• The Islamic State’s economic war


    Ben D. Kritz

    IN one of our editorial discussions here at The Manila Times recently, the observation was made that the ongoing battle between the Islamic State-linked Maute group and the Philippine military in and around Marawi City does not have much impact on the national economy. A host of respected analysts here and abroad have also come to the same conclusion.

    On the surface, that assessment seems correct. Marawi City is a minor city that does not have a great economic output even in the best of times; prior to the May 23 attack by the Mautes, the poverty level was about 60 percent. Likewise, the surrounding province of Lanao del Sur is the country’s poorest, with a poverty incidence of about 74 percent.

    Economic warfare, however, is at the very heart of IS strategy, and certainly played a role in the Maute group’s choice of Marawi City as a target for a major operation.

    That is not really a matter of speculation, because the IS has always been clear about their strategy, sharing it publicly for anyone who wants to read it in their surprisingly well put together magazine Dabiq, which can be found online if you look hard enough, and is routinely cited in the IS’s extensive social media operations.
    Although the IS presents itself to its media audience as a government of a physical state, the group understands that militarily it is a terrorist organization. The IS has no problem with this, because they believe – not without some justification – that terrorism is an effective mode of warfare. The characteristics of a terrorist force are a loose organization bound by a general ideology, which also provides basic operating principles; a focus on attrition rather than material gain in overall strategy; and operating at the minimum necessary cost.

    The IS didn’t invent the strategy, of course, but refined it from what came before, particularly in terms of its cost-benefit profile. The benchmark they seem to follow is the September 11 attacks on the US by al-Qaeda (even though the IS hates al-Qaeda and wants them all dead): The attacks that took down the World Trade Center and several other buildings in New York and severely damaged the Pentagon in Washington cost about $500,000 to carry out, but did at least $10 billion in direct damage, and pulled the US into a “global war on terror” that has cost at least $5 trillion so far.

    IS has even developed a helpful infographic, which was published in Dabiq, to explain their economic warfare strategy as it applies to their latest innovation, truck attacks by so-called “lone wolf” terrorists, for which the magazine provides helpful instructions and tips for its readers who might be inspired to give mowing down a crowd of pedestrians a try.

    In case the graphic is hard to read, IS breaks down the cost of an attack into direct losses, which include responding to the emergency, disruption of business and normal activities, and damage or destruction of facilities; medium-term losses, which include lower stock prices, losses in the tourism and insurance industries, a rise in internal security costs; and long-term losses, which include increased defense and security spending, higher facilities oversight costs, higher unemployment, and increasing social and political instability.

    All of these anticipated economic outcomes apply to the Marawi City battle, although it is obviously a more conventional military action. The government is pouring a vast amount of financial resources into an area where those would otherwise not be spent, which means that something, somewhere else, is getting shortchanged as a result; the longer the battle goes on, the more the economy outside Marawi City is going to be affected. Tourism and other business has certainly been impacted, and internal security costs have risen as well, most obviously in Mindanao due to the demands of martial law, but in the rest of the country as well.

    And no one can even guess how many other would-be “lone wolves” the ongoing fight is inspiring; the main IS organization, for its part, obviously considers the Marawi battle marketing gold, and is milking it for all its worth in its various media. A significant point being made is the repeated failure of the Philippine military to meet its own deadline for “clearing” or “liberating” Marawi (yesterday, June 12, was at least the third target date missed); the not so subtle implication in IS’s media message is, “Go ahead and strike a blow, because we can beat these guys.”

    When every attack can potentially result in economic losses tens of thousands of times greater than the cost to carry it out, an enemy like the IS and its adherents begins to look less like a ragamuffin gang of thugs and more like a sophisticated and dangerous adversary that will not be easily defeated, and might not be if our leadership doesn’t start taking it seriously.



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