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Chapter Five: Financing Terrorism. The Importance of Funding. The Importance of Funding. James Adams Another method for attacking terrorism was that governments needed to stop the flow of money

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Chapter Five: Financing Terrorism

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the importance of funding3
The Importance of Funding
  • James Adams
    • Another method for attacking terrorism was that governments needed to stop the flow of money
    • Financing of Terror: Terrorism changed between the 1960s and the 1980s and most Western Defense policies failed to account for the change
  • PLO
    • Established an economic wing called Samed in 1970
    • Samed developed into a rational business structure

The Importance of Funding

  • Provisional IRA- “Capone Discovery”
    • The Provisional IRA found it could raise vast sums of money by frightening shopkeepers and business owners into paying protection money
  • Counterterrorism should concentrate on cutting off the financial source of terrorism. Behind every large terrorist group lies a financial network
crime pays6
Crime Pays
  • Terrorist financing
    • Terrorist operations do not cost a lot of money, but the overall budget is quite high
    • Individual operations are inexpensive, but organizations are costly
  • The problem of the costs of terrorism
    • Terrorists find it difficult to participate in the economic system, so they are forced to join an underground economy
crime pays7
Crime Pays
  • The Hawala system
    • A Hawala dealer accepts a credit promise from a dealer in another country and delivers money to a client on the basis of the promise
    • If police forces can follow the money through an organization, they can eventually take an organization apart
crime pays8
Crime Pays
  • Other forms of terrorist funding
    • Smuggle stolen goods and contraband
    • Charities
    • Small markets
    • Counterfeiting and fraud
    • Extortion and protection rackets
a macroeconomic theory of the new terrorist economy10
A Macroeconomic Theory of the New Terrorist Economy
  • Globalism
    • Some countries prospered, but other countries grew weaker and poorer
    • Terrorism took hold in some of the areas left behind in the rush toward globalism, and this changed the nature of terrorist financing
a macroeconomic theory of the new terrorist economy11
A Macroeconomic Theory of the New Terrorist Economy
  • Loretta Napeoleoni
    • New economy of terrorism
      • Origins of the new economy of terrorism grew from the Cold War
      • The macroeconomic shift began at the end of World War II with the colonial revolts
    • Desire for autonomy led terrorists to join criminals in an underground economy
      • The Shining Path
      • The Popular Armed Forces of Colombia (FARC)
      • Militant Palestinians
      • The IRA
a macroeconomic theory of the new terrorist economy12
A Macroeconomic Theory of the New Terrorist Economy
  • The new terrorist economy and the ETA
    • Globalization has created pockets in the world where failed or weak states are left to govern with little economic and political power
    • Terrorists and criminal groups grow in such places
    • Illegitimate groups form a shell state, an organization that acts like a government in a place where the government is not strong enough to act
  • Modern terrorism and shell states
    • Modern terrorism is an international force supported by groups in shell states that continually change both their organizational structures and political goals to maintain income from an international underground economy
    • The most important objective is to raise funds
a macroeconomic theory of the new terrorist economy13
A Macroeconomic Theory of the New Terrorist Economy
  • Mario Ferrero
    • Modern radical Islamic groups use violent activity as a means of providing economic stability
a macroeconomic theory of the new terrorist economy14
A Macroeconomic Theory of the New Terrorist Economy
  • Macroeconomic theory and counterterrorism
    • Macroeconomic theory suggests that counterterrorism policies should be aimed at providing the world’s people with economic stability, opportunity, and participation in the mainstream economy
    • Economic policies to counter terrorism
      • supporting states in threat of failure
      • providing opportunities for people to participate and benefit from economic systems
      • eliminating underground economic networks
the narcoterrorism debate16
The Narcoterrorism Debate
  • Narcoterrorism
    • The term narcoterrorism refers to terrorists using either terrorist tactics to support drug operations or drug trade profits to finance terrorism
    • Rachel Ehrenfeld championed the idea of narcoterrorism
    • The narcotics trade is one of terrorist groups primary source of money
the narcoterrorism debate17
The Narcoterrorism Debate
  • Steven Casteel
    • An executive with the DEA, he told a U.S. senate committee that terrorism and the drug trade are intertwined
    • He believes that globalization has intensified the relationship between terrorism and drugs
the narcoterrorism debate18
The Narcoterrorism Debate
  • Joshua Kransa
    • If people are willing to expand the definition of national security beyond the framework of military defense, drugs pose a security problem
    • The drug trade threatens political and economic stability while disrupting society
narcoterrorism another view20
Narcoterrorism: Another View
  • Reasons for rejecting narcoterrorism
    • Selling drugs is only one method, and the drug problem is not caused by terrorism
    • The term “narcoterrorism” is an attempt to take political advantage of the fear of terrorism
    • Combining the drug problem with terrorism confuses two different issues
narcoterrorism another view21
Narcoterrorism: Another View
  • David Kaplan
    • Charities are responsible for the bulk of terrorist financing
  • Pierre-Arnaud Chouvy
    • Narcoterrorism is a convenient term for appealing to public emotions and giving the police more power
  • Civil libertarians
    • If governments link drugs with terrorism, they can reinvent the meaning of crime. Drug dealers will become terrorists, and a frightened public will grant the government expanded powers to combat drugs