Joint Special Operations University

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JOINT SPECIAL OPERATIONS UNIVERSITY

In this monograph, Major Riley Post and Dr. Jeffrey Peterson offer 

a compelling look into economic activities and influence in the 

context of unconventional warfare (UW). The value of this monograph lies in the creation of a framework that provides a structured approach for UW practitioners to employ as they assess and 

analyze economic factors that influence and support insurgency 

movements. This framework offers a way to simplify the varied and 

complex economic activities required to support equally complex 

resistance operations. This monograph provides examples of tactical, economic opportunities that support operational and strategic 

objectives. As a vignette, the authors evaluate the rise and potential vulnerabilities of the Islamic State of Iraq and the Levant. This 

monograph concludes with recommendations to enhance training 

for Special Operations Forces leaders and operators in the application of economic factors in UW.

ISBN 978-1-941715-11-6

Unconventional Economics:

Operational Economics 

in Unconventional Warfare

Major Riley Post and Jeffrey D. Peterson, Ph.D.

JSOU Report 16-5

JSOU Report 16-5 Unconventional Economics Post and Peterson 
Joint Special Operations University

Brian A. Maher, Ed.D., SES, President

Kenneth H. Poole, Ed.D., Director, Center for Special Operations Studies and Research

Robert Nalepa, Lt. Col., U.S. Air Force, Ret., Editor in Chief

Will Irwin, MMAS, Lieutenant Colonel, U.S. Army, Ret.; 

Peter McCabe, Ph.D., Political Science, Colonel, U.S. Air Force, Ret.; 

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Anna-Marie Wyant, M.A., English, JSOU Press Editor 

Frederick Zimmerman, Master Sergeant, U.S. Marine Corps, Ret., JSOU Press Editor

Editorial Advisory Board

Roby C. Barrett

Ph.D., Middle Eastern & South Asian History 

Public Policy Center Middle East Institute and 

JSOU Senior Fellow

James J.F. Forest 

Ph.D., Higher Education Administration

Associate Professor, School of Criminology and 

Justice Studies, University of Massachusetts 

Lowell and JSOU Senior Fellow

Mario Forestier

Chief Warrant Officer, U.S. Army, Ret.

Director, Joint Special Operations Command 

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Ph.D., History, Hoover Institution 

Stanford University and JSOU Senior Fellow

Bernd Horn

Colonel, Canadian Dept. of National Defence 

Ph.D., War Studies

Director, CANSOFCOM Professional 

Development Centre

Russell D. Howard

Brigadier General, U.S. Army, Ret.

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James Kiras

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Studies, Air University and JSOU Associate Fellow

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JSOU Senior Fellow

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Ph.D., Political Science

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Sandia National Laboratories 

and JSOU Associate Fellow 

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Ph.D., Cultural Anthropology

Galisteo Consulting Group 

and JSOU Senior Fellow 

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Ph.D., History 

JSOU Senior Fellow

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and the Center for Special Operations Studies and Research

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JSOU Report 16-5

The JSOU Press

MacDill Air Force Base, Florida

2016

Unconventional Economics: 

Operational Economics in 

Unconventional Warfare

Major Riley J. Post

Colonel (Ret.) Jeffrey D. Peterson, Ph.D.
This monograph and other JSOU publications can be found at https://jsou.

libguides.com/jsoupublications. Click on Publications. Comments about this 

publication are invited and should be forwarded to the Director of the Center 

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*******

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This work was cleared for public release; distribution is unlimited.

Printed in March 2016.

ISBN 978-1-941715-11-6
The views expressed in this publication are entirely those of the 

authors and do not necessarily reflect the views, policy, or position 

of the United States Government, Department of Defense, United 

States Special Operations Command, or the Joint Special Operations 

University.

Authors are granted academic freedom provided their work does not 

disclose classified information, jeopardize operations security, or 

misrepresent official U.S. policy. Such academic freedom empowers 

authors to offer new and sometimes controversial perspectives in the 

interest of furthering debate on key issues.
Recent Publications of the JSOU Press

2016 Special Operations Essays, March 2016

The War Within: A Look Inside al-Qaeda’s Undoing, February 2016, Jarret Brachman

Improving the Sustainment of SOF Distributed Operations in Access-Denied 

Environments, January 2016, Robert Haddick

SOF Role in Combating Transnational Crime, January 2016

The Collapse of Iraq and Syria: The End of the Colonial Construct in the 

Greater Levant, December 2015, Roby C. Barrett

Tactical Operations for Strategic Effect: The Challenge of Currency Conversion, 

November 2015, Colin S. Gray

Countering Violent Extremism in Mali, November 2015, Mark Moyar

The 2005 Iraqi Sunni Awakening: The Role of the Desert Protectors Program, 

October 2015, William Knarr

2016 Special Operations Research Topics

Saudi Arabia: Modernity, Stability, and the Twenty-First Century Monarchy, 

June 2015, Roby C. Barrett

Special Operations Forces Reference Manual, Fourth Edition, 2015

On the cover. A crowd amasses during a demonstration in Cairo, Egypt. 

