Kidnapping: Why Al Qaeda Needs Donations More Than Ransoms

Yesterday, the Foreign Policy Research Institute provided me another opportunity to post on their blog Geopoliticus.  For this post, I did an extended discussion and update to a series of posts I did with Alex Thurston several years back regarding AQIM’s use of kidnapping in the Sahel.  For the old discussions of AQIM & others’ kidnapping operations see these posts and Alex’s excellent insights at these posts –  #1, #2, #3, #4 and #5.

In this new post, entitled “Why al Qaeda Needs Donations More Than Ransoms,” I discuss the trade offs and disadvantages for al Qaeda affiliates such as AQIM that are dependent on illicit funding schemes, namely kidnapping, to sustain their operations.  I conclude with the opinion that al Qaeda needs donations more than ransoms if they intend to orchestrate a comeback.  Here’s an excerpt of the post below and for the entire post, visit this link at FPRI.

“On the surface, kidnapping and smuggling appears an ideal financial engine for terror groups like al Qaeda and its affiliates. This assertion, however, ignores the inherent challenges encountered when any organization, whether terrorist group to criminal enterprise, undertakes illicit funding schemes.  Kidnapping and ransom operations introduce significant transaction costs which significantly devalue the gross sum of revenues.  Kidnapping operations create a series of internal costs for terror groups:

  • Networks Of Intermediaries -  Negotiations and payments for kidnapping operations require layers of middlemen with each network extracting a percentage of the overall take.

  • Transaction Time - The time between hostage taking and ransom payments can be significant requiring the terror group to maintain a solid reserve of capital to sustain its operations between transactions.  Essentially, time is money, and in the case of kidnapping operations, a cost to the terror group.

  • Hostage Deaths - The trauma of kidnapping and the harsh environments in which terrorist groups operate often result in the death of hostages.  The death of a hostage hurts the terror group directly in terms of loss revenues. But, even more damage occurs indirectly as the hostage death erodes trust for future ransom negotiations.

  • Infighting - In any business, transactions often lead to conflict.  This is particularly true in illicit industries where trust is constantly being questioned.  Kidnapping negotiations naturally generate friction between intermediaries and when negotiations become protracted parties may turn to open conflict.

  • Declines in Hostage Availability - As groups like AQIM continue to kidnap hostages, the availability of hostages naturally declines requiring the terror group to operate at longer distances to acquire captives.  This distance imposes significant logistical costs.

  • Undermines Terror Group’s Ideology - Inevitably, in illicit schemes and even licit enterprises, business gets messy and the terror group must make choices with regards to sustaining its resource flow.  Often times, these choices result in alienation of a terror group’s local base of popular support or hypocritical conflicts of interest between the terror group’s deeds and its words.  The recent accusations of Omar Hammami, an American foreign fighter who has fallen out of favor with al Shabaab, demonstrate how al Shabaab’s turning a blind eye to Qat distribution in Somalia for the purpose of taxation has called into question the group’s committment to al Qaeda’s ideology and Sharia law.

  • Opportunity Costs - When al Qaeda is dedicating more time, manpower and resources to illicit fund generation, they are spending less time recruiting and training new operatives, planning operations and executing attacks.”

Also, @el_Grillo1 made a point which I overlooked in the FPRI post.  Another detractor of illicit revenue generation for al Qaeda groups is the scrutiny brought on terrorists by law enforcement and the military when they conduct illegal activities like kidnapping and drug smuggling. An important point that I overlooked in the FPRI post.  Here is a quick chart I put together showing the relative value of illicit funds to donor provided dollars.

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One comment

  1. I was wondering… to what extent (if any) do you and others of your ilk believe in American exceptionalism?

    You clearly believe that the United States government has the right to target the citizens and residents of other countries with whom the United States is not at war. The grounds are, as I understand, that they have information (or so they claim) that said individuals are likely (how likely? I don’t know) to attack the United States somehow at some point.

    Here is where exceptionalism comes in. If you do not believe in American exceptionalism, then you believe that the United States is one State exercising its right to self defense as it sees fit and any other sovereign State has a similar right to defend itself in a similar manner. In that case, it seems to me, on logical grounds, that you should accept that a foreign government could kill people in the U.S. based on the claim that said individuals were going, at some point, to attack their country? If so, this leads to certain questions:

    1. Would the foreign power need to provide proof in advance regarding the targeted individuals?

    2. Would you accept “collateral damage”, that innocent Americans are killed by these strikes? If so, what level of “collateral damage” would you consider reasonable?

    Now, of course, naturally, if you, as an American, cannot imagine accepting that a foreign power targets people within the U.S. (their citizens, our citizens, the citizens of a third country… not too important IMO…) then, just on basic common sense principles, why on earth would you expect people in other countries to accept that the United States targets people within their countries for death?

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