Park, The Economic Cost of the Islamic State on the Syrian and Iraqi Economies, Quality and Quantity (International Journal of Methodology), Springer, from the site: https://ideas.repec.org/a/spr/qualqt/v52y2018i4d10.1007_s11135-017-0549-9.html
-Global Terrorism Index 2018, Measuring the Impact of Terrorism, Institute for Economics & Peace, p: 8
|
4
|
Syria
|
Talafar
|
2017
|
Da’esh
|
200
|
|
Qariten
|
2017
|
Da’esh
|
128
|
|
Aleppo
|
2017
|
Jaysh al-Islam
|
127
|
|
5
|
Libya
|
Barqa
|
2017
|
Thowar Misrata
|
141
|
Reasurces: Global Terrorism Index 2018, Measuring the Impact of Terrorism, Institute for Economics & Peace, p: 10
Figure (1)
Source: Researcher
ISIS ranked first in the number and scale of terrorist operations during the period from 2015 to 2017 globally. They began to expand their terrorist operations after losing territorial control in both Iraq and Syria after the famous Battle of al-Baghouz.
As for the material impact of terrorist operations, the world has witnessed a clear development which reached its peak in 2014, and then began to decline. The total material cost of global terrorism during the period from 2000 to 2017 amounted to $801 billion USD, rising from $9 in 2000 to $43 billion in 2007, and then decreased to $28 In 2011, it rose again to reach $48 billion in 2012 and reached its peak in 2014 at $108 billion. It then declined to $52 billion in 2017.
It’s not worthy that the cost resulting from the September 11th, 2001 events alone, amounted to (65) billion US dollars, while the total costs resulting from terrorist operations in the same year mounted to 11 billion dollars.
The geographical distribution of the economic impact of terrorism is evident in its concentration in the Middle East and Northern Africa (MENA) and its neighboring regions, as well as in South Asia, while Central America and the Caribbean are at the bottom of the list, where the region is least affected by terrorist operations (7). The financial cost of terrorist operations as a percentage of GDP has in some cases been high. The underdeveloped countries bear the heaviest financial burden compared with the developed countries, because of their weak economic potential.
The following table shows the 10 most affected countries by terrorism, economically.
Table (2)
The cost of terrorist operations as a percentage of GDP in the 10 most affected countries by terrorism
|
Country
|
Afghanistan
|
Iraq
|
Syria
|
Somalia
|
Southern Sudan
|
|
Percentage of GDP
|
12.8%
|
10.8%
|
5.8%
|
5%
|
3.9%
|
|
Country
|
Southern Central
Africa
|
Nigeria
|
Libya
|
Egypt
|
Yemen
|
|
Percentage of GDP
|
3.6%
|
2.6%
|
1.8%
|
0.8%
|
0.7
|
Source: Start GTD, IEP Calculation
-Global Terrorism Index 2018, Measuring the Impact of Terrorism, Institute for Economics & Peace, p: 29
-Ibid, p: 29
-Ibid, p: 34
Figure (2)
![]()
Source: Prepared by the researcher based on table (2)
A comparison between the economic impact of terrorism and other forms of violence, confirms that the economic impact of terrorism represents a small percentage of the total economic impact of acts of violence globally, accounting for 0,4% of the total cost estimated at $14,76 trillion in 2017, which is equivalent to 12,4% of global GDP (8). These costs do not take into account the costs of countering terrorism or countering violent extremism, nor the effect of diverting public resources into security expenditures away from other government activities, nor does it account for any of the long-term economic effects of terrorism, such as reduced tourism, declining business activities, production and investment (9).
Second – The Economic Effect of the rise of ISIS
The Islamic State (ISIS), is a term that expresses a Sunni Muslim terrorist group that has practiced various acts of violence in Iraq and Syria, which witnessed a major development in the economic and military fields between the years of 2012 and 2014. The Islamic State began to retreat and recede the geographical areas under its control after falling at the battle of Kobani, then it moved to rely primarily on the practice of global terrorist operations after the demise of power in the historic battle of al-Baghouz in March 2019. ISIS is considered the largest terrorist group globally in the contemporary history.
The rise of this terrorist organization has led to the apparent destabilization of the Middle East in general and Syria and Iraq in particular, where it has geographically controlled over an area equal to that of the United Kingdom, with a population of over 10 million.
At the height of its activities, ISIS took control of part of Aleppo and Hasakah governorates, as well as the entire governorates of Deir ez Zor and Raqqa in Syria, in addition to the Iraqi governorates of Salah al-Din, Anbar, Nineveh and Diyala.
It managed to control all-natural resources in those areas and began to exercise its powers over a range of industrial and commercial activities, and commodities of oil, agricultural products and minerals.
Some estimates indicate that the Islamic State has become in control of assets reached more than $2 trillion, and the annual income of about $2,9 billion. This is at the expense of the Iraqi and Syrian economies, whose per capita income declined by 23% and 28% less than expected in the absence of terrorism.
The direct costs of terrorism were very significant in both countries. The CIA estimates the economic cost of terrorism in Iraq at $159 billion in purchasing power for 2005, which is equivalent to 32% of the country’s GDP in 2014. In addition, ISIS’s control over many sources of revenue has contributed to the reduce of government revenues on one hand, and investing its available revenues in military spending rather than providing public services to the citizens.
ISIS’s control over these economic resources reflected on depriving Iraq of nearly 10% of its oil resources, and depriving Syria of one third of the oil and electricity resources of Tishreen and Euphrates dams, besides seizing most strategic agricultural crops, such as wheat and cotton.
In addition to depriving the Syrian and Iraqi economies of many natural and human resources. It was found that there are 90 branches of Iraqi banks in the areas controlled by ISIS, the terrorist group also took over the governmental banks operating in the cities that it had controlled in both countries.
In June 2014, lSIS stole $425 million in cash from Mosul branch of the Central Bank of Iraq, as well as seizing funds held in the banks’ coffers in Mosul in the form of current accounts and deposits, according to some data exceeded $1 billion in the cumulative total on 31 December 2013.
In Syria, ISIS has spent the money of public and private banks in Deir ez-Zor and Raqqa, some information indicate that it has imposed $20 per month on a bank’s customers in exchange for the protection of their deposits. The United States Treasury estimated that during 2014, ISIS had managed to reach at least half a billion dollars in control of state-owned banks in north and western Iraq. In addition, it has taken control of the Shiite, Christian and Yazidi accounts, and Sunnis were likely to be forced to pay 10% of their cash withdrawals from these banks.
In Syria, the total cost of the war is equivalent to 229% of the country’s GDP in 2010, which is about $60 billion.
In general, ISIS’s influence on local economies can be demonstrated by the following tracks:
1- Control of profitable business activities within its territories.
2- Control of natural and human resources.
3- Effective regulation of the local economy and the development of the tax system.
4- Direct interventions in the investment of the public resources and services.
5- Influencing on indirect economic impacts.
In addition, it has destroyed the infrastructures of its held-areas, particularly areas where excessive violence has been used to control them, such as the city of Kobani.
Dr. Ahmed Yousef holds a Ph.D. in Economics from the University of Aleppo, a lecturer in the faculty of Al-Mamoun Private University, and the president of Afrin University.