Source: Newscom.

Back cover. A Special Forces soldier engages with Afghan children waiting to be seen by a Special Forces medic during a medical and veterinarian 

engagement in the Gereshk Valley, Helmand province, Afghanistan. U.S. 

Army photo by Sergeant Debra Richardson.
v

Contents

Foreword .....................................................................................vii

About the Authors .........................................................................ix

Introduction .................................................................................. 1

1. The Economics of Resistance: Motivation and Sustainment ....... 5

2. Operational Planning Framework ........................................... 11

3. Critical Economic Requirements ............................................. 19

4. Applying the Framework to the Islamic State ........................... 53

5. Recommendations for Educating SOF ..................................... 73

Appendix A: Acronym List .......................................................... 77

Endnotes ..................................................................................... 79

vii

Foreword 

In Unconventional Economics: Operational Economics in Unconventional 

Warfare, Major Riley Post and retired colonel Dr. Jeffrey Peterson offer 

a compelling look into economic activities and influence in the context of 

unconventional warfare (UW). The value of this monograph lies in the creation of a framework that provides a structured approach for UW practitioners to employ as they assess and analyze economic factors that influence and 

support insurgency movements. With this framework, the UW practitioner 

is offered a way to simplify the varied and complex economic activities that 

are required to support equally complex resistance operations.

This framework evaluates economic activities in a complex environment—

not simply as an isolated variable. By recognizing that these activities and 

their effects on resistance movements interact in an environmental mosaic, 

one that is impacted by political, military, and information activities, the 

authors present a powerful critical thinking tool for the SOF operator.

Major Post and Dr. Peterson begin their monograph by explaining how the 

economic theory of resistance is linked to the tactical situation and actions 

on the ground. There are economic motivations for a resistance, what is in it 

for the individual or organization, as well as the need to finance the activities 

that support operations and sustain the resistance. Center of gravity analysis 

is then woven into their narrative to lay the foundation of the operational 

planning framework. The framework is built around five factors, critical 

economic requirements, for the resistance movement and existing government. These factors explain the competitive environment as both sides of the 

resistance movement must battle to gain popular support and secure revenue. 

The authors then introduce a modified ‘value chain’ model. That model is used 

to explain the tactical vulnerabilities of the critical economic requirements.

This monograph provides examples of tactical, economic opportunities 

that support operational and strategic objectives. As a vignette, the authors 

evaluate, through the lens of operational economics, the rise and potential 

vulnerabilities of the Islamic State of Iraq and the Levant. This monograph 

concludes with recommendations to enhance training for Special Operations 

Forces (SOF) leaders and operators in the application of economic factors in 

UW. 
viii

This research project was inspired by a topic proposed by former 

USSOCOM Deputy Commander Lieutenant General John Mulholland. The 

topic, titled Examining operational economics in unconventional warfare and 

irregular environments, was proposed with the goal of creating and enhancing SOF operators understanding of how operational economics impact both 

positively and negatively UW campaign success.

Kenneth H. Poole, Ed.D.

Director, Center for Special Operations Studies and Research
ix

About the Authors 

Major Riley J. Post, U.S. Army, is the Chief of Strategic Analysis for 

the Special Operations Command–Central (SOCCENT). Originally 

commissioned as an infantry officer in 2001, the majority of his operational 

experience has been in the special operations community. In that capacity, 

Major Post’s assignments have ranged from multiple 

combat deployments as a Special Forces Operational 

Detachment–Alpha commander to his current assignment as an operations research and systems analyst 

at SOCCENT. Between those experiences, Major Post 

served as an assistant professor of economics at the 

United States Military Academy at West Point. Both 

his teaching and research at West Point focused on 

economic and social drivers of conflict in Africa and 

the Middle East. He has published on topics such as 

social mobilization in Africa and the impact of food insecurity on conflict. 

