Terrorism on a Budget

In order to operate successfully, all terrorist organizations require a constant stream of funds. Those funds come from both outside the conflict region and from within the region itself. International funding from outside the region is traditionally the most lucrative form of financial support. This often includes more than just monetary funding, but also specialized training and equipment. Smaller amounts of funding are obtained through illegal business fronts, sympathetic foreign businesses and criminal activities. In combating terrorism, governments work to disrupt these major forms of funding.

While this is still crucial to financially debilitating large insurgent organizations, it does not address the often smaller transactions that directly fund terrorist acts on foreign countries. Small, low-scale budget attacks are becoming the norm. In 2004 the Madrid train bombing cost less than 15,000 USD, and the attacks on London’s mass transit system in 2005 cost an estimated 2,000 USD. The Mumbai 2008 attacks, the recent attacks in Paris 2015 and the string of current knife attacks in Israel represent a continued trend of low-cost terrorism.

The cost and logistics involved in these forms of terrorism are miniscule when compared with the 500,000 USD that was the estimated budget and cost of flight training for the 9/11 attackers. Yet, the impact of low-cost terrorism is still politically and economically substantial. The immediate financial impact after the Paris attacks was estimated to be in the tens to hundreds of billions of dollars in lost revenue. The indirect costs associated with terrorism in terms of increased local and foreign security spending and decreased tourism have long-term negative economic effects. The loss of tourism had a significant effect in Bali after the 2002 Bali bombing, where 40% of employment was tourism based. Even in a diversified city such as London, the attack of 2005 was estimated to cost £750 million in lost tourism revenue. A similar effect will occur in France, a country where tourism accounts for 7.5% of GDP. The highly interconnected European economy and the greater global economy now means that low-budget terrorism can adversely affect multiple economies outside of the targeted nation. Even failed attacks can have a tremendous impact on both the civil population and the financial sector.

The difficulty lies in detecting and preventing the funding, and dismantling these low-cost terrorist cells before they can attack. As the funding is usually raised in the targeted country rather than externally financed, there is no large foreign transfer of funds to be detected. The low cost minimizes the risk of detection, while still having a substantial impact on the economic and political, as well as a loss of life.

Current counter-terrorism operations have been focused on limiting terrorist capabilities abroad, preventing entry into the country and disrupting terrorist cells within the country. The government has spent billions in hardening airports, embassies and other strategic facilities. This has not effectively stopped terrorism but rather shifted it towards softer targets that favor low-budget terrorism. In certain areas of security this “shift” in terrorism has actually caused an increase in the loss of life.

In order to combat low-budget terrorism, financial vigilance in conjunction with a strong human and signal intelligence operation is required. Terrorist organizations will always have the strategic advantage, as they can choose the target and timing of their attacks. The goal is not to shift the target, but to change the target.

This can be accomplished by subverting the terrorist organization and the associated ideology to erode the hierarchy and local support. The first step is to remove local support for the organization. A system of area ration and supply control/denial based on the Malayan Emergency experience would be implemented. Area control would be performed by financially encouraging dissidence within the cultural landscape and local ethnic groups. This would create a fractured regional framework of multiple fiefdoms and limit the movement of people, rations and supplies.

Recruited indigenous operatives impersonating the terrorist organization can be used to harass/attack the civil population and assassinate prominent public figures who act as terrorist liaisons. A ‘scorched earth’ approach could be used to displace the local population from a region which is supporting the terrorist group. An emphasis would be placed on supplying and developing fringe ethnic/tribal groups that already feel marginalized by the terrorist group. The aim would be to initially deny local support to the terrorist organization and eventually develop popular support against the terrorist group.

These tactics can be expanded to include attacking other terror groups or performing acts of terrorism in countries offering foreign support to the terrorist group. These acts of subversion would be performed using recruited indigenous personnel who would have no operational knowledge. An example is the recent ISIS bombing of Hezbollah in Lebanon. This type of event could be capitalized on and manipulated by impersonating ISIS and making additional attacks on Hezbollah or faked retaliatory attacks on ISIS. The objective is to create diversionary conflicts to drain the terrorist organization of its finances and resources.

Financial manipulation could also be used to create distrust, jealousy and disruption of the terrorist organizations hierarchy. This could be accomplished by giving increased or decreased funding (monetary, equipment or resource) to mid-level terrorists in leadership positions along a single ethnic or tribal line. The funding of mid-level management would appear to senior management as an indication of corruption or collaboration with the enemy. The other mid-level management from different tribal factions would see it as tribalism and request the senior management to adequately compensate them. There is no way that senior leadership could handle the situation without creating a significant amount of distrust and tribalism. Similar influence operations could be used to dissolve the leadership structure, cause the organization to fracture along tribal lines and derail its global ambitions.

The use of fabricated social media and “leaked” internet videos could be utilized for a global affect. An internet campaign that included the creation of hundreds of fake webpages, Facebook and Twitter accounts by agents claiming to represent the terrorist organization could act as a conduit for falsified information. These accounts would sporadically inject false information and imagery. At the same time, any would-be terrorist that tried to make contact with any of these accounts could be investigated and tracked. As the campaign progressed, the amount of misinformation would increase and start changing the image of the terrorist organization. This negative “re-branding” phase would aim to alienate the terrorist organization from global support and jihadi wannabes, ultimately, destroying the image of the organization and its ability to recruit homegrown terrorists.

The key is to change the target of the terrorist organization while globally rebranding it as repulsive to conservative/moderate Muslims. This would effectively decrease the terrorist organizations’ ability to garner funding, maintain leadership, carry out international terrorist attacks and recruit foreign nationals. A regional splintering of the terrorist group would cause local fighting and a dispersal of funding to multiple small and ineffective groups. Combating low-budget terrorism can be successful if the target is ultimately changed to reflect our interests.


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