Aisha Ahmad: Jihad & Co: Black Markets & Islamist Power

* CBC: Follow the money to understand why Islamist groups succeed, says Jihad & Co author: Full Conversation: Transcript

Follow the money to understand why Islamist groups succeed, says Jihad & Co author

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Even in a country wracked by civil war, the local bazaar can be a colourful place. But where others may see silk scarves and colourful spices, Aisha Ahmad sees something more. “I can see the price of war on every single one of the price tags in the bazaar,” Ahmad tells The Current’s Anna Maria Tremonti. Her new book, Jihad & Co.: Black Markets and Islamist Power, traces a trail of the financing of Islamist groups.

In order to have goods travel across a conflict zone, a businessperson must pay security to warlords and mercenaries manning their own checkpoints. This can mean dozens of payments if the goods have to cross the territory of multiple armed groups.

At a certain point, these added costs can make goods — everything from sugar to heroin — too expensive for anyone to buy. For a businessperson trying to keep their goods affordable, Ahmad says, Islamist groups can seem like a practical solution.

“Islamist groups can do something that other types of armed groups can’t,” she tells Tremonti.

“They can say … we both have a common Islamic identity and so, therefore, buy into our protection racket. And they can charge a lower rate across the board. And why is that? It’s because they appeal to a larger identity group than the narrowly defined ethnic and tribal factions that predominantly govern in these types of conflict zones.”

Ahmad points to the rise of the Taliban in Afghanistan in the 1990s,and the rise of the al-Shabaab-linked Islamic Courts Union in Somalia in the 2000s as examples. In both cases the countries had been caught in a brutal battle between ethnic or clan warlords for years. The Islamist groups promised not only cheaper tax rates that were better for business, but also order and the rule of law.

“There’s a moment where you fear in your body that any rules are better than no rules,” says Ahmad.

“If you have complete anarchy and no one is constrained in any way, then there’s nothing I can really do to protect myself. But if there’s a system of rules, even if I don’t like the rules, that at least I can think, how can I play by them so that I can keep myself alive.”

The rise of ISIS in Iraq and Syria in 2014 reflects the same kind of story, says Ahmad. Once the Islamist groups such as ISIS, the Taliban or the Islamic Courts Union gain power, discontent starts to build among the business class, especially if the groups impose strict religious rules about what goods can and can’t be sold.

But at that point, Ahmad says, there’s no easy way for the business community to reject the regime they initially bought into. “Once they’ve pushed out their warlord competitors … and have established a monopoly on force, created a proto-state, you don’t have an exit option anymore,” says Ahmad.

This segment was produced by The Current’s Karin Marley. .


Full Conversation Transcript

Guest: Aisha Ahmad AMT: Hello I’m Anna Maria Tremonti. You’re listening to The Current.

SOUNDCLIP [Music] [Sound: Gun fires]

NEWS CASTER 1: American backed Syrian fighters say they liberated the city of Raqqa from ISIS.

REPORTER 1: We witnessed them celebrating on the streets of Raqqa. They were in a victorious mood after a four month long battle. [Sound: gun fires]

NEWSCASTER 2:The stupidity and the evil at the Haqqani Network’s kidnapping of a pilgrim and his heavily pregnant wife engaged in helping ordinary villagers in Taliban controlled regions of Afghanistan… [Sound: Shouting in indistinct language]

NEWSCASTER 3: It bears all the whole box of the terror organization Al-Shabab. They haven’t claimed responsibility, I must stress that, but it is by far the deadliest bomb attack in Somalia’s history. [Music]

AMT: Well from the defeat of ISIS Raqqa, Syria to the release of the Canadian hostage Joshua Boyle and his family from the Taliban linked Haqqani network, based in Afghanistan, to the bombing in Somalia that filled the streets with protests against al Shabaab, these various militant Islamist groups and jihadist organizations across a wide geographical region may be connected by extremist ideological ties. But there’s another important thread running through them as well, according to Aisha Ahmed. And that threat is the money that funds the groups. And it begins in the market stall. Aisha Ahmed is an assistant professor of political science she is director of the Islam and global affairs Initiative at the Munk School of Global Affairs at the University of Toronto. She’s also the author of Jihad and Co.: Black Markets and Islamist Power. And Aisha Ahmed is with me in Toronto, hello.