This monograph was researched and written during his tenure at West Point 

prior to his assignment at SOCCENT in August 2015. Major Post holds a 

Bachelor of Science from West Point and Master of Science degrees in Economic History and Social Policy from the University of Oxford, England.

Colonel (ret.) Jeffrey D. Peterson, U.S. Army, is the Chair for the Study 

of Officership at the United States Military Academy, West Point, New 

York. Commissioned in 1987 as an armor officer, his operational career 

included command of 1-14 Cavalry, 3 Stryker Brigade 

Combat Team during a 15 month deployment to Iraq 

in 2006. The squadron’s use of economic resources 

to stabilize the local area sparked his interest in the 

study of how economic resources can support national 

security objectives at the tactical and operational level. 

Following his operational assignments, he served as 

an academy professor of economics at West Point 

from 2008 until his retirement in 2015. As an academy 
x

professor, he spoke at several conferences and taught courses on the topic 

of post-conflict economic development. He continues to study post-conflict 

economic development as he contributes to the education of officers who will 

conduct future stabilization operations. Colonel Peterson holds a Bachelor of 

Science degree from West Point, an MBA from the Massachusetts Institute 

of Technology Sloan School of Management, and a Ph.D. from the RAND 

Graduate School.
1

Peterson and Post: Unconventional Economics

Introduction 

An unconventional warrior must be a renaissance man. On any given 

day, he could provide veterinary services for livestock or terminal guidance for laser-guided munitions. His ability to understand and navigate 

social, political, and economic terrain is as valuable as his land navigation 

skills. President John F. Kennedy highlighted this reality decades ago when 

he affirmed the need for a special force capable of conducting unconventional 

warfare (UW). 

The enemy uses economic and political warfare, propaganda and 

naked military aggression in an endless combination ... Our officers 

and men must understand and combine the political, economic, 

and civil actions with skilled military efforts. – President John F. 

Kennedy, 19621 

Yet, despite this and many other calls to understand and use economic 

activities in UW, the U.S. military lacks a coherent framework for doing 

so. This monograph attempts to fill that gap by developing a framework 

that provides UW practitioners a structured approach for considering the 

economic activities that influence a movement’s popular support and the 

ability to finance its activities. 

While the military lacks a framework for incorporating economic effects 

in supporting an insurgency, the same cannot be said for countering an 

insurgency.2 Recent counterinsurgency experiences highlighted the connection between conflict and economics. As a result, current Army doctrine 

for stabilization and counterinsurgency operations repeatedly references 

the importance of economic power—usually in conjunction with political, 

informational, and other sources of power. Additionally, in recognition of the 

importance of prosperity in achieving a stable society, economic development 

experts have published countless handbooks for achieving economic development during stabilization operations. Unfortunately, military doctrine 

lacks the specificity necessary for implementation, and development expert 

handbooks lack contextual understanding of military operations. Even so, 

these efforts indicate a willingness to incorporate economic activities in 
2

JSOU Report 16-5

pursuit of military objectives to defeat a resistance movement and stabilize 

a government. 

But what if our national security objective is the destabilization of a 

hostile government? What if the objective was to create opportunities for 

changing government behavior or persuading the population to overthrow 

the government to free the oppressed? In other words, what if our forces are 

required to assume the role of supporting a resistance movement or insurgency? Few have considered how we might combine economic, military, 

and information operations to undermine, rather than reinforce, an existing government. Joint doctrine establishes that UW practitioners should be 

prepared to do just that:

Unconventional Warfare includes activities to enable a resistance to 

coerce, disrupt, or overthrow a government or occupying power by 

operating through or with an underground, auxiliary, and guerilla 

force in a denied area.3

If, as that document goes on to say, governments require some minimum 

amount of military, economic, psychological, and political power to maintain control, we should be developing multidisciplinary methodologies for 

undermining those bases of power.4 Economic activities are part of this effort 

and the focus of this paper. 

In some respects, U.S. adversaries, both modern and historical, could be 

our greatest teachers. In not only Iraq and Afghanistan, but also Ukraine, 

Yemen, the Philippines, and other lesser-known conflicts, resistance forces 

succeeded or failed based largely on their ability to destabilize existing governments by using economic activities. The authors will demonstrate that 

resistance movements have historically succeeded to the extent that they 

outmaneuvered and outperformed the government in two critical areas: winning the support of the population and generating finance for an adequate 

security force capable of establishing internal control. 

