Terrorist Finance (merged thread)

[Rex Brynen]

I would really suggest actually reading the book before you write it off. You may not agree with her world-systemic analysis but she gives a lot of insight into how armed groups operate and are funded. Also I bet there is some new information in there that you will be happy to have read and learned.

Actually, I read most of what she has on her website before posting--and, as I said, was not impressed. Partly, this is because her sweeping meta-economic analysis gets in the way of her insights into particular operational and financial intersections.

Moreover, some of her insights into insurgent finances are simply wrong--for example, her throw-away statements on Fateh's diversion of funds in the Arafat era are incorrect, and show no knowledge of the vast amount of OS material on the mechanics, destinations, and purposes of revenue diversions (including a very large IMF report and several available forensic audits). In the same piece she quotes Arafat on Hamas (a completely unreliable source), and in so doing contributes to a grand tradition of exaggerated accounts of Israel's role in Hamas' creation. She also dramatically overstates the magnitude and role of Hamas financing and social services in recruiting (again, an area where there is some OS data).

These might seem nitpicks, but they all point to an inclination to shoehorn data to support a grand thesis, and in so doing distorting the former.

[relative autonomy]

These might seem nitpicks, but they all point to an inclination to shoehorn data to support a grand thesis, and in so doing distorting the former.

You're probably right, I am not all that familiar with Hamas to evaluate her or your claims. Her thesis is probably too board to be proven but at the same time i think there is some worth to trying to explain events on the level of world systems. It's nice to have frameworks to locate events within even if the framework flattens some of the complexity.

I would like to know if anyone else knows of another work that tries to explain the macro-economics of the war on terror?

As far as her analysis being tainted by her politics, i don't think that makes different than any other person who has ever written anything. Jedburgh, maybe it just seems like more of a problem becuase you don't agree with her politics? Either way, calling a well researched book by written by a former Fulbright scholar and London School of Economics PhD "junk" is a bit misguided. Every work has it flaws and personal biases but if we only read what we agree with were not really interested in solving problems as much as perusing political agendas and I think therein lies the fundamental dilemma of the war on terror but that is another topic.

At the end of the day, though, I think her basic argument is spot on: that corrupt dictatorships, supported by foreign powers, have kept an increasingly dynamic business class down in the middle east. This political situation, coupled with Cold War meddling in wars of national liberation, created very real motivations for armed to groups to form and try to out-administer their state and create a economy that can provide for the population better than the formal one. These economies came to be linked becuase they operate in the same clandestine space and often share the same broad political goals. The fact that Islamist banks filled the power vacuum in the Central Asia and the Caucuses--two places were the War on Terror existed in a very dramatic fashion before 9/11--after the USSR collapsed and Soviet subsides dried up speaks for itself. I think conflating this with the crusades is a bit much but I think an ambitious economic analysis of the War on Terror is needed and, as far as I know, this is the only work that attempts to do so.

[Jedburgh]

As far as her analysis being tainted by her politics, i don't think that makes different than any other person who has ever written anything.
Everyone writes from their own personal perspective. However, when composing anything that purports to be an in-depth analysis of an issue, it is important to make a conscious effort to put those personal biases aside, otherwise the final product leans more towards op-ed than reasoned analysis. I tend to be more dismissive of the former than the latter.

Jedburgh, maybe it just seems like more of a problem becuase you don't agree with her politics?
Now you are the one making assumptions. Anyone attempting to come to grasp the nuances of any issue needs to look at it from many points of view. Dismissing perspectives because you dislike their politics is foolish. Dismissing a product because it is poorly put together is a completely different matter. I think perhaps Rex's specific observations highlighted the latter point about the book better than my general comment.

Either way, calling a well researched book by written by a former Fulbright scholar and London School of Economics PhD "junk" is a bit misguided.
I you believe that Fulbright scholars and PhDs (the institution doesn't matter) are somehow on some sort of intellectual pedestal and incapable of publishing "junk", then you still have much to learn.