AISHA AHMAD: Thanks so much for having me on Anna Maria.

AMT: I’ve been to markets in conflict areas in different parts of the world, but where I might see a cacophony of colorful fabrics and spices, you pick out the beginnings of a trail of funding for Islamist organizations. How does that trail start in a bazaar?

AISHA AHMAD: You know when you walk through that bazaar Yeah it’s absolutely it’s the silk fabrics and the spices and what not but there’s more to it. At this point in my life I can tell you I can see the price of war on every single one of the price tags in the bazaar. I can see the costs of war. because you also know that in a conflict zone that means that there are multiple armed groups that are controlling territory. And so imagine yourself as a businessperson. You’re trying to move things from point A to Point B to point C. That means that you have to pass through multiple different types of protection rackets. That means that as you enter into warlord A’s territory, you’re entering into that protection racket and that means that you know what as a business person, how are you going to secure your goods? You’re going to be paying at checkpoints. You’re going to be paying taxes directly to those warlords. And what I’ve tracked over the course of my career is the cost of doing business in these conflict zones. And so right now the whole world is looking at places like Somalia and Afghanistan and Iraq as ISIS are being pushed back. But the truth is that the rise of all of these groups in these conflict zones has a very clear business logic behind it. And so the cost of doing business in conflict zones actually drives these hidden business elites in these environments to build a relationship with Islamists that helps finance their rise to power.

AMT: And they have to build this relationship in order to continue to be business people, in order to continue to make money to feed their families.

AISHA AHMAD: So let’s imagine that you and I are trying to do business in two different areas. Let’s imagine that I’m in Kabul and you’re in Kandahar and I’ve got goods that I’d like to sell to you, but in order for me to get my goods to you I have to pass through three or four different warlords ethnic warlords, in order to get my goods to you. That means not only am I paying protection money to the guy who’s running the turf that I live in but in order to get it through the next one I have to make a partnership with that person. And then you’ll have to pay taxes to your warlord. And then that level of ethnic and tribal fragmentation in a context of civil war, gets really expensive for us because that just means we just paid three times the amount of taxation. Now here is where Islamists can do something that other types of armed groups can’t. And that is that they can come to you and me and say “look you are in Kandahar I’m in Kabul but we both have in common Islamic identity. And so therefore buy into our protection racket” and they can charge us a lower rate across the board. And why is that. It’s because they appeal to a larger identity group than the narrowly defined ethnic and tribal factions that predominantly govern in these types of conflict zones. And I can tell you that speaking to businesspeople in Mogadishu what they said was for every $100 we were paying to the warlords, we could pay $35 to the Islamic Courts Union to remove them. That was back in 2006. And so behind the rise of all of these Islamist groups there is a very clear business logic that explains why the business community in these environments would end up in this strange marriage with Islamists that seem to have very different types of interests.

AMT: And you make the point that that we are not only talking about guns and bullets we’re talking about rolls of fabric and bags of sugar.

AISHA AHMAD: It’s kind of ridge to talk about legality and illegality in places where there’s no rule of law. And so the same folks who are you know trading in sugar and in rolls of fabric might at some point find themselves transporting a convoy of medication. Maybe some of that medication is counterfeit medication. So there’s a whole spectrum of commercial activities from what we would consider to be licit to in the gray zone to the complete black market. So I mean we look at conflict zones and we imagine that it’s all poverty and destitution, people living in refugee camps and you know you and I’ve probably been to a lot of those refugee camps. And so yes there is poverty and there is destitution. But you know for a savvy business person when the state fails there are huge opportunities to make money, in both licit and illicit trade because the regulations are gone. There is no rule of law. But what you have to do in order to succeed in this game is you’ve got to be able to move your goods, and that’s where navigating the roads and navigating the security environment becomes the primary consideration. And that’s where Islamists can really do well. You have deep knowledge of these markets particularly of a gun market near Peshawar in the tribal regions of Pakistan.