This framework does not consider economic activities in isolation. The 

authors recognize that resistance movements operate within an environment simultaneously impacted by political, military, and information activities. Much of the complexity in UW originates from the interaction and 

combination of all sources of power. Economic activities influence and are 

influenced by other government and resistance activities. As a result, the 

UW practitioner must always consider economic activities as one aspect of 
3

Peterson and Post: Unconventional Economics

supporting a resistance. Our challenge is to simplify the economic terrain 

with a planning framework while considering the complexity of resistance 

operations. The authors also recognize that economic activities will work in 

concert with military and information activities to achieve the desired effect 

on public support or raising revenue. In no way do the authors assert that 

building more wells or providing more jobs alone will convince the population to support a movement or lay down their weapons; economic activities 

are simply one important facet of a multifaceted problem that defies simple 

solutions. However, the authors also assert that economics is an important 

facet of UW that has not been fully appreciated or utilized effectively in 

UW or stabilization operations—hence, the motivation for this framework. 

The authors begin connecting the economic theory of resistance to tactical actions on the ground by highlighting the economic motivations for resistance (grievance and greed), as well as the economic requirements (finance) 

to sustain a resistance. Building on this theoretical foundation, a center 

of gravity analysis is then used to build a novel UW operational planning 

framework. The framework focuses on economic factors and identifies five 

critical economic requirements for the resistance movement and existing 

government as they compete for popular support and revenue. The critical 

economic requirements are the ‘economic terrain’ that is neutral to both sides 

of an unconventional conflict. In the competition between the resistance 

movement and the established government, the side that best understands 

how to exploit and manipulate the components of these critical economic 

requirements will most effectively gain the support of the people and sustain 

a fighting force capable of monopolizing violence. A modified ‘value chain’ 

model will then be used to help readers understand the tactical vulnerabilities of these critical economic requirements. The identified vulnerabilities 

provide opportunities for the resistance movement to attack or defend the 

centers of gravity. Based on these vulnerabilities, this monograph will provide examples of tactical, economic opportunities that support operational 

and strategic objectives. The authors then attempt to understand the rise 

and potential undoing of the Islamic State of Iraq and the Levant (ISIL) 

through this framework. This monograph concludes with recommendations 

for training Special Operations Forces (SOF) leaders in the application of 

economics in UW. 

5

Peterson and Post: Unconventional Economics

1. The Economics of Resistance: 

Motivation and Sustainment 

To employ the economic tools available to UW practitioners, we must 

first understand the economic currents that flow through any resistance 

movement. Only once we appreciate the economic drivers of resistance can 

we identify opportunities for entry of U.S. influence via UW. Broadly, we 

might think of these drivers in two categories: those that motivate resistance and those that sustain it. Motivation generally takes the form of either 

grievance resulting from relative deprivation, or greed caused by available 

profits from resistance. Often times, both greed and grievance interact to 

motivate rebellion—what one rebel views as a political grievance to be rectified another may view as an opportunity to enrich himself personally. Often, 

economic drivers of resistance connect to factors that sustain the movement. 

For example, tension over revenue sharing on diamond mines significantly 

increased conflict in the Democratic Republic of Congo. Those same mines 

later provided armed insurgents the funding necessary to continue fighting 

the Mobuto regime. 

Economics of Motivation in Resistance Movements

All societies face the basic economic problem of allocating scarce resources. 

Both individuals and societies face the reality of unlimited desires constrained by limited means. Communal groups, whether families, tribes, or 

nations, constantly allocate those scarce resources according to some set 

of rules. This is true for any form of government, whether a democracy or 

dictatorship—the difference is only in what the rules are, not if they exist. 

Almost inevitably, the existing rules will create winners and losers by giving 

an advantage to one sub-group of a governed population over another—

land owner over worker, Sunni over Shi’a, male over female. Economics and 

politics are, as the economist Friedrich Hayek noted, “the choice between 

conflicting or competing ends—different needs for different people.”5 In most 

cases, these differences in access to resources lead to tension that is resolved 

within the existing system or are minor enough that they do not warrant 

action outside of normal political channels. Importantly, though, this is 
6

JSOU Report 16-5

not always the case. Sometimes, the resulting advantage of one group over 

another creates a grievance large enough to motivate organized resistance 

and, potentially, political violence. Understanding the nature and degree 

of these economic advantages of one group over another can help the UW 

planner identify government vulnerabilities that can be exploited using economic activities.

