With Caliphate Gone, What's Next for Islamic State?: QuickTake

(Bloomberg) -- Islamic State, the richest and most destructive Islamist militant organization the world has seen, has been subdued in Iraq and Syria by an array of forces ranging from the U.S. military to Iranian-backed militias. Its fighters have been pushed into ever smaller redoubts, and its leaders are in hiding. But the metastatic nature of violent jihad means the story isn’t likely to end there. Islamic State’s forerunner, al-Qaeda, faced the possibility of destruction in late 2001 when it was driven from its sanctuaries in Afghanistan by invading U.S. forces. It survived and helped inspire a new generation of extremists -- including those who formed Islamic State.

1. Is Islamic State finished in Syria and Iraq?

Not quite. With its self-declared caliphate -- a state that claims dominion over all Muslims -- in ruins, the group said in a video near the end of 2017 that “jihad had entered a new stage.” That probably signaled the group’s intention to return to the insurgency tactics it used in its early incarnations following the U.S.-led invasion of Iraq in 2003: bombings, assassinations and sniper attacks. Its enigmatic leader, Abu Bakr al-Baghdadi, is thought to be alive.

2. How many of its fighters are left there?

U.S. intelligence agencies estimate that more than 40,000 foreigners from at least 120 countries flocked to Iraq and Syria to join Islamic State. Many are dead. The Soufan Center, a security intelligence consultancy, estimates that at least 5,600 had returned to their home countries by the end of 2017. Experts think only about 3,000 remain in the remnants of the group’s proto-state. Most of those have fled to the desert, in line with the organization’s shift toward hit-and-run attacks. Replenishing the ranks will be difficult, as many countries have taken steps since 2015 to make it harder for would-be jihadists to cross international frontiers.

3. What’s happened to Islamic State’s finances?

Islamic State’s average monthly revenue was about $80 million in 2015, according to IHS Markit, a London-based information and analytics group. But in losing almost all the territory it controlled, the group has also lost its oil assets, notably the fields of Deir Ezzor in Syria, and its ability to generate revenue through taxation. It can still earn cash from kidnapping and smuggling, but a financial recovery would require the group to reconnect cells and supply lines across its former territory.

4. What’s happened to its capacity for terrorist attacks?

As it came under increasing pressure in Syria and Iraq, Islamic State launched more and more strikes around the world, presumably to demonstrate its continued relevance. Its losses in Syria and Iraq have degraded its ability to orchestrate attacks from there, but not from its many affiliates in other countries. It can also continue to animate attacks by so-called lone-wolf terrorists, who are inspired by but have no formal ties to terrorist groups. Islamic State’s propaganda machine has reduced its output but is still functioning.

5. How worrisome are its affiliates and allies?

Groups around the world that are associated with Islamic State include some that were established directly as franchises, some that existed previously and have rebranded themselves as affiliates, others that operate separately but have sworn allegiance to Islamic State and still others that just share its goals.

6. What shape is al-Qaeda in?

At times in recent years, analysts have proposed that al-Qaeda was again facing irrelevance. The killing by U.S. special forces of founder Osama Bin Laden in his Pakistani safehouse in 2011 was a low point. Then, when Islamic State began occupying territory in 2014 and declared a caliphate, some of al-Qaeda’s allied groups defected to its side. Today, few analysts sign up for the view that al-Qaeda is fading. The consensus is that while world powers have focused on battling Islamic State, al-Qaeda has quietly rebuilt. The demise of Islamic State’s caliphate has boosted al-Qaeda’s credibility among some jihadists, as it takes the position that declaring such a state was premature. Al-Qaeda today prefers to work through local groups and often tries to hide its connection to them. The Syria affiliate is particularly strong. In its recruiting, it positioned itself between the harsh regime of President Bashar al-Assad and Islamic State’s barbarous proto-state, and it now has an estimated 10,000 fighters.

The Reference Shelf

• An article in Foreign Affairs argues that the jihadist threat won’t end with the military defeat of Islamic State.
• The Security Times explores how Islamic State’s tactics may evolve.
• The Council on Foreign Relations examines al-Qaeda’s rebuilding.
• QuickTakes on Syria’s civil war, the fight against Islamic State, and the jihadist threat in West Africa.

To contact the reporter on this story: Caroline Alexander in London at calexander1@bloomberg.net.

To contact the editors responsible for this story: Alaa Shahine at asalha@bloomberg.net, Mark Williams, Lisa Beyer

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