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Islamic State group sets out first budget, worth $2bn

The IS group is gradually setting up the paraphernalia of a state [Getty]

Date of publication: 4 January, 2015

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The IS has reportedly prepared its first annual budget, in which it projects a $250 million surplus, and has opened an Islamic Bank in Mosul.

The Islamic State group (IS, formerly known as ISIS) has approved a 2015 budget of $2 billion, with an expected surplus of $250 million, a religious leader in Mosul has revealed.

The IS group's first budget comes as part of a broad development programme for its declared territory, Naji Abdullah, a tribal leader in the city, told al-Araby al-Jadeed.

According to Sheikh Abu Saad al-Ansari, a senior religious figure in Mosul, the budget reportedly includes monthly wages for the poor and disabled, orphans, widows and families of individuals killed in the airstrikes carried out by Iraqi and US-led coalition forces.

Ansari said the budget contained up to $2 billion of expenditure, covering all areas of the "caliphate" in Iraq and Syria, said Abdullah. The IS group plans to divert the expected surplus of $250 million to its war effort, according to the Iraqi tribal leader.

The IS group reportedly plans to divert its expected $250 million surplus to its war effort.

The announcement of an IS budget comes just days after it had reportedly established an Islamic bank in Mosul, offering loans and the possibility of exchanging damaged bank notes.

The IS group took control of Mosul almost seven months ago, along with vast tracts of northern, western and central Iraq.

Fighters banned

Mosul residents have told al-Araby the IS group has now banned its fighters from entering the city or roaming residential streets without official authorisation, threatening punishment for any violations of this new rule.

Residents also said the IS governor of Mosul had charged the recently formed paramilitary police force with keeping the peace and making sure fighters remain on the edges of cities, preventing them from travelling inside Mosul in their uniforms or with weapons without official business.

One witness said IS had this week issued a series of decrees. He also said the IS had executed three civilians accused of being apostates and traitors - while just a few hours later distributed free sacks of grain and vegetables to households using trucks that had arrived from Deir ez-Zor.

Income streams

Fouad Ali, an expert on armed groups in Iraq, told al-Araby the IS group now had multiple sources of revenue - including oil, royalties, zakat (a tax levied to help the poor), donations extorted from merchants, and spoils taken from enemy security forces, military bases and raids on convoys transporting the wages of public servants.

The group also seized cash from 62 government and non-government banks upon taking Mosul, Tikrit, Fallujah, and 13 other cities.

Ali said a budget of $2 billion was likely an understatement, given its recent revenues. The majority of spending goes on salaries for the fighters, paid between $500 and $650 a month, said Ali. The IS group also provides daily meals and assistance to residents of the cities it controls, in an attempt to win local support.

All for propaganda?

Most IS spending goes on salaries for fighters, paid between $500 and $650 a month.

Ali said the IS' recent moves to establish a bank and declare a budget were neither logical or realistic, but part of a propaganda effort meant to undermine the morale of the coalition and the Iraqi government.

However, Ali said, this does not mean that the IS group is able to establish an independent economic system able to address the economic crises in the areas it controls.

Iraqi sources in Mosul reported this week that the IS group had established its own central bank in the city, which they had dubbed the Islamic Bank.

Residents said the IS bank accepts deposits and seeks to replace obsolete or damaged paper currency to crack down on theft and fraud. The bank also allows Iraqis to replace bank notes merchants no longer accept.

The IS group has also started distributing ration cards bearing the group's logo in return for a nominal fee, and issued instructions to withhold rations from anyone not in possession of a card.

This is an edited translation from our Arabic edition.

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