Such cases that create winners and losers illustrate what academics would 

term grievance-based theories of conflict. Students of insurgency and counterinsurgency are, perhaps, most familiar with these theories. Resistance 

leaders from William Wallace to Abu Bakr al Baghdadi have championed 

real or perceived grievance with the existing government to justify and 

motivate their followers. Similarly, academics across time have attempted 

to identify the importance of grievances in both the initiation and sustainment of insurrection. Ted Gurr captured these thoughts in his 1970 book 

Why Men Rebel, positing relative deprivation as the primary driver of rebellion. Gurr articulated relative deprivation as the tension that develops from 

a discrepancy between what a man believes ought to be and what is.6 In his 

construct, the intensity and scope of relative deprivation drives the propensity for collective action or violence. The implications for the economics of 

resistance, and therefore UW, are significant. Resistant leaders, potentially 

in partnership with American UW efforts, can influence both elements of 

the population’s relative deprivation function. They might, on one hand, take 

actions to draw attention to the current economic plight of the people due 

to government ineptitude, while at the same time agitate the population by 

highlighting the largesse of wealthy government supporters. Thus, grievance 

is a byproduct of both real and perceived economic conditions.

Grievance-based theories of conflict underpin both historical and modern 

understandings of resistance movements. The 18th century counterinsurgency theorist Santa Cruz de Marcendao eloquently stated: “A state rarely 

rises up without the fault of its governors.”7 In fact, Santa Cruz’s advocacy 

for winning the “heart and love” of the population resonates closely with the 

familiar ‘hearts and minds’ construct in recent counterinsurgency thinking. 

More modern foundational works such as David Galula’s Counterinsurgency 

Warfare (1964) and Roger Trinquier’s Modern Warfare (1966) also emphasize 

the importance of legitimizing the existing government through alleviation of popular grievance. Since current U.S. counterinsurgency doctrine 

is largely based on these and similar works, it, not surprisingly, assumes 
7

Peterson and Post: Unconventional Economics

grievance as the fundamental motivator of insurrection as well. The Army’s 

current field manual on insurgencies and counterinsurgencies, Field Manual 

(FM) 3-24, states this assumption explicitly: “The root causes of an insurgency are real or perceived grievances that insurgents use to mobilize a 

population in support of an insurgency. Insurgents use these grievances to 

fuel an insurgency.”8

 Similarly, Ted Gurr could have penned the following 

excerpt from FM 3-24: 

Insurgents can use a gap between a population’s expectations and 

the government’s capability to meet those expectations as a root 

cause. The larger the gap, the greater the population’s perceived or 

real sense of deprivation. This allows for the development of a narrative in which the insurgents promise to close the gap.9

This understanding of resistance motivation has molded recent U.S. 

counterinsurgency efforts. Growing emphasis on supporting local development projects assumes increased economic opportunity legitimizes the 

government and undermines support for the insurgency. It also assumes a 

government that desires to rule legitimately. 

Until recently, grievance-based explanations of insurrection held center 

stage in the academic literature. Every resistance seemed based on some deep 

seated injustice against which its members heroically fought. However, recent 

research in the fields of economics, political science, and sociology highlights 

additional and potentially more powerful motivations for insurrection. An 

initial lone voice, economist Herschel Grossman postulated that insurgencies 

are less about ideology and grievances and more about economic returns to 

the insurgent.10 In Grossman’s model of insurrections, rebellion occurs not 

where collective grievances are greatest, but rather where opportunities for 

profit are most likely realized. Jack Hirshleifer called this the “Machiavelli 

Theorem” where no one will pass up an opportunity to profit by exploiting 

another party.11

In 2004, Paul Collier and Anke Hoeffler juxtaposed these competing 

theories and cast the debate as one between grievance and greed. In their 

seminal paper Greed and Grievance in Civil War, Collier and Hoeffler quantitatively demonstrated that insurrection historically occurred most often 

in areas with the greatest exportable natural resources rather than where 

grievance dominated.12 In other words, the most fighting occurred where 

there was the most potential for economic profit. In later work Collier and 
8

JSOU Report 16-5

his associates recognized the importance of grievance, but they asserted that 

it mattered for propaganda reasons rather than true motivation. Grievance 

makes for much better strategic communication to the population and the 

international community than does greed.13

Combining both greed and grievance, James Fearon and others have 

argued for a model of insurgencies that appreciate the economic principle of 

opportunity costs. Whereas Collier’s work emphasized the economic benefits 

of resistance, opportunity cost models examine the cost of participation 

in conflict. In general terms, an opportunity cost is the value of the next 

best opportunity given up by pursuing current activities. For a potential 

insurgent, the opportunity cost of joining the fight is the best option the he 

or she forgoes. Thus, conflict increases when either the potential benefit of 

fighting increases or the cost of not fighting decreases. Local factors such as 

the labor market, the probability of injury or death, and public perception of 

the insurgency heavily affect the opportunity cost of resistance. If individuals are unemployed, poor, sick, uneducated, and hungry, they are not losing 

much by joining the resistance. 

