Financial Futures of the Islamic State of Iraq and the Levant: Findings from a rand corporation Workshop

Introduction    3

swaths of territory, including Mosul and areas to its south along both sides of the Tigris, major 

towns and villages along the Euphrates River valley, areas around Palmyra, and chunks of ter-

ritory east of Aleppo stretching toward Raqqa. More recently, ISIL has proclaimed the Wilayat 

Sahel on the northwestern coast of Syria, where it launched complex suicide attacks in Tartus 

City and Jableh in late May 2016.

1

 Even though the Iraqi Security Forces, Kurdish Peshmerga, 

or Popular Mobilization Units (PMU) are able to retake territory from ISIL, ISIL will likely 

still control significant areas for an undetermined future period. ISIL also still retains the abil-

ity to strike into the heart of Baghdad and its surrounding environs, and ISIL’s potency as a 

terrorist group with lethal reach is unlikely to subside anytime soon. Iraqi and Syrian civil-

ians will continue to suffer the brunt of the damage in terms of both anti-ISIL offensives and 

spectacular attacks conducted by ISIL.

2

 In Syria, both state (Russia and Iran) and nonstate 

(Hezbollah) actors continue to maintain significant influence in various parts of the country. 

In Iraq, the root causes and structural factors leading to Sunni disenfranchisement are still 

unaddressed, and ongoing protests against the Iraqi government inevitably limit Prime Min-

ister Haider al-Abadi’s ability to bring together disparate political factions needed to maintain 

unity.

3

 The United States maintains its current level of training, partnering, weapons supplies, 

air support, and special operations activities.

Scenario Two: Negotiated Settlement

In Syria, Bashar al-Assad is removed from power and a new ruler is placed in power. A nego-

tiated settlement in Syria could result from successful diplomatic initiatives as part of the 

Geneva peace talks on Syria (Geneva III). The major players include a constellation of both 

state and nonstate actors: the former include the Assad regime representing the Syrian state, its 

backers Russia and Iran, the United States, Turkey, Saudi Arabia, and likely some smaller, but 

still influential, Gulf states, such as Qatar. Nonstate actors include various Syrian rebel groups 

across the ideological spectrum and Kurdish factions. The most hardline Islamist groups, ISIL 

and Jabhat al-Nusra, would not be part of a negotiated settlement. A successful, multilateral 

agreement would likely include a cease-fire among all parties involved, with the exception of 

ISIL and Jabhat al-Nusra. Initial governance efforts focus on reforming Syrian institutions, 

forming a new government and creating a realistic timeline for free and fair elections, and out-

lining a plan for reunifying the country in some form. Even with a cease-fire in place, ISIL and 

Jabhat al-Nusra will continue to control pockets of territory throughout central and eastern 

Syria, but will be far more isolated than before the settlement. 

Iraq also achieves a political reconciliation, at least for the short term. In this reconcilia-

tion, Kurdish parties and what is left of the Sunni political establishment agree to cooperate 

with the central government, which, in turn, is more solicitous of their demands. The Kurd-

1  

A wilayat is a province as declared by ISIL. We did not include this definition in the scenario as distributed to workshop 

participants, as all were familiar with the term.

2  

By “spectacular attacks,” we mean mass casualty events, such as vehicle-borne improvised explosive devices set off at 

markets or other places where people congregate. ISIL has carried out such attacks either at different locations almost simul-

taneously, or at the same location in quick succession, with the second blast meant to harm rescuers.

3  

We are grateful to one reviewer for pointing out that this could also appropriately be written as Abadi’s ability to restore 

unity.

---

4    Financial Futures of the Islamic State of Iraq and the Levant

istan Regional Government puts aside an independence referendum. The government, with 

Sunni Arab allies and U.S. support, succeeds in edging the more extreme Shia PMUs (Asaib 

Ahl al-Haq and Kataib Hizbullah) away from counter-ISIL battlefields. 

Scenario Three: Total Territory Loss Through Combat 

Through combat operations, ISIL is expelled from Fallujah, Mosul, and Raqqa.

4

 Assad remains 

in power in Syria, and the Iraqi government remains fractured and ineffective, but the Kurds 

are still part of Iraq. Some ISIL elements may remain scattered throughout Syria and Iraq, 

others may return to their countries of origin, and yet others may flee to ISIL strongholds in 

places like Libya to regroup and continue fighting. While ISIL holds little to no territory, it 

is capable of periodic terrorist attacks against soft targets in major population centers, such as 

markets in Baghdad, and of running a variety of criminal schemes to raise money.

5

 

Structure of the Workshop

When the workshop began, participants were instructed to avoid debating the likelihood of 

each specific scenario or how the research team arrived at these specific scenarios and only 

discuss the implications of each scenario on ISIL’s revenues and expenditures at six, 12, and 

18 months from the start. The research team was present during the workshop to answer any 

questions about the scenarios and clarify any information about the baseline analysis, but did 

not participate in the discussions. 

The RAND team originally planned to guide the workshop discussions through each sce-

nario at the specific six-month benchmarks, but this plan changed once the workshop began. 

The nature of the scenarios, differing assessments provided by the participants, and the multi-

ple variables contributing to ISIL’s future behavior resulted in rich analytic dialogue surround-

ing common themes and patterns that spanned time frames instead of linear analysis following 

a six-, 12-, and 18-month calendar. 

In addition to conversations on revenues and expenditures, participants deviated from the 

financially focused discussion at times to discuss variables affecting ISIL as an organization 

and other actions ISIL might take as a result of successes or setbacks as part of the scenarios. In 

this report, we present main points of agreement and disagreement stemming from the discus-

sions about all three scenarios. The value of presenting main points of agreement is that they 

suggest how ISIL will evolve financially regardless of the actions of the counter-ISIL coalition. 

The value of presenting main points of disagreement is that they highlight the uncertainties 

regarding ISIL’s financial evolution and can guide collection efforts regarding information that 

might illuminate ISIL’s development. 

This report remains faithful to the workshop findings: The authors have not infused their 

own analysis into the document beyond points of clarification. In addition, an earlier version of 

the report was sent to all workshop participants for their comments to ensure the report accu-

4  

Since the workshop, ISIL has been expelled from Fallujah and has also lost parts of Mosul.

5  

This is the scenario as discussed in the workshop. The scenario as distributed in advance was slightly different. This dif-

ference is discussed in Appendix B.

---