Al Qaeda is feeling the impact of the economic crisis. US and European officials say the group is trying to cut costs that could impact long-term activities such as training, recruitment, travel and communications.
Al Qaeda gets much of its money from the Gulf region which has been hit by the financial crisis
New al Qaeda recruits are feeling the pinch. Twenty six-year old Frenchmen Walid Othmani, for example, set out for Pakistan together with another Frenchmen and two Belgians as volunteers determined to die a martyr's death.
Othmani expected to be welcomed with open arms and Muslim and tribal hospitality. Reality could not have been more different; jihad proved to be a costly, inhospitable affair. A father of two from Lyon, Othmani borrowed 700 euros ($950) from his mother to purchase hiking boots, a sleeping bag, thermal underwear and a "big Columbia-brand jacket for the cold."
Arrested and interrogated by authorities after he returned to Europe disappointed and disillusioned, Othmani said Saudi al Qaeda members, living in a world of suspicion and disarray as a result of US Predator drone attacks, feared the volunteers were spies.
Dodging missile attacks, fighting off disease and struggling with boredom and a querulous environment in cramped, rundown buildings, the Saudis grilled the group and ordered them to fill out forms detailing their personal lives to ensure that they were not undercover agents. Once approved each of the volunteers had to pay 900 euros for the emission of AK-47 rifles, ammunition and grenades.
Their al Qaeda commander conceded that the group's recruitment videos "served to impress the enemy and incite people to come fight, and he knew this was a scam and propaganda," Othmani told police according to his investigation file. Othmani's statements were corroborated by US intelligence intercepts and monitoring of his Internet activity.
Al Qaeda feeling the pinch
Othmani is not alone in his description of an al Qaeda no longer able to ensure that it can fund the needs of its fighters and agents. The commander of the group's Afghan operations, Mustafa Abu Al-Yazid, last year complained that he was short of food, weapons, and supplies. Paul Cruickshank, a Fellow at New York University's Center on Law and Security, reported in a study of al-Qaeda recruitment, that European recruits, in a major departure from past practice, were required to pay 400 euros for a two-week paramilitary training course in addition to the money for equipment and weapons.
Al Qaeda's Ayman al-Zawahiri has been appealing for donations
Deputy al Qaeda leader Ayman al-Zawahiri has appealed in recent months in numerous videos for donations, including an August 2009 request to the people of Pakistan to "back the jihad and mujahideen with your persons, wealth, opinion, expertise, information, and prayers."
US and European counterterrorism officials say the financial squeeze has forced al Qaeda to restructure but has not rendered it unable to operate, witness the failed Christmas Day bombing of a Detroit bound US airliner - would-be suicide bomber Umar Farouk Abdulmutallab, scion of a wealthy Nigerian family, paid for his own ticket to Detroit - and the recent killing by a double agent of seven CIA officials in Afghanistan.
Al Qaeda no longer moves money, much of which it gets from the Gulf, through the banking system. Instead, it transports funds with cash couriers and through informal money shops known as hawalas.
While Saudi Arabia has cracked down on funding of terrorism, other Gulf states have been more reluctant to do so. US officials note that Kuwait has done little to crack down on donations and introduce sweeping terror finance laws.
The officials point to a Kuwaiti refusal to curtail the Revival of Islamic Heritage Society, a prominent Kuwaiti charity, that they say funds al Qaeda's network. The group has denied any terror ties and continues to operate. Richard Barrett, coordinator of the UN's al Qaeda-Taliban monitoring team, however, notes that Kuwaiti authorities last September intercepted a courier carrying tens of thousands of dollars for al Qaeda.
Speaking in January to the Council of Foreign Relations in New York, US Assistant Secretary of Treasury for Terrorist Financing David S. Cohen said a recent joint al Qaeda-Taliban attack on government buildings in Kabul had targeted the Afghan Central Bank rather than nearby buildings such as the presidential palace and the Justice Ministry.
"Al Qaeda leaders, unlike their Taliban hosts who are heavily involved in the lucrative drug trade, do not currently have significant financial resources," Barrett wrote in a recent report.
Down, but not out
Al Qaeda is relying increasingly on the profits from the Afghan heroin trade
Barrett's assessment, supported by US intelligence analysis, is challenged by some former officials. Michael Braun, who resigned two years ago as chief of operations of the US Drugs Enforcement Agency (DEA) says there is “clear evidence showing al Qaeda's growing involvement in the Afghan heroin trade on the Pakistan side of the border… "There are growing numbers of investigative leads headed in that direction."
While officials differ over the involvement of the core group around Osama bin laden, they do agree that the financial squeeze is one reason that al Qaeda affiliates such as al Qaeda in the Arabian Gulf (AQAP) and al Qaeda in the Islamic Maghreb (AQIM) enjoy far-reaching autonomy and has propelled some like AQIM to work with crime syndicates to develop new sources of revenue.
Popularity on the wane
While the global crackdown on money laundering and funding of terrorism is taking its toll, so is waning public support in the Muslim world for al Qaeda's nihilistic approach and the decline of al Qaeda in Iraq. Polls show that starting with al Qaeda's attacks in 2003 on residential compounds in Saudi Arabia, a growing number of Muslims view the group unfavorably.
"Iraq was very important for them. The fact that they are doing less kidnapping, extortion and smuggling in Iraq means less money in circulation," says Paul Cruickshank, the New York fellow. Al Qaeda in Iraq's financial significance was highlighted in a 2005 letter from Al Zawahiri to then al Qaeda leader Abu Musab al-Zarqawi requesting a 70,000 euros transfer. Al Qaeda has denied the authenticity of the letter, but US intelligence officials, who intercepted it, insist the letter is genuine.
Squeezing al Qaeda financially has proven to be easier than exerting financial pressure on other targeted groups like the Taliban, Lebanon's Hizbollah and Palestine's Hamas who have developed deep social roots through the provision of institutionalized social services.
In a recent book, University of California professor Eli Berman argues that to undercut groups with deep roots in society, the US and its European and Gulf allies will have to fund competing services. Berman concedes that this would be a costly undertaking but writes that "in the long run, those constructive approaches may well be cost-effective for the United States and other developed countries that are subject to international terrorism, because they are potentially sustainable."
Author: James M. Dorsey
Editor: Rob Mudge