The government’s security force capabilities also impact the opportunity 

cost of resistance. In their influential 2003 paper, Ethnicity, Insurgency, and 

Civil War, James Fearon and David Laitin discovered that opportunity for 

rebellion was more important than the ethnic fractionalization in a region. 

Most relevantly, they found financially insolvent states and their broken 

military and policing functions offered little deterrence to would-be recruits 

for the resistance.14 Thus, as we look for vulnerabilities to exploit in UW, we 

must consider the financial viability of the hostile state, particularly as it 

pertains to its ability to project force. 

Although not explicitly cited in current U.S. doctrine, wartime commanders intuitively understand the opportunity cost theory of insurgency. 

We have used kinetic strikes to deter potential recruits while simultaneously 

attempting to stimulate the labor market for military-aged males. Both methods increase the opportunity cost of joining the fight. 

Economics of Sustaining Resistance Movements 

Motivation is necessary, but it will not sustain a resistance movement. Movements generally must have both motivation and financial support—particularly those movements that rise to armed conflict. In the early stages of a 
9

Peterson and Post: Unconventional Economics

resistance movement, material requirements may be minimal, and the ability 

to operate underground is relatively uncontested by the local government. 

However, as the movement progresses from a strictly political enterprise 

to one involving armed conflict, space to operate and the finances to do so 

become increasingly important. For this paper, the focus is primarily on the 

phases of an insurgency that require significant material support, although 

the same principles apply to early stages as well.

The literature on sustaining an insurrection mainly focuses on financial 

opportunity and security opportunity. Generally, insurgencies rely on three 

sources of funding: internal support from the population (voluntary or involuntary), revenue from assets or resources accumulated prior to or during 

the fighting, and external funding. In the early days of a resistance movement, any of these sources may provide sufficient funding. As the movement 

grows and develops into an armed conflict, most insurgencies cannot exist 

solely on the support of the population, particularly since most insurgences 

develop in poor regions. In areas with easily looted resources, such as diamonds, timber, or even bootleg oil, groups may not need external support. 

However, in most cases, funding from a sponsor state, non-state actor, or 

private foreign individuals will be necessary at some point. As discussed in 

later sections, each of these funding sources offer points of entry for UW 

practitioners to support an insurgency. 

Resistance, Economics, and Dynamic Systems

Before presenting the operational planning framework, the authors must 

highlight the complexity of a dynamic UW environment. Thus far, the 

authors have focused on the economic inputs of insurrection, both in the 

form of motivation and sustainment. This approach, however, potentially 

obscures the endogenous nature of economics and resistance. Once a resistance movement is underway, the movement itself creates outputs that move 

society out of its previous equilibrium. In this way, outcomes from one activity can become new inputs for the next. As David Stoll points out, “violence 

by both sides can easily become the most important factor in recruitment. 

People may join the revolutionary movement less because they share its 

ideals than to save their lives ...”15 One of the architects of modern counterinsurgency doctrine, David Kilcullen, identifies insurgencies as organic 

systems that are complex and adaptive.16 They are part of an ecosystem that 
10

JSOU Report 16-5

consumes inputs from other systems and produces outputs that can impact 

those around them. As such, UW practitioners must always conceptualize the economics of resistance not in linear terms but rather systems with 

feedback mechanisms. Just as supply and demand simultaneously determine 

market prices, outcomes in UW cannot be set a priori but will reflect the 

sum total of actions and reactions of all entities in the theater ecosystem. 
11

Peterson and Post: Unconventional Economics

2. Operational Planning Framework 

By their nature, both resistance movements and the economic environment in which they operate are complex and dynamic systems. This 

presents the UW planner with significant operational design challenges, particularly in identifying centers of gravity. In conventional warfare, a center 

of gravity, or system’s source of power to act, may be clearly defined and is 

typically a military unit.17 In irregular warfare, centers of gravity are usually 

more ambiguous but no less important. Their identification is foundational 

to operational success. This section will provide the UW operational planner 

with a framework that identifies two centers of gravity, highlights five critical economic requirements on which they rely, and provides a value chain 

model to identify tactical opportunities for economic activities.