[relative autonomy]

jedburgh, i understand your points and i think they're fair enough but do you know of any economic analysis any work similar to this that you think is superior?

[Jedburgh]

...Do you know of any economic analysis any work similar to this that you think is superior?

No. I'll just quote Rex here:

More broadly, I think there is an interesting phenomenon whereby a variety of audiences--politicians, policymakers, the press, the public, even new CT professionals--look for an easy, engaging, sweeping diagnosis and answer to current security challenges. In my view, not only is it NOT that easy, but the real pay off is in understanding precisely the complexities and variations at work.

The operational funding of terrorist networks and autonomous cells is a very complex issue that also encompasses such diverse subject areas as transnational organized crime, diaspora funding of insurgent movements, narco-and-human trafficking, black markets - both local and transnational, etc. To truly understand all of the above in the context of any specific terror organization also requires a baseline of knowledge about that organization's operational structure and the environment in which it operates.

Rather than seeking a single tome with all the answers, I suggest good old fashioned research and study. It would probably help if you initially narrow your focus and try to study in-depth just one aspect. Look over what's available from official sources, such as EuroPol, FinCEN, the GAO, NCJRS, etc. etc. as well as looking over products from the wide spectrum of private entities. The people who show up at Congressional and Senate hearings on the subject often have interesting things to say - and the transcripts are almost always available on-line. As an FYI, Tamara Makarenko is one author who has written a great deal of substance on transnational organized crime as well as its links - existing and potential - with terrorism.

[bourbon]

As an FYI, Tamara Makarenko is one author who has written a great deal of substance on transnational organized crime as well as its links - existing and potential - with terrorism. [/URL]

I have been raiding my local libraries Jane's achieves, burning out Xerox's, copying Makarenko articles these days. Good info there.

Has anyone read Alms for Jihad: Charity and Terrorism in the Islamic World, by J. Millard Burr and Robert O. Collins? Cambridge press got sued under the U.K's generous libel laws by an Arab businessman, and they recalled the lot and pulped it. I snagged a copy. If there is interest, it's possible a contraband pdf could materialize out of the ether.

[Jedburgh]

WINEP, Nov 08: The Money Trail: Finding, Following, and Freezing Terrorist Finance

....Chapter 1, the introduction to this monograph, provides a broad overview of the subjects we cover, as well as some of our basic findings. In chapter 2, we explain the importance of the little-understood efforts to combat terrorist financing, and why they are and should be an important part of the global counterterrorism campaign. Chapter 3 lays out how terrorist financing—like the terrorist threat itself—is rapidly evolving, frequently in response to international efforts to combat it. As we discuss in this chapter, the terrorist groups’ adaptation in how they raise, store and, move funds can often frustrate governmental efforts to detect and stop them. In chapter 4, we assess U.S. and international efforts to combat terrorist financing since the September 11 attacks—first laying out the many areas where steps forward have been taken, then exploring some of the remaining challenges. In chapter 5, we gauge how effective U.S. and international efforts have been, pointing to specific signs of success in an area in which progress is often difficult to measure. In chapter 6, we offer numerous recommendations for U.S. policymakers to bolster the international regime in this critically important area. Chapter 7 provides three case studies, providing “status checks” on the terrorist-financing related activities of three key terrorist groups—al-Qaeda, Hamas, and Hizballah.....

[Rex Brynen]

Let me move the discussion away from Napoleoni for a moment, and towards a broader issue that has increasingly troubled me. It may seem like a bit of a tangent to begin with, but you'll see by the end how it connects.

Since 9/11, there has been--for obvious reasons--a dramatic expansion in the number in the number of (government) analysts addressing CT and Middle Eastern issues. Many of these have been newly-minted graduate (or even undergraduate) students with some topic or area expertise. Some of this group are already very good, some may be good one day, and some are far from impressive. A key issue here will be mentoring, and whether organizations have the seasoned, skilled, mid-level analysts who can nurture a new generation. A second key issue will be human resource management, and whether the system recognizes and appropriately deals with the gifted, the promising, and the flawed among the new recruits.

