Financial markets and their importance cannot be emphasized enough. The world nearly came to its knees in the midst the global financial crisis. The world is still as exposed as it has always been to economic calamities that can spread like wildfire. Finance is an important discipline, field of study, and plays a foundational role in our society and how our economies work. Financial contributions to charities and illegal activities such as the black market play a huge role in fueling terror groups. Show me the money; and you might find the primary terror financiers.
East Asia is to be the focus of strategic geopolitical efforts in the coming century. But, that’s a physical place. It’s cyber warfare and financial markets that could affect the entire world. We learn painstakingly that financial markets are the bedrock of the world. We’ve built our global society and interwoven every nation with ease.: a world financial system. No one place can be pointed out on the map, but a flow of money and resources can do the most damage. Acts of terror and rogue elements that create instability are funded and encouraged by whatever means and laundering mechanisms. Sometimes that money’s ownership can be as difficult to trace as the flow of money.
That financial threat and the financial backing of threatening organizations will be the bane of the future. Bitcoin, online security, encryption, are all quickly becoming more sophisticated. Terrorism is fueling the need to increase the safety of everyone. Because the government is becoming more sophisticated as terrorists and rogue actors, use cyber warfare, and ordinary citizens wish to protect themselves from intrusive and all powerful governments. There’s a strange synergy where both the law-abiding and the criminal will benefit.
A global financial system exists. But, little is known about it except among insiders and financial professionals. Even among many who work in finance, an enormous industry, they do not necessarily understand the global marketplace and the constructs that connect them all. There’s plenty of alternative assets and investing that sprawls the globe. It’s just the algorithms and derivative calculations that fuel the global economy.
Little is known about terrorism financing either. Most suspect it is done via laundering of assets, the same way crime capers were depicted in older film-noir films. It could be a variety of things from fine art, human trafficking, drugs, rugs, collectibles, to bitcoin and other deep web financial exchanges. It’s a niche mechanism and one that’s obfuscated by design. It would take a monumental effort beyond just that of the FBI. It could be an undercurrent to the recent opening of Counter Terror offices at the UN. Everyone is a target of terrorism, and every nation is undermined by global conspiratorial criminal activity.
According to the Council on Foreign Relations here is where Terrorists receive much of their funding:
- “Charities. Donations were once the largest source of terrorist funding, coming mostly from charities and wealthy individuals. For years, individuals and charities based in Saudi Arabia were the most important source of funds for al-Qaeda, according to a 2002 CFR Task Force Report. A 2004 update to that report shows Saudi officials have taken steps to disrupt terrorist financing in their country, yet charities continue to play a role in the sponsorship of terrorist groups. “In the Islamic world, there are tens of thousands of charities,” says Robert O. Collins, coauthor of the new book Alms for Jihad. While as few as a hundred may sponsor terrorism, “these are some of the wealthiest charities,” Collins says. Experts say some of these organizations raise funds with the express intent of supporting terrorists; others seek to promote Islam through legitimate programs, but can be co-opted by jihadists who then use the funds to promote their radical cause.
- Illegal Activities. Loretta Napoleoni, an expert on terrorist financing, says the largest source of terrorists’ income is the illicit drug trade. Many terrorist groups have supported themselves through other illegal commerce as well. In his book, Illicit, Moisés Naím explains that the terrorists behind the 1993 World Trade Center bombing raised money by selling counterfeit T-shirts on New York City’s Broadway, and the perpetrators of the 2004 Madrid train bombings sold counterfeit CDs and trafficked drugs to support their activities. Hezbollah, the Irish Republican Army, and the Basque ETA are also believed to have generated revenue through counterfeiting scams. In 2002, federal agents broke up a methamphetamine ring in a dozen U.S. cities that, according to officials, funneled proceeds to Hezbollah. The Revolutionary Armed Forces of Colombia (FARC) has long used the cocaine trade to finance its operations. Afghanistan’s flourishing poppy crops, which the United Nations says are responsible for as much as 86 percent of the world opium supply, are widely believed to be a significant source of terrorist funding. Al-Qaeda reportedly profited from the Afghan poppy trade before fleeing the country when the Taliban-led government was ousted in 2001.
- Front Companies. Many terrorist organizations attempt to operate legitimate businesses, which generate their profits and can also be used as a front for money laundering. Ties to terrorism have been found amid the trade of livestock, fish, and leather. Businesses involved in agriculture and construction have also been found to support terrorism. In 2001, the New York Times reported that Osama bin Laden owned and operated a string of retail honey shops throughout the Middle East and Pakistan. In addition to generating revenue, the honey was used to conceal shipments of money and weapons.”
Money is the most important commodity and ultimately is the deciding factor for most decisions in most of our lives. The same is true for the upper echelon to the foot soldiers of terror organizations. As soon as we have a better grasp of the role money plays with terror and where it comes from, who benefits, and the long term goals we’ll understand what the Global War on Terror is really fighting.
Featured image courtesy of The Express Tribune.