AMT: When did you first go to that market?

AISHA AHMAD: Oh dear. Well I was actually a little girl. I mean that sounds totally inappropriate. But the truth is that you know this story has been something I’ve been living with for my entire life. My family are from Peshawar Pakistan, border region between Afghanistan and Pakistan. And you know the war started in Afghanistan before I was born and my family were part of the merchant class. When I was a little girl my grandfather who was a kingpin of the business community in Peshawar, and that business community was primarily a trading community all the way back to the Silk Road. You know my ancestors were involved in the camel caravans that pass through those mountains. And then when the state emerged that became complicated and that those business communities were not interested in paying taxes. And so a nascent smuggling industry started to emerge in which they were selling things, like tea and clothes in sacks of sugar, but avoiding customs duties. And the Pakistani state allowed that just in order to maintain peace with the unruly border region. But then after the Soviets entered into Afghanistan, we have all heard that story from Charlie Wilson’s War, about to have the United States and the Pakistanis made a covert deal that they were going to back the Mujahedeen to you know stand off against communism. And how were they going to do it. The Americans were not going to drop military convoys and weapons directly into Afghanistan. They needed a way to smuggle them in. They made a secret deal with the Pakistani intelligence community that what they would do is supply the weapons and then the Pakistanis would take them over that unruly border region. Now who in that unruly border region knew how to smuggle goods? It was that same business community.

AMT: It was your grandfather and all his business associate.

AISHA AHMAD: Absolutely. I grew up watching men with their suitcases of cash, crates of guns. My grandfather’s stately manor in Peshawar was across the street from an Army base. And I remember the big commanders would come to the door and how very polite and respectable business meetings with my grandfather about moving supplies. And there was also adjacent to Peshawar, a town called Darra Adam Khel, which yes I very inappropriately played and when I was a child and that was an arms manufacturing town.

AMT: They would do knock offs essentially.

AISHA AHMAD: Absolutely.

AMT: A total little factory town.

AISHA AHMAD: And what a Mujahed could do is kill a Soviet fighter, take his gun, give that weapon over and then they’d study it, examine it, and then create a replica. And then you could come back with not only the Soviet weapon but also 10 replicas. So absolutely I grew up sort of bearing witness to things that were defining in the war. The intersection between the violent conflict and the economic environment.

AMT: Well let’s look at some specifics then. So first of all the emergence of the Taliban under the very kind of thing you’re talking about. Remind us then the situation in Afghanistan at the time that the Taliban emerged.

AISHA AHMAD: Well you know that was one of the bloodiest periods in Afghan history. We just had 10 years of brutal Soviet occupation and a resistance that had been funded by the United States. And the nature of that resistance had been organized in a decentralized way. Now after they defeated the communists and the Soviet Union collapsed then everybody forgot about Afghanistan, and those different warlord groups started to fight over Afghanistan in what became a very brutal civil war. And so we see an extreme level of fragmentation along ethnic and tribal lines.

AMT: So the very thing that you’re talking about being able to move goods from point A to point C has to go through all of those factions.

AISHA AHMAD: And it’s stalled trade all the way back to Karachi port. No one could move because think about it; if I’ve got to pay 40 checkpoints between Jalalabad and Kabul, by the time my goods get to Kabul, I have to offload those taxes onto the price and then no one is going to buy. And so therefore you don’t sell. And so the business community was incredibly frustrated with the rate of taxation that it was paying. And this is the point where they started to make a strategic decision in which they needed to get themselves out. And it happened…

AMT: This is the business elite essentially making a strategic decision.

