On June 29, 2014, the Islamic State of Iraq and Syria (“ISIS”) declared the revival of the Caliphate, and renamed itself the Islamic State (“IS”). Led by Abu Bakr al Baghdadi, the Islamic State’s stated objective, or “business model”, is the re-establishment of a Sunni caliphate, an Islamic state governed by Sharia law. Despite its numerous perversions of the Islamic faith, IS asserts religious authority to justify its legitimacy and argues that its actions are in the interest of reviving Islam, uniting the Muslim world under truly Islamic rule, and fulfilling the orders of God.
In order to support this objective, IS executes on a well designed and organized operating model, which includes four primary components: military, administrative, financial, media . These areas of operations are highly integrated and function in a coordinated fashion in the advancement of the declared Caliphate.
In light of its territorial gains, sustained operations within Iraq and Syria, and ongoing recruitment of international supporters, it is clear that the Islamic State has been very effective at aligning its operating and business models.
The military activity of IS is the most widely covered aspect of its operating model. Historically, IS’s military strategy focused on conquering physical territory in Iraq and Syria, diverging from predecessor groups who centered their efforts on civilian based attacks in Western countries.
IS leverages an enthusiastic and determined network of fighters who have a reputation for violence . While the CIA estimated the number of IS fighters to be between 20,000 and 31,500 in late 2014, assessments are extraordinarily wide-ranging, with some reaching as high as 200,000 .
IS has enjoyed significant military success and currently commands a region roughly the size of Belgium . In al-Naba, its “annual report”, IS details the results of its military campaign and provides key “success metrics” organized by attack type (e.g. assassination, armed attack, cities taken over) and operating area (e.g. Baghdad, Anbar, Kirkuk). These reports demonstrate IS’s effective use of distributed resources, sophisticated knowledge of military strategy, and coherent leadership structure.
Recent attacks in Egypt and France exhibit a potential shift in IS military strategy. While some argue that these attacks reveal an increasing desperation of IS leadership, they also display a desire and capability to carry out sophisticated mass-casualty attacks globally .
The Islamic State is divided into 18 Wilayats (provinces), each with a Wali (governor) who oversees the local organization and civilian administration. After taking control of a newly acquired territory, IS assumes governance responsibilities, establishing sharia police forces and courts. It also oversees religious education, aid distribution, and services such as water, electricity, and sanitation.
Proclaiming to offer an alternative to endemic corruption of past governments, IS frequently receives support from local civilians initially. However, IS’s intrusion in civilians’ daily lives, enforcement of rules about appearance and behavior, and savagery of punishment quickly results in popular acquiescence through fear . This dynamic may ultimately prove to be IS’s undoing, as its ruthless tactics and totalitarianism have led to disaffection and exodus of civilian populations.
The Islamic State controls significant financial resources. In 2014, external parties estimated that IS generated ~$50 million in monthly income and held between $1.5-2.0 billion in net assets .
Oil production from IS controlled facilities is its largest source of income. IS is estimated to produce between 30,000-80,000 barrels per day; even if sold at a price of $25 per barrel, this would generate daily income between $2-4 million . Additional sources of income include: bank and civilian asset seizures, business extortion, highway checkpoint “tolls”, and prisoner ransom payments. Importantly, IS appears to have sufficiently diverse sources of revenue to survive the loss of any one in particular, including oil production.
IS’s financial operations have proven invaluable in supporting its strategic “business” goals. With this income, IS maintains civilian infrastructure, purchases weapons, and provides salaries to fighters. These wages serve as an important recruitment tool to attract supporters; with salaries of nearly $350 per month, fighters earn nearly five times as much as ordinary Syrian civilians .
IS leverages extensive media efforts to garner support, promote its images, and raise money.
IS has been prolific in content production and dissemination as a result of its decentralized media structure. In the last two years, media efforts have been expanded beyond its original media outlet, al-Furqan Media, to include other outlets such as al-I’tisam Media, Ajnad Media, and al-Hayat Media, as well as provincial-level media offices .
The media operation of IS produces a range of propaganda material, including al-Naba, its annual report, and Dabiq, a digital magazine published in English and European languages. Both are expressions of IS’s sophisticated approach to articulating its caliphate vision.
IS has also demonstrated an advanced prowess in its use of social media, and in effect, actively crowd sources its propaganda. IS and its supporters have an active presence on outlets such as Twitter, YouTube, and Facebook. The decentralized distribution systems of these platforms have maximized its outreach and allowed its message to spread directly to its intended audience.
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