Daesh Finances Pay for More War, Rather Than 'State'

While Daesh has buffed up its propaganda image of a "state," its financial flows indicate that most of the group's funding goes to pay for its war efforts.

The Daesh (also known as ISIL) terrorist group uses the funds generated through its various illicit activities primarily to fund its fighters, according to an investigation by the Financial Times.

Although Daesh claims in its propaganda to actually be founding a state, that does not appear to be the case in the group's finances, according to FT. While Daesh was seen as an alternative to the havoc wreaked by Syrian rebels in 2013 when the group split from the Syrian opposition, it has failed to create the "state" which it claims to have done.

"Tens of millions of dollars more are spent on small munitions and explosives. A single one-week offensive can cost at least $1m in munitions alone, according to FT estimates," the newspaper reported.

In addition, the group spends as much as $1000 per month for each fighter on its books, although wages are lower for locals and non-commanders. However, a drop in the group's income may allow it to keep fighting because it uses violence to retain its fighters, according to a European intelligence official interviewed by the publication.

"They could probably go on for three years," Benjamin Bahney of the US-based RAND Corporation think tank told FT.

The Financial Times report does not name specific sources for its research, although it appears to rely on testimony and materials supplied by defectors from the group.