AISHA AHMAD: This is the trading community, the smugglers and the traders, the business class that we’re moving goods across borders and that includes both licit and illicit goods. That’s sugar and that’s heroin. That community that was overpaying along the roads was getting fed up. And in 1994 there was this this moment, and there is the true story and then there’s the story that everybody believed. And the story that everybody believed was that there was a young girl who had been kidnapped by one of the local commanders in Kandahar and was being gang raped off the side of the road. The community then went to a local mullah named Mullah Omar. And so Mullah Omar who became the leader of the Taliban got together a handful of his students or Talebs and then stormed the base, freed the girl and hung the commander from a barrel of a tank, and then paraded him through the streets saying this is what will happen if you molest Afghan girls again. Now I’ve talked to members of the Taliban. The reality was much more mundane than the story and tragic. But you can imagine how much people wanted the heroic rescue story to be real.

AMT: So the heroic story of Mullah Omar it becomes emblematic of his respect and how his religion is something you can trust that he becomes a trustworthy person as the leader of this new group the Taliban.

AISHA AHMAD: Absolutely.

AMT: And so the business elite does what?

AISHA AHMAD: So all of a sudden you have a new player on the ground that is held to a higher standard, a higher spiritual standard than all of these rapacious militias. They started to clear checkpoints in the areas that they held. This won the support of the business class very quickly. So in areas that the Taliban held control they made sure that they did not impose any checkpoints and that they accepted at that point only voluntary donations rather than direct extortion.

AMT: So, suddenly the business community can save money.

AISHA AHMAD: Oh my Goodness.

AMT: And be safe. But they’re dealing with Islamists. Drug and gun smuggling businesses aren’t particularly Islamic.

AISHA AHMAD: Well you know nobody said anything about the drugs until much later. So if the Taliban and the Islamic Courts Union in Somalia all of these groups, when they’re first rising to power they don’t say “oh by the way part of our campaign platform is that we’re going to make your businesses illegal.”

AMT: But the businesses then, they embrace that religiosity because it speaks to being a person of faith, but they start to become more Islamic as well, do they not? In order to do business with these Islamist groups.

AISHA AHMAD: Actually that relationship of being more Islamic happens far before the Islamists even show up to power. The business community already needs Islam in these environments. So I remember when I said that you know, if I’m in one territory and you’re in another and we want to do business we still have to pay multiple taxes. Well how would I even come to a point where I think I can do business with you. I mean imagine. I’m Tajik and you’re Uzbek and our groups are fighting. How can I trust that you’re not going to run off with the loot.

AMT: If you think I believe the same things you do. If you think I answer to the same God, then you might be willing to trust me.

AISHA AHMAD: Absolutely in fact I was talking to a professor of economics from Mogadishu University and he said, imagine you’re at the market and there’s one person who’s chewing khat. He’s high and he’s got smoke in a cigarette and he looks like he hasn’t prayed in 100 years, and there’s another guy in a different stall and he has a long beard and got prayer beads out and he looks very pious. Who are you going to trust isn’t going to swindle you? And so these are information shortcuts to fill what is an extreme trust deficit. And Islam is not just about piety. There are a set of rules and norms about economic transactions.

AMT: So let’s move from the Taliban to the rise of Al Shabab in Somalia. The latest bombing just killed more than 300 people.


AMT: Hundreds more hurt. What does that, first of all, tell you about Islamist militants in the country?

AISHA AHMAD: We’ve been talking about how business has helped Islamists rise to power and gain a certain type of political capability. And that story tells us about how they can build order. Now that is not the story of what has just taken place in Mogadishu. In fact it’s the opposite. So what we’ve seen in Somalia is a systematic loss of power for al-Shabab. They’ve lost tens of millions of dollars in taxation revenue from Kismayo port because they were pushed out of that territory. And they’ve been in decline ever since.

AMT: That’s when groups like that fall.

AISHA AHMAD: Absolutely because, think about it, once you lose that kind of money you can no longer pay for your foot soldiers. And so how do you stay relevant on the battlefield? When groups lose territory and revenue, they actually engage in more terrorist style attacks that are cheap, brutal but it’s a sign of their weakness.

