After Raqqa's fall, the jihadists will have to look elsewhere for income and influence.
By BOB MASON/FXEMPIREUpdated: OCTOBER 23, 2017 21:53A flag of Islamic State militants is pictured above a destroyed house near the Clock Square in Raqqa(photo credit: ERIC DE CASTRO/ REUTERS)
The campaign against ISIS has made strong progress this year and while the war may yet to have been decided, the battles are going against the Islamic State. News hits the wires over the last few days of a Syrian Kurd and Arab alliance, backed by the US, taking control of Raqqa after three years of ISIS control, as well as major progress on seizing Syria’s largest oil field in Deir-al-Zour.Efforts to free Raqqa from the grips of ISIS had begun in June, shortly after the Iraqi city of Mosul was declared free after an extended air and ground assault led by a coalition of armed forces from across the world, including the US, the UK, Iraqi government forces and the Kurdish Peshmerga among others.A united front with the support of the West has certainly impacted on ISIS. The Islamic group made great efforts in recent years to disrupt the region and take over large portions of both Iraq and Syria, with an emphasis on seizing key oil fields.Perhaps the greatest contribution to the demise of ISIS in the Middle East has been the ability of US led coalition forces to cut the revenue streams of the Islamic State from looting, confiscations, fines, and oil seeing sizeable declines. As the strategy now is to free the larger cities under ISIS control, revenue streams are likely to be hit further, with income from taxes and fees, which accounted for the largest portion of income back in 2016, expected to continue to plummet after a 2015 peak. Revenues from looting are also expected to continue to decline as there is less now for the Islamic State to loot.What effects there will be on the financial markets and the direction of crude, natural gas and even gold prices remain to be seen, but the fact that the demise of ISIS comes from a multinational effort suggests that the ISIS goal to gain control in the Middle East has failed for now.A positive outlook and stability within the region will certainly have an impact on financial markets, particularly with the recent rise of populist governments in the West being attributed to a surge in refugees across Europe as a result of ISIS presence in both Syria and Iraq. The removal of ISIS could see crude oil and natural gas prices be affected as supply disruptions begin to ease and Iraq, in particular, looks to ramp up production in order to earn the much-needed Dollars to rebuild cities such as Mosul that were left total ruin.A world without ISIS A world without ISIS would certainly be an incredible turnaround from just a few years ago, when the mass migration of refugees from war-torn Syria began to grab headlines. There are many challenges remaining, including the existence of smaller ISIS groups that will perhaps look to continue to destabilize the region through a different model that involves attacks similar to those in the West instead of the besieging of entire cities.The return of refugees to their homelands will certainly be the long-term objective of Western governments, particularly those in Europe and the Middle East that have sheltered the masses, not only those fleeing from ISIS but the ever-changing political landscape left by a region divided. According to the United Nations, more than five million Syrians have fled the fighting in Syria and while the majority have sought refuge in nearby Jordan, Lebanon, and Turkey, almost one million have applied for asylum in Europe over the last 6-years. Estimates also stand at approximately three million Iraqis who have fled their homes and are assumed to be living elsewhere within the country.Success in fighting back against ISIS couldn’t have come at a better time for the European elite, as voters' demand for tighter immigration laws has been the driving force behind the rise of the populist governments, as we have just witnessed in Germany, with the populist right AfD coming third in September’s General Election, giving them representation within Germany’s Bundestag for the very first time.Although Europe is likely to see Middle Eastern refugee numbers begin to subside in the coming years, the war on terror is unlikely to see a similar fate. One chilling success of ISIS has been its ability to convert and in vast numbers. Such is the scale of the problem that recent terror attacks in Europe have been carried out by known converts, and it’s a remarkable achievement that many more attacks have not occurred.A concern for the intelligence services could be a redirection of ISIS efforts towards Europe and for the frequency of attacks to begin to rise. Until the refugee crisis is over, the unwanted will still be able to blend and carry out the acts of violence that have gripped Europe over the last few years and with ISIS having lost its strongholds in Syria and Iraq, there is no longer a focal point of attack, just an unknown number of Islamic State militants spread across Western and Middle Eastern nations with the sole purpose of instilling terror and chaos.ISIS' next steps will be watched closely by the West and particularly by Europe, with the Philippines being touted as a possible base, which shifts the instability away from the Middle East, but also means that ISIS will sit further away from the watchful eyes of the EU.Economically, both Iraq and Syria are certainly in a state of turmoil, but with support from the West, progress will be made with political stability establishment as a near-term priority. The Iraqi government is deemed to be well placed to recover more quickly than Syria with its oil revenue, which certainly provides an incentive for the Iraqi government to secure Kirkuk following the Kurdish declaration of independence and claims on certain oil-rich areas of the country earlier in the month.What does it mean for Israel? Recollections of Israeli flags being waved in celebration of the declaration of Kurdish Independence from Iraq will not be forgotten by many, with an independent Kurdistan having been considered as a foothold for Israel in the heart of the Middle East, providing a far more strategic location to monitor old foe Iran. This act symbolizes, more than anything, a sense of unification among Arab nations to rid the region of the ultimate axis of evil and rebuild a region that has been scarred by a history of war and unrest.Just on Sunday, Iraqi Prime Minister Haider al-Abadi and Saudi King Salman announced the creation of a joint coordination council with the purpose to coordinate the fight against ISIS and also to rebuild Iraqi territories recaptured and support Iraq’s private sector. It's an interesting step. More than any other stakeholders, Arab nations have to take control and rule a stable social life in the Middle East.The US may have had a hand in the move by the Saudis to put aside their differences in the interest of pegging back Iran’s ever-increasing influence. A less influential Iran is certainly a more favorable outcome for Israel whose concern has been Tehran’s growing influence in the region and improving relationships with the West. The retreat of ISIS will be expected to ease anti-Israeli sentiment within the region as well as in European countries and will ease concerns of further jihadist motivated attacks on Israel.For now, hopes of an Israeli foothold close to the borders of Iran may need to be put on ice, but with the US President’s anti-Iran sentiment and decision not to certify the nuclear agreement and pass it on to Congress, there’s likely to be another twist to the story on whether Iran’s continued ascendent will be brought to a grinding halt. With ISIS on the back foot and the Saudis looking to entice the Iraqi government, there is certainly an opportunity for Israel to benefit from the Saudis latest efforts to water down Iran’s influence in the region.
