To Weaken ISIS in Syria & Iraq, Exploit Its Declining Economic Legitimacy as a State

03/25/2015 04:52 pm ET | Updated May 25, 2015

Last September, U.S. President Barack Obama said "we don't have a strategy yet" to stop ISIS in Syria. Seven months later, U.S.-led coalition airstrikes are in full swing, the U.S. is supporting certain Syrian and Iraqi forces against ISIS, efforts have begun to choke off ISIS' revenue streams and the White House has hosted its first global summit to brainstorm ways to counter extremism. That's progress, however mixed. Still, the U.S. strategy for weakening ISIS is missing a key component -- exploiting ISIS' declining economic legitimacy as a state in Syria and Iraq.

We have to remind ourselves that ISIS isn't a typical terrorist group. ISIS' leadership doesn't just want to launch an attack for maximum publicity and then move on to the next target like al Qaeda. They want staying power -- they want to take over entire swaths of territory across borders and govern their citizenry like a legitimate state. ISIS has made some strides with certain administrative offices (e.g. courts, educational programs) and services (e.g. humanitarian aid). But a key role of any state is also to provide citizens with basic goods through its economy. This is precisely ISIS' weakness -- one that U.S. policymakers should be strategically exploiting in Syria and Iraq.

The ISIS economy is shaky at best. A recent report from the Financial Action Task Force notes ISIS' "need for vast funds to meet ... governance requirements" but its financial model may not be "sustainable". Yes, analysts suggest ISIS is the richest terrorist group today, making $1 million to $2 million a day in oil black market sales even post-air strikes, approximately $500 million from bank thefts and large sums from kidnappings and extortions. But managing this money is a different matter altogether.

ISIS is starting to face a cash crunch as it slashes the salaries of some recruits by 75 percent. More critically, ISIS is failing to provide certain economic goods to its citizenry, leading to some frustration. Prices of basic commodities are rising, as ISIS has cut fuel and bread subsidies. In some parts (e.g. Raqqa city in Syria), water and electricity shortages recur on a daily basis, while elsewhere women and children struggle to find food and medicines needed to survive. The lofty expectations set by ISIS are not being met and some reports suggest citizens feel the situation now is worse than previous years of "international sanctions, poverty and injustice". This is eroding the economic legitimacy of ISIS as a governing state.

In a typical state, such conditions would lead to bursts of anti-state protests by citizens (e.g. think of recent protests in Ecuador or Spain). Could that happen in ISIS-run territories at this point? Obviously not, given that ISIS rules by terror and there is no legitimate alternative for these citizens. Still, we should consider how we might exploit this aspect of ISIS -- its weak economy -- to accelerate the legitimacy crisis of ISIS as a state.

How can we do this? There are two basic steps to consider in the coming months. First, there needs to be some kind of public communication campaign letting the citizenry know how the ISIS economy is falling short across all of its territories. This would counter local narratives by ISIS about their so-called skills at governance. Second, and this is tricky yet crucial, we need to convince these Iraqi and Syrian citizens in ISIS-run territories that there are or will be alternatives. Let them know there are others who are concerned for their well-being and can provide certain economic goods that ISIS might be failing to. Maybe this will come in the form of UN or coalition supplies of food, water and medicines being dropped by air. One report suggests this was attempted by U.S. military aircraft back in August 2014 to help Iraqis trapped on a mountain by ISIS, but this needs to be done more often in ISIS-controlled areas. (Worth noting another report suggests U.S. weapons dropped by air for Kurdish fighters ended up in ISIS' hands). At the very least, these basic steps will reinforce to citizens that ISIS is losing legitimacy as a state, cannot indefinitely govern and others are offering help, even if local alternatives are unclear at this time.

Obviously, this basic anti-ISIS strategy is not without its flaws. If we manage to expedite the legitimacy crisis and those in ISIS-controlled territories in Syria and Iraq eventually manage to rise up against the state, what will come next? We can only expect violent instability and even more unpredictability involving ISIS' next moves, hindering our ability to fight this terrorist group. Still, it's worth considering how accelerating the economic legitimacy crisis of ISIS as a state might be another way, so be it minor, to weaken its hold on Syria and Iraq.