AMT: So the Islamic Courts Union, which is a religious Islamist organization, rose up in Somalia again under the scenario you describe in Afghanistan. In Somalia they were the ones that brought stability.

AISHA AHMAD: Absolutely. And in fact I would like to point out the Islamic Courts Union is not synonymous with Al-Shabab. It was a very very much, a grassroots and much more inclusive Islamic movement that aimed at reversing what had been over a decade of nonstop clan warfare and fragmentation. You know you had a thriving business community that had grown from both licit and illicit trade and were frustrated with the fact that they couldn’t move goods. And so the Islamic Courts came in as a movement to bring together what were literally Islamic Sharia courts that had been providing pockets of governance across Mogadishu, and said “okay, let us create a unified movement.” And what they were able to do is get the buy in of the business class. So they were able to provide better security for less of a cost. 70% of the business community yank their funding from their warlord protection racket that represented their clan group and put it into the Islamist protection racket that they believed could overthrow them. And in six months they took 90% of the countryside.

AMT: It’s extraordinary because if you look at – if you look at when ISIS moved into Raqqa and made it their de facto capital of their caliphate. I remember the stories coming out at the time of business people who said “you know quite frankly we can do business again.”


AMT: And they said “we’re now we’re getting electricity. We’re getting water, because when ISIS moved in there the Islamic State Daesh, you know those many names for that organization – they created a facto government. I have actually got a quote here you say “across the Muslim world the Proto state acts as a practical 21st century political alternative to the contemporary failures of nationalism and tribalism.”


AMT: So this was a way for people to actually live their lives under that. That’s how it begins.

AISHA AHMAD: Absolutely and in the Iraqi and Syrian context, like we’re looking at a period of fragmentation and corruption on the part of the government. I mean ISIS got its start in Mosul in Iraq. And the people of Mosul they were fed up. They were forced to pay to different groups that were both non-state armed groups and also the Maliki government’s armed forces that were extorting themselves. And so that creates an incentive for buy in – the idea that you could pay taxation to one group as opposed to 10 different groups – absolutely fueled the rise of Daesh. Now that said, they have really really lost favor with people now because they have taxed the heck out of everybody.

AMT: And they’re very brutal.

AISHA AHMAD: Yes. I mean no one is sad to see them leave.

AMT: But this raises the other question. At some point, what looks like a safe way to live and a way to operate can all turn again.

AISHA AHMAD: I think about it myself because I I’ve spent time in in a number of conflict zones and I can say that there is a moment in which you fear in your body that any rules are better than no rules. If you have a complete anarchy and no one is constrained in any way then there’s nothing I can really do to protect myself. But there a there’s a system of rules even if I don’t like the rules that at least I can think “okay how do I play by them so I can keep myself alive?”

AMT: So I can survive and feed my children.

AISHA AHMAD: Absolutely. But very quickly across the board you see that there is discontent. The Islamic courts weren’t in power for very long, but the business community themselves as soon as they realized “oh you’re banning khat and cigarettes. Wow that sucks.” But what happens is once they’ve pushed out their warlord competitors, the ethnic and tribal factions and have established a monopoly on force created a pro-state, you don’t have an exit option anymore.

AMT: To what extent then do people blame business elites? They will hold them responsible for the rise of Islamist groups.

AISHA AHMAD: You know what’s remarkable about these business elites is that they’re pragmatists not ideologues. And so they’re pretty much going to vote with their dollar where they have the opportunity to do so, in such a way that helps advance their economic interests rather than their any particular ideology.

AMT: So that suggests that should another kind of thing come in, like when ISIS is routed or when something comes in that is seen as fair and not corrupt, the bulk of the elite population or the population that controls the commerce will be happy to go along with it. That it’s not such a big lift on that end.