For the operational planner, we start with the government’s objective 

of maintaining control over the population and terrain by establishing a 

monopoly over lethal force. As Max Weber stated in his seminal work Politics as a Vocation, the defining feature of a modern state is its ability to 

monopolize violence within its borders.18 Given this definition of a state, 

the existing government and the resistance movement are competing for 

monopoly power in the ‘violence market.’ If the UW objective is overthrow, 

this competition is existential in nature and the winner takes all. However, 

this need not be the case when the object is coercion or disruption. In those 

instances, demonstrating the ability to project force (military or otherwise) 

in limited areas or for limited durations may be sufficient. Thus, a legitimate 

threat to the state’s monopoly of violence may be sufficient to accomplish 

limited objectives. 

The government attempts to establish this monopoly over lethal power 

by defending two centers of gravity: winning popular support and financing 

a security force. Undoubtedly, the ability to monopolize violence is driven 

by more than these two factors, but the scope of this monograph has been 

intentionally narrowed to address economic sources of power. Winning 

popular support removes the motivation behind a resistance. A government 

that effectively addresses the economic needs of the population in a fair 

manner reduces the likelihood of a grievance that might motivate resistance 

and increases the opportunity cost of joining a resistance. In the event of a 
12

JSOU Report 16-5

resistance, the government maintains a monopoly over violence by financing 

an adequate and effective fighting force capable of defeating any opponent. 

This combination of removing the motivation for resistance and sustaining a force effective enough to defeat a resistance results in a government’s 

monopoly over violence. 

The five critical requirements for gaining popular support and sustaining 

a capable fighting force, then, are economic requirements. Specifically, they 

are the economic activities essential for winning popular support (motivation) and financing the force (sustainment) as depicted in Figure 1.

COG 1: Will of the Population COG 2: Fighting Force

Humanitarian Aid and Essential 

Services

Natural Resources

Farming and Food Security External Funding

Business Opportunities

Figure 1. Five critical requirements for gaining popular support and 

sustaining a capable fighting force. Source: Authors

While each operational environment and UW campaign is unique, 

some or all of the five critical economic requirements listed in Figure 1 are 

pivotal in motivating or sustaining any resistance movement. In almost 

every scenario, UW practitioners will encounter concerns with humanitarian assistance and essential services. Most UW operations will occur 

in rural, agricultural areas where farming dominates society and the local 

economy. Business opportunities dictate employment levels and income for 

the population and the amount of tax revenue for the government. As both a 

cause and enabler of conflict, natural resources can be pivotal in many UW 

environments. And in today’s globally connected economic environment, 

external support is critical for successful resistance movements. Systematically analyzing these requirements will allow the UW planner to identify 

unique vulnerabilities for both enemy and friendly forces. Later sections of 

this monograph will assist in that analysis. 

This operational construct establishes the economic terrain where the 

contest between the resistance and the government takes place. Both sides 

compete for popular support and financial resources, using economic activities in conjunction with other forms of power. Each resistance movement 
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Peterson and Post: Unconventional Economics

will differ in the means by which it challenges and competes for the state’s 

monopoly of violence, but they will inevitably rely on some combination of a 

mobilized population and an organized fighting force.19 The government, too, 

must vie for the support of the population and maintain a security force. This 

is essentially a resource allocation challenge for both the government and the 

resistance. Both adversaries must allocate resources between gaining public 

support through economic activities and funding their fighting force. The 

tradeoffs present different risks and imply different conditions. Regardless of 

how this balance is achieved, the capability to monopolize violence will be 

determined by some combination of popular support and financing a fighting force. In the general case, these are the centers of gravity in an internal 

conflict, representing Clausewitz’s moral and physical sources of power.20

While this operational planning construct defines the economic terrain 

and sets the stage for the economic competition between the resistance and 

the government, it does not provide the specificity required for tactical economic action. To provide this level of specificity, the framework includes 

a modified value chain analysis that provides a structured way to identify 

vulnerabilities in the government’s delivery of critical economic requirements. These vulnerabilities will present opportunities for a resistance to 

accomplish one of the following outcomes: gain popular support for the 

resistance, undermine popular support for the government, raise finances 

for the resistance, or undermine the government’s ability to finance their 

security force. 

Because UW rarely involves direct attack on centers of gravity, the UW 

practitioner and supporting agencies will most often influence economic 

outcomes through an indirect approach. This will typically entail attacking a vulnerability of one of the five critical economic requirements. As 

depicted in Figure 2, the authors identify those tactical vulnerabilities using 

a modified value chain assessment of inputs-production-distribution. Figure 

2 illustrates the linkages between the operational planner and the tactical 

operator for indirect economic activity that destabilizes the local government’s monopoly on violence. 

