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Reports from the Islamic State

27-11-2014 18:41

Whether they are religious or secular in nature, ideological movements are always characterized by a very rigidly defined world view and a utopian longing to build that one, ideal society. The problem they all face, however, is how to implement their ideals once they are in power. The tactics initially employed come down to efforts to win the ‘hearts and minds’ of the population they have conquered, but in practice these exercises soon deteriorate into suppression and violence because most people’s ideas on how things should be organized tend to differ from those of the ones in power.

In the Reports from the Islamic State (IS) series, the split between ideology and practice is the central theme.  ThePostOnline has come into contact with bloggers from the Syrian city of Raqqa, the would be capital of the Islamic State since January 2014. These bloggers include 23-year-old medical student Ibrahim al Raqawi, who was forced to flee from Raqqa and who is now living in another place, and with Abou Mohammed who still resides in Raqqa. They are two of the people behind the website Raqqa is being slaughtered in silence. Based on the interviews with Abou Ibrahim and Abou Mohammed, this series paints a picture of daily life in IS-conquered territory, each time focusing on a different theme or issue.

The editor of the series is Jan Jaap de Ruiter. ThePostOnline has copies of all the chat sessions, which were conducted in English and in Arabic. Click here for part 1 (on education), here for part 2 (on women), here for part 3 (on Christians), here for part 4 (Islamic state also needs to be governed) and here for part 5: The Fate of Infidels. Today we present part 6 ‘Islamic State’s double economic policy’.

Islamic State’s double economic policy

At some point someone in the offices of Islamic State will have cried out that having your own state is a truly wonderful thing, that it is fine thing too that it is based on Sharia, but that these things in themselves are not enough to keep the pot boiling. Every state needs money to function. Money keeps the economy going; money makes it possible to hire qualified personnel, or in the case of IS, hardened jihadist. In the words of former US president Bill Clinton: ‘It’s the economy, stupid’.

Away with the world economic system

An American- or Western-style economy is the last thing IS wants, which means the organization is facing a serious challenge. If you do not want to take part in the international financial system, you are on your own, and you will have to create your own autarchic space.

But as we have seen before, no challenge is too big for IS. If you want no part of the Western capitalist system, why not simply go back to the gold standard? Back to money that is real money, in the true sense of the word. Back to coins made of gold, silver, and copper. Coins that have a value instead of merely representing a value. As it turns out, this is exactly what IS intends to do. Literally coining and bringing into circulation their own currency. A recent decision to that effect was elucidated in a declaration coming from the so-called ‘Bait al Maal’, the IS ‘Department of Finance’. As the department puts it, the international monetary system, maintained by ‘Zionists and crusaders’, is there to ‘squeeze Muslims, to reduce them to poverty and to deprive them of their riches’. The capitalist system has become estranged from the true source of the economy: money that has intrinsic value in the form of gold, silver and copper. In a formal sense, paper money represents gold, but this gold standard was abandoned long ago, and if people today were to hand in all their paper money at the bank, and all their virtual money besides, in exchange for gold, the whole system would collapse. There simply is not enough gold to cover that.

IS-gold, silver and copper coins

IS is embracing this golden rule and going back to the ancient and time-honored system. The operation is both fascinating and bizarre. How will it turn out? They are introducing real gold coins in units of one and five dinars; silver coins in units of one, five and ten dirhams, and copper coins in units of 10 and 20 ‘fils’, or cents. The weight is indicated on the coins. The basic weight unit of the gold coins is 4.25 grams; that of the silver and copper coins is 10 grams. The five-dinar coin would then be 21.25 grams of gold, making it correspond to a current value of over 800 dollars. Incidentally, it is not quite clear to me what the exact proportions between the coins are. What is clear, however, is that your average Western wallet or purse could not hold them. You would really need an old-fashioned money pouch to carry the coins around in. Would it be possible to deposit your money (cash) at an IS bank? That is a question we have not yet heard an answer to.

Trading with the enemy: as long as there is a profit in it.

Meanwhile, IS is displaying a flagrant disregard for the autarchic monetary system they are supposed to be introducing. When the oil and gas fields within IS territory had not been bombed yet, the jihadists were extensively engaged in trade, selling oil and gas to – hostile – neighboring states, including even the Syrian regime. The value of this trade at the time was estimated at two million dollars a day. The bombings have now severely restricted this type of trade, but this has only encouraged IS to take other measures to bring money in.

Extra taxes

Abu Ibrahim tells me that IS has begun to impose an extra tax on the traders within its territory. They are to pay 1500 Syrian pounds, some 7 euros, each month, most likely in the form of paper money, with the 1000-pound bills showing a portrait of the hated dictator Assad. Payment is due each month, without exception, with corporal punishment ensuing in case of default. It is a lot of money to pay for traders in what can safely be called a wartime economy. Besides this, so Abu Ibrahim also tells me, IS is selling electricity to the energy network still run by the Assad regime. This power is generated at the dam in the Euphrates River, north of the self-proclaimed IS-capital of Raqqa. As a result of this trading with the devil, there is a chronic power shortage in the IS territory itself, amounting to an average of as much as 4 hours a day without electricity in the ‘capital’ of Raqqa.

The Faculty of Fine Art

As part of the efforts to bring in more money, IS has set up an old-fashioned system of checkpoints. Merchants and traders from Turkey, Iraq or Assad territory are welcome, but for the region of Raqqa they have to report at the organization’s Customs Office, which has established itself in what used to be the Faculty of Fine Art. Here, their merchandise is appraised and taxes are levied. It is not just stuff coming in that is taxed. The same applies to merchandise leaving the city, which is likewise appraised and taxed.

The best of both worlds

Islamic State intends to introduce a classical economic model based on the true value of (precious) metals. Leaving aside whether this will ever really happen – just think how long it took before the single European currency was introduced – we can conclude that IS makes no bones about taking advantage of the ‘excrescences of the capitalist system’. When asked when he thinks the new monetary system will be introduced, Abu Ibrahim tells us he has not got the faintest idea. Nothing would appear to be impossible for IS, but in this case intentions may very well continue to be just that, and meanwhile IS can comfortably go on making (dirty) money thanks to the accursed system of Zionists and crusaders.