AISHA AHMAD: Well actually I think that’s the great hope of the story in my book. And that is that because these elites are pragmatists, there’s a huge opportunity for peace building that we don’t currently think about. And so why is it business elites find themselves in bed with Islamists. It’s because the alternatives are really corrupt and are not efficient. We tend to think of corruption as sort of a side effect of political intervention. Okay well let’s try to put a Band-Aid on it as opposed to a fundamental factor in the conflict dynamic itself. And so if you have a heavily corrupt government that isn’t controlling its armed forces you are creating the conditions for jihadists to succeed. Whereas if we invest heavily in ensuring that governments are functioning, those are the sorts of interventions that can be made that have a huge effect. In fact we see it in Somalia. In the past year Somalia has been undergoing a remarkable resurgence. And that’s because President Farmajo, as his nickname is, has taken certain efforts. For example, paying the armed forces centrally and on time so that they don’t have to loot, so that you don’t have that kind of corruption.

AMT: If we’re talking about the revenue and supply and demand. With the rise of Islamist groups, we have to talk about kidnapping and hostage taking and the flow of human beings.

AISHA AHMAD: Absolutely.

AMT: But I want to ask something really specific because the Haqqani Network just released The Boyles, after holding them for five years. How does Haqqani fit into what you’re talking about?

AISHA AHMAD: This is a long standing Taliban affiliated jihadist group, and it is not only involved in kidnapping for ransom – which it absolutely is – and also kidnapping for political leverage, which is really what the Boyle family story was about. But also you know other types of illicit activities as well. And so you know they tax and participate in cross-border illicit activities. But absolutely we can see that the Haqqani network, which has been responsible for attacks across Afghanistan, is a group that the Pakistanis had sort of kept in a back pocket.

AMT: Well it’s interesting because the other takeaway I have from your book is that that no one operates in a vacuum. And in the case of Haqqani we see these Pakistani forces come in and free The Boyles, and there’s business and then there’s geopolitics and business and how they collide. And so there’s a geopolitical angle to this as well.

AISHA AHMAD: Absolutely. I mean we can’t look at the release of The Boyles in a geopolitical vacuum. I mean let’s take a look at how Donald Trump has been speaking about the Pakistanis leading up until this incident. And think about the fact that Pakistan has very long needed a U.S. alliance to maintain its balancing interests in the region. And so when Donald Trump turned around and said “well we’re going to be very tough on Pakistan, and Pakistan’s not you know reliable” I can guarantee to you that there were people in Islamabad who were taking that very seriously thinking about how such a shift could affect their geostrategic interests. Now that said President Trump has needed a win so badly that the Pakistanis saw this as an opportunity to give him one. So releasing Boyle, even under pressure, you know this was an opportunity to give Trump exactly what he needed. And the Pakistanis got what they wanted out of it, which is to say “we’re out of the dog house We’re back in the good books.”

AMT: So you are trying to help us understand that if you follow the money if you look at the black markets and the regular markets, we will understand more about how Islamists come to power.

AISHA AHMAD: Absolutely in fact what you need to understand from the ground level is that you know on the outside everybody’s talking about ideology and identity politics, on the ground level everyone is talking about money. And so the whole conflict dynamic, the rise of Islamist groups, the fragmentation of those groups is about the market dynamics at ground level. And that means that we need to understand, not only how corruption factors into those market dynamics, how when we show up with large sums of money to save a country that we’re actually fueling and creating new war economies, and that as smuggling communities that are well entrenched are evaluating their interests. They’re going to vote with their dollars too. And so understanding the war economy is crucial to understanding these sorts of conflict dynamics.

AMT: Thank you for your work. Thank you for taking us through this.

AISHA AHMAD: Thank you so much for having me on.

AMT: Aisha Ahmed. She’s an assistant professor of political science and the director of the Islam and global affairs Initiative at the monk school of Global Affairs at the U of T. Her book is called Jihad and Co.: Black Markets and Islamist Power. She joined me in our Toronto studio. That’s our program for today.