(From The Economist, 12/17/15)
Can the caliphate be cut off from markets? And what difference would it make? Today America’s treasury secretary, Jack Lew, chairs a summit of the UN Security Council on how to deprive Islamic State of finance. Over the past decade Western governments, led by America, have grown much better at disrupting the ability of terrorist groups (notably al-Qaeda) to raise, move and use money. They have imposed specific financial sanctions and tracked transactions more closely, for instance via the SWIFT financial-messaging service. But IS is less vulnerable because it doesn’t depend principally on moving money across borders: it derives most of its income—several hundred million dollars a year—from activities inside territory it controls in Syria and Iraq, such as oil sales and extortion. The meeting will focus on improving information-sharing and monitoring terrorists’ use of money transfers and pre-paid cards. But the ministers’ arsenal lacks a silver bullet.