In addition, there are a number of organizations with traditionally little CT or ME analytical responsibility, where they've felt the need to develop it, whether by new hires or by reassigning mid-level professionals with very different previous responsibilities. I've found that, at times, this group seeks an overarching framework of analysis, a theme or motif as it were, to make sense of the complex new world and responsibilities into which they've been thrust. As a result, they buy into catchy (sometimes rather politicized) explanations that reduce issues to near sound-bites, and hence make the complex world around them more intellectually manageable.

A case in point: I was at a conference of security and intelligence professionals and scholars a few weeks ago in which a great number of the participants fell into this later category. One of the speakers was Melanie Philips, British author of the book Londonistan.

Now, I recognize that immigration, refugee policy, diasporas, and multiculturalism all have security implications. However, Philips presentation (and the book) was a thinly-veiled rant against all of these things in the name of preserving a narrow, even racist, vision of British identity. As her website notes:

Melanie Phillips pieces together the story of how Londonistan developed as a result of the collapse of British self-confidence and national identity and its resulting paralysis by multiculturalism and appeasement. The result is an ugly climate in Britain of irrationality and defeatism, which now threatens to undermine the alliance with America and imperil the defence of the free world.

The actual presentation was far more strident.

As I listened to her, I was certain that everyone in the room would see her simplistic, narrow-minded, highly ideological "analysis" for what it was. Much to my surprise, however, a great many people found it attractive: the problem of terrorism could be simply understood by recognizing that we had departed from our classic 1950s values, that we had contaminated Western culture with foreign imports, that we had become defeatists inappropriately ashamed of the grand colonial past, that the vast majority of Muslims were jihadist sympathizers, and that consequently immigration and refugee policies were little more than fifth columns. Typically those that found the call most seductive were middle-aged professionals recently thrust within their departments into some sort of security and intelligence role, and much less so younger analysts (and almost no one with any extensive analytical background in the issues). Clearly there was a real danger that this simple (and simplistic), nicely-packaged drivel
could drive out much more nuanced, messy, and less easily digested diagnosis. As someone who spends his analytical time with well-informed, experienced area and issue professionals, it was frankly quite a shock.

My reaction to Napoleoni is, in some ways, fueled by the concern that although she offers a very different analysis (and clearly knows her issues infinitely better than Philips, who is a political columnist and not a scholar), it offers the same kind of seductive appeal and suffers from some of the same shoehorning of data to fit a preconceived analytical frame.

I've also become intrinsically suspicious of scholars and analysts with flashy self-promoting websites that use their own name as the domain URL

Jedburgh (and anyone else): I would be interested if you've observed any of the same issues arising from the expansion of CT and analytical capabilities within organizations, especially those with less prior experience in these areas. Or did I just have an unlucky experience?...

[Rex Brynen]

The problem with writing SWC posts from your office is that you get distracted by phone and visitors, take half an hour to finish your comment, and one of the regulars posts on an overlapping issue before you can get your two cents in

[Abu Suleyman]

While I have yet to read the book, and am loathe to comment based merely upon a review, or a summary which may over simplify an otherwise elegant explanation, I think that the title may be of value.

Perhaps it is just me, but the title seems to be reminiscent of the Murder Inc. of depression era Organized Crime. In that case, organized criminality became an industry, almost unto itself. Of course there were supporting funds, such as the ubiquitous prostitution, extortion and 'rum running'. Nevertheless, it is possible that there is an undercurrent of political economy. This may be worth exploring in a separate thread. Are we dealing with an entire economic movement, and if so is it more like the advent of the automobile industry, and part of the existing structure, or is it more like communism and antithetical to existing economics? Should this be discussed elsewhere, or has it already been?