Islamic State endures setbacks

Military campaign has had successes, but threat persists.

WASHINGTON — U.S. airstrikes have killed 25,000 Islamic State fighters in Iraq and Syria and incinerated millions of dollars plundered by the militants, according to Pentagon officials.

Iraqi and Kurdish forces have taken back 40 percent of the militant group’s land in Iraq, the officials say, and forces backed by the West have seized a sizable amount of territory in Syria that had been controlled by the Islamic State, also known as ISIS or ISIL.

But the battlefield successes enjoyed by Western-backed forces in the Islamic State’s heartland have done little to stop the expansion of the militants to Europe, North Africa and Afghanistan. The attacks this year in Brussels, Istanbul and other cities only reinforced the sense of a terrorist group on the march, and among U.S. officials and military experts, there is renewed caution in predicting progress in a fight that they say is likely to go on for years.

“Even as we advance our efforts to defeat Daesh on the front lines,” Deputy Secretary of State Antony J. Blinken told a congressional committee last week, using another name for the Islamic State, “we know that to be fully effective, we must work to prevent the spread of violent extremism in the first place — to stop the recruitment, radicalization and mobilization of people, especially young people, to engage in terrorist activities.”

Instead of engaging a pseudo-state in the Middle East whose fighters have proved susceptible to U.S. airpower, the United States and its European allies must now also engage in a far more complex struggle against homegrown militants who need relatively few resources to sow bloodshed in the West.

“Defeating the formal military presence of a terrorist group will not significantly mitigate the threat of lone wolf or small independent cells that are based in the West,” said Jonathan Schanzer, a former terrorism finance analyst at the Treasury Department who is now with the Foundation for Defense of Democracies in Washington.

Attacks in the West are cheap to finance — Schanzer estimated that the cost of the materials used in the Brussels attack and the lab needed to make the explosives, for instance, was $10,000 to $15,000. And, he added: “You can defeat ISIS in ISIS-controlled territories but you’re not going to defeat ISIS itself. The ideology of jihadism continues to evolve and continues to exist.”

While some officials have sought to portray the recent attacks in Europe and Turkey as evidence that the Islamic State is growing desperate as a result of its battlefield losses, far more officials and experts see the violence as another indication that the Islamic State is not a problem that will be quickly or easily overcome.

Officials on both sides of the Atlantic acknowledge that the Islamic State, which has looted an estimated $1 billion from bank vaults across Syria and Iraq and is widely seen as one of the richest militant groups of all time, remains a resilient and adaptable battlefield adversary, still able to mount spectacular acts, like the abduction of at least 170 workers from a cement factory near Damascus earlier this month.

In Mosul, Iraq, and in Raqqa, the Syrian city that is the Islamic State’s de facto capital, salaries for fighters have been cut in half since last year, according to residents and documents. But even with reduced salaries, U.S. officials say, the Islamic State, which collects hundreds of millions of dollars by extortion, fees and taxes on the people it rules, is still paying its fighters.

“There is no simple tool to separate ISIL from its vast wealth,” Daniel L. Glaser, the assistant Treasury secretary for terrorist financing, said recently in a speech in London.

But administration officials say that the twin efforts to militarily shrink the group’s dominion in Iraq and Syria and to cut into its finances have fed off each other.

The strategic aim is to deprive the militants of the resources they need to wage war by retaking their towns, cities and oil fields, and by American accounts, they have been succeeding.

Since late October, a U.S. air campaign called Operation Tidal Wave II has targeted oil fields, refineries and tanker trucks, and U.S. officials believe they have cut the Islamic State’s oil revenue by about a third. On the ground, the Islamic State has lost a series of cities and towns since it seized Ramadi, Iraq, almost a year ago, its last major battlefield victory. Iraqi security forces, backed by U.S. airstrikes, have retaken Ramadi.

Iraqi forces have also retaken the northern city of Baiji, with its oil refinery. And Kurdish and Yazidi forces have driven Islamic State fighters out of the northern city of Sinjar.

In recent weeks, U.S. airstrikes have killed what administration officials said were top Islamic State leaders: the group’s minister of war, Omar al-Shishani (Omar the Chechen), and a top commander, Abd al-Rahman Mustafa al-Qaduli. An Islamic State chemical weapons specialist, Sleiman Daoud al-Afari, was captured by U.S. Special Operations forces in February.

At the same time, officials acknowledge that the Islamic State has been able to replace many of its leaders and that taking key figures off the battlefield will not necessarily finish off the group.

Alongside the military efforts to disrupt the Islamic State’s finances, the Treasury and its European counterparts are pursuing a number of paths to cut the flow of cash to the group, and to keep it from using the international banking system. They persuaded Iraq to prohibit bank branches in cities and towns held by the Islamic State from making international transfers, instead ordering all requests to be routed through the central bank in Baghdad, where they can, in theory, be intercepted and stopped.

The United States, European countries and the United Nations have also all sought to add people or companies associated with the Islamic State to financial blacklists.

In addition, U.S. officials prevailed upon the Iraqi government to finally stop paying salaries to its officials and workers who live in areas controlled by the Islamic State. The payments totaled about $170 million a year, U.S. officials said, and the Islamic State skimmed off about 10 percent or more of each paycheck in taxes.

The falling price of oil, which the militants typically sell on the black market for about half the going rate, has also hurt the Islamic State, U.S. and European officials believe. This time last year, oil was selling for nearly $60 a barrel; it is now around $45.

Coalition airstrikes have in the meantime hit at least 10 depots where the Islamic State stored hard currency. In January, U.S. aircraft struck what officials said was a particularly rich stockpile, and video taken in the moments after the building was hit by a bomb showed plumes of currency fluttering through the air.

The military said tens of millions of dollars were incinerated, though other U.S. officials and experts were less bullish.

“There’s a lot less certainty about how much money actually evaporated,” said Howard Shatz, a senior economist at the RAND Corp.

Whatever the amount, a siege mentality appears to have developed in territory still held by the Islamic State.

Obaida Nama, a retired engineer there, said he did not think the Islamic State would last.

“The corruption that ISIS is committing is the beginning of its end,” he said.

BRYAN DENTON / THE NEW YORK TIMES A fighter from the Kurdish peshmerga forces fighting the Islamic State near Sinjar, Iraq, in November 2015. Iraqi and Kurdish forces have taken back 40 percent of the militant group’s land in Iraq, officials say, and forces backed by the West have...