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Financial Records of al-Qa’ida in Iraq Reveal That Most Insurgents Aren’t in it For the Money

2011 January 12
by rahul

I just read a fascinating RAND report titled “An Economic Analysis of the Financial Records of al-Qa’ida in Iraq.” By some not-so mysterious process, the U.S. military got its hands on some of the financial records of al-Qa’ida in Iraq from 2005 and 2006; as the report itself mentions, this gives the opportunity to get the same kinds of insights as those of Sudhir Venkatesh and Steven Levitt when Venkatesh obtained the financial records of a gang in the Chicago housing projects.

The records shed light on the scale of the organization, its mode of operation, and the motivations of its members; the natural conclusions to be drawn contradict, at least to some degree, the conventional wisdom on the matter.

Between June 2005 and May 2006, AQI took in $4.3 million, of which over half came from selling stolen goods (contrary to the CW, very little of this apparently came from oil theft), and over $5oo,ooo from “spoils” taken, presumably, from Shi’a or collaborators (often denounced as apostates by such groups). Only $233,000 came from “donations” (it’s hard to tell whether this means taxes or some other kind of donation, and, of course, it’s impossible to tell how coercive the process of receiving donations was). Donations amount to 5.4% of the total revenues. Later, their fund-raising stepped up dramatically, and they took in another $4.3 million from June to November of 2006. Of this, barely over $114,000 was donations.

This fact is likely part of the explanation for the insane and self-defeating brutality of AQI. Jeremy Weinstein’s book Inside Rebellion: The Politics of Insurgent Violence argues that a key determinant of how well an insurgent group treats the population under its jurisdiction is how dependent it is on that population for its funding.

The book is based primarily on interviews, and covers Yoweri Museveni’s National Resistance Army in Uganda, RENAMO in Mozambique, and the Shining Path in Peru (which he divides into the national Shining Path and an organizationally distinct group based in Peru’s Upper Huallaga Valley). The NRA and the national Shining Path got most of their revenues from taxation and more or less (a little less in the case of the Shining Path) treated their populations reasonably well. This doesn’t, of course, mean that they didn’t use violence against them; legitimate authority requires coercion or the threat of coercion to sustain it, and insurgent groups don’t have the advantages of states, which may have a long history of coercion to draw on.

RENAMO, of course, was funded primarily by the United States and South Africa, and was often sensationally brutal with the populace in areas it controlled; the Shining Path of the Upper Huallaga relied primarily on drug money, and acted likewise.

The fact that AQI only got 5%, going down to 3%, of its funds from donations clearly puts it, in Weinstein’s analysis, in the RENAMO camp. “Spoils,” though some part may have been taken from the population, came from parts of the population targeted for extermination or expulsion, so are not relevant to this analysis.

Now, this sort of analysis, based more or less on considerations of instrumental rationality, doesn’t take into account ideological factors. RENAMO, for example, had no claim, legitimate or otherwise, to represent the interests of the people; it was purely a group created by outside powers to destroy FRELIMO, which was a normal left-leaning guerrilla insurgency. In other words, they were a lot like the Nicaraguan contras, minus the initial legitimacy of a few of the latter, who were anti-Somoza as well as anti-Sandinista. This may well have had something to do with their brutality.

AQI, unlike RENAMO, was and is intensely ideological. They are similar, however, in that their ideological drives had nothing to do with the interests of the people in their locale. AQI was focused on international jihad (indeed, the RAND study finds that it ran a considerable surplus and transferred a significant amount of money to al-Qaeda in Pakistan) and, seemingly, on killing lots of Shi’a. Insofar as they had the interests of Sunnis at heart, they valued martyrdom as much as anything that can be gained in this world.

It is absolutely not true, however, that members were motivated largely by greed, as frequently suggested in Western media and military accounts. Nir Rosen, who I imagine knows more about insurgents in Iraq and Afghanistan than anybody else in the United States, inveighed against this idea in a recent interview:

But you often hear American soldiers talking about if you, as if it’s the Sopranos, they like to go back to Sopranos metaphor, as if the primary motivator for people fighting occupation is money and not what it really is, issues of dignity, of freedom, of nationalism, of ideology. It’s almost as if Americans aren’t able to understand those concepts and they think that Taliban are fighting for $10 a day. And I just have not seen that with the Shabab in Somalia, I haven’t seen that in Yemen, or Lebanon or in Afghanistan or in Iraq. They’re fighting for their communities.

I don’t believe that, in the case of AQI, they are fighting for their communities (as I said), and I doubt Rosen means it either; he’s probably just saying that the lion’s share of insurgents, not all of them, that he meets do conceive of things this way.

According to AQI’s careful accounting, of their expenditures, only 10% were military, although one might add the 5% for “payroll and medical.” This is in part because, apparently, they paid their members shockingly low wages (and I would guess the medical benefits weren’t the greatest, either). A single member would get 60,000 dinar a month in 2006, with an extra 30,000 for each dependent. This translates to $41 per month, with an extra $20 or so per dependent. Crunching the numbers, and comparing with the results of several household surveys in Anbar, the RAND researchers find that per capita compensation by AQI was less than half that for Anbar as a whole, and household compensation was about one quarter of the average for the province (apparently, AQI members had much larger households).

As they point out, this lower compensation happens even though they are at a much higher risk of violent death (using Iraq Body Count data, they estimate the risk for an AQI member as 48 times that for a man 18-48 in Anbar). Much like Venkatesh’s ordinary gang members (who made about minimum wage), they’re not in it for the money. In the case of AQI, though, I think it’s pretty clear that the primary reasons for membership are ideological. Now, what exactly these guys had a true belief in is unclear. It seems to be an extreme interpretation of Islam by people relatively uneducated in Islamic theology, ruling by the seat of their pants while carrying out and experiencing phenomenal amounts of violence.

In any case, it’s crystal clear that fund-raising activities undertaken by this group were primarily done in order to sustain the organization and keep it fighting, not to make members rich (the economics of the leadership is unclear from all of this); why this has been so difficult for Western journalists and military people to understand is markedly less clear. After all, nobody says that American soldiers are primarily fighting for the money (there is probably no quicker way to anger a soldier than to suggest he is a mercenary).

How much these conclusions generalize is unclear. The report says that in this period AQI was the dominant insurgent group in Anbar, although I seem to recall Ansar al-Sunna being pretty active as well. Some of the Shi’a gangs at the height of the devolution into violence may have had a different mix of motives, although, unless we get a look at their books, we can’t be certain. My guess is that, mostly, members of the neo-Taliban, like AQI members, are not in it for the money–despite reports that the Taliban pay several times what the Afghan National Army or Police pay.

In any case, it would be nice if people talked a little less nonsense about insurgencies, though one shouldn’t hold one’s breath waiting for it to happen.

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