The following section provides the tactical detail necessary for attacking 

or defending the critical components of an economic requirement. However, 

before applying the modified value chain assessment, the practitioner should 

consider two primary concepts when developing a tactical plan for using 

economics as part of a resistance effort. First, the planner must recognize the 
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tradeoff between the government’s effort to win popular support and finance 

the fight. The government attempts to gain popular support by spending 

money to provide essential services and to create a robust business environment. However, that money could instead finance the force that enables the 

government to exert control over society. Generating government revenue 

requires some combination of external funding and taxation. In the absence 

of sufficient external funding, the government faces the challenge of finding the right amount of taxation to finance the fight without alienating the 

population. Tax too much and the government loses support. Tax too little 

and the government cannot finance the fighting force or essential services. 

The resistance movement faces a similar tradeoff. The resistance may 

undermine popular support of the government by disrupting any of the 

critical economic factors, but that does not guarantee the resistance force 

will gain popular support. The resistance might alienate the population by 

disrupting economic activity or essential services without a viable alternative. Furthermore, disrupting economic activity reduces the opportunity to 

extort or skim financial resources from viable business operations. In short, 

Figure 2. Economic Centers of Gravity in Unconventional Warfare. 

Source: Authors
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Peterson and Post: Unconventional Economics

both sides of an unconventional conflict face an important tradeoff between 

gaining public support and financing the fight. Actions that gain public support may hinder financing the fight. Likewise, actions that finance the fight 

might undermine public support. The challenge is to find the right balance 

for the specific context.

Tactical Considerations

With this tradeoff in mind, the UW planner can use a simplified version of 

a value chain to identify specific vulnerabilities for each of the five critical 

economic requirements.21 As depicted in Figure 3 below, the reduced value 

chain includes inputs, production, and delivery. Applying this simplified 

value chain helps the planner and operator understand how goods and services are produced and delivered to the consumer. With this understanding, 

opportunities to exploit vulnerabilities will become more recognizable. The 

simplified value chain helps the planner answer three basic questions. First, 

what is required to produce the product or deliver the service? Second, how 

is the good or service manufactured? Lastly, how is the product or service 

delivered to the customer? 

The first link in the value chain is the inputs. Production of any good or 

service involves some combination of labor, capital, and technology. Labor 

has both a quantity and quality consideration. For example, production may 

Figure 3. The Critical Components Value Chain. Source: Authors
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JSOU Report 16-5

require a large number of unskilled workers or fewer highly skilled experts. 

Capital includes two primary categories: the machines that manufacture a 

product or help provide a service, and the raw material required to make 

the product or deliver the service. Finally, technology includes the process 

design, organizational structure, and machine sophistication. These three 

inputs of labor, capital, and technology are required to produce any good or 

to provide any service.22

The essential service of healthcare provides an example for analyzing all 

three inputs. The labor for health services typically requires some combination of highly skilled medical professionals and lower skilled first responders 

and administrative workers. The capital includes such items as diagnostic 

equipment, medical support equipment, and pharmaceutical drugs. The 

technology can vary from basic first aid treatment to world-class operating rooms and trauma units. An unconventional operator can assess these 

inputs for the essential service of healthcare and determine exploitable vulnerabilities to undermine effective healthcare services by intimidating or 

sabotaging these inputs.

Production is the second link in the simplified value chain. Understanding the production process helps explain how a product is manufactured or 

an essential service is provided. In short, the production facility is where all 

the inputs are combined to create a good or service. For example, the obvious 

production facility for food items is the farm. Production of manufactured 

goods occurs at a factory where the quality and quantity of inputs is determined by the nature of the product. Production of essential services typically takes place in some form of a fixed structure. For example, healthcare 

is provided at a hospital, which serves as the ‘factory’ for the production of 

medical services.

Distribution is the final link in value chain. It is the system by which a 

good or service reaches the consumer. Distribution of goods requires some 

form of transportation from the production facility to a marketplace. For 

example, a farmer needs roads and vehicles to deliver his goods to a market 

where the customer can purchase the items. Distribution of services can 

involve a centralized distribution plan where central nodes serve multiple customers. A large hospital is an example of centralized distribution 

of healthcare. Conversely, the service can be delivered using a decentralized system of small nodes that serve fewer customers. Continuing with 
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