Faced with a cash shortage, the Islamic State has slashed salaries in its so-called caliphate, asked Raqqa residents to pay utility bills in black market American dollars, and is now releasing detainees for $500 each, reports the AP. The extremists who once bragged about minting their own currency are having a hard time meeting expenses, thanks to coalition airstrikes and other measures that have eroded millions from their finances since last fall. Though militants are still getting food baskets, the group has stopped providing smaller perks like free energy drinks and Snickers bars. Necessities are dwindling in its urban centers, leading to shortages and widespread inflation, according to exiles and those still suffering under its rule. Analysts say ISIS is turning to alternative funding streams, including in Libya.
In Raqqa, salaries have been halved since December, electricity is rationed, and prices for basics are spiraling out of reach, exiles say. "Any civil servant, from the courts to the schools, they cut their salary by 50%," says an activist. ISIS cited "exceptional circumstances," which include the dramatic drop in global oil prices, airstrikes that have targeted cash stores and oil infrastructure, supply line cuts, and crucially, the Iraqi government's decision to stop paying civil servants in territory controlled by the extremists; ISIS taxed salaries by up to 50%. "You can sense the frustration, their morale is down," one exile said of fighters. A researcher says the money problem may not prove "fatal" but suggests a "gradual decay and decline." President Obama's counterterrorism adviser is optimistic that military action will continue to have "demonstrable effects." (Read more Islamic State stories.)