The government of Iraq’s decision to choke the funding for the radical militant group Islamic State by cutting off pensions and wages in cities the radical group controls, has plunged people into great hardship and could help insurgents get a firmer grip on control, say residents and some officials.
For 12 months after the fighter of the Islamic State swept through over a third of the country, Baghdad continued paying salaries and pensions of employees inside the IS caliphate.
However, since this past July, all those payments were halted which has deprived entire cities with pensioners, doctors, civil servants, teachers, police, nurses and workers at companies owned by the state from receiving income.
The move was intended to cut the militants from IS from a stream of income they were skimming to fund efforts to build their own self-sustaining state in Syria and Iraq.
However, officials as well as residents in the areas held by the militants say it left the residents in more despair, alienated from their government and many feel as though they have been abandoned.
Islamic State rules the caliphate over large areas of the northern region of Iraq and eastern Syria with an uncompromising and violent vision of Islam.
The group has many ways it can fund its operations – looting money in hard currency from the banks, selling oil at captured fields, extorting, kidnapping or taxing people.
Financial Action Task Force, based in Paris, which is an intergovernmental body that oversee efforts around the world to fight terrorism financing, and money laundering, identified salary payments as one of the recurring sources of money for the IS, potentially giving them hundreds of millions of dollars each year.
Officials from the government conceded that cutting salaries off was painful for people affected, but said they could not continue to in effect bankroll the IS caliphate.
All state workers are to be reimbursed once the areas are liberated as well as those that have or can escape the territory under control of the militant group.