British military chief: Coalition squeezing Daesh funds in economic warfare campaign

The US-led coalition against the Daesh is squeezing the group's revenues from oil, taxation and financial markets but it needs to step up its campaign of "economic warfare", The Telegraph quoted British Air Vice-Marshal Edward Stringer as saying.

The senior military chief, who is leading British government efforts to disrupt the Daesh of Iraq and the the Levant's financing alongside international allies, said the jihadist group was showing signs of the pressure on its finances.

But he told parliament's foreign affairs committee: "It's a pseudo-state and we need to think in terms of how you take a state structure apart. So we're involved in economic warfare."

Experts have noted a recent reduction in the Daesh group's oil production, largely down to air strikes by the US-led coalition and Russia.

The IHS research group last week said production in Daesh-controlled territory was down from 33,000 barrels to 21,000 a day since the middle of last year.

It said the group's total revenues had fallen 30 percent from around $80 million (71 million euros) in mid 2015 to $56 million in March 2016.

Stringer said oil still represented around 40 percent of the jihadists' revenue, but noted that it was largely sold within their territory, where there was a captive customer base who could not negotiate on price.

Another 40 percent comes from extortion, taxation and the local cash economy, with the remaining 20 percent from selling antiquities, donations and other sources, according to British government estimates.

These revenues are also under strain from air strikes that have reduced Daesh territory, and thus its tax base, and which have destroyed stores of cash in northern Iraq worth "hundreds of millions" of dollars, Stringer said.

Stringer said there were signs that the coalition's actions were beginning to take their toll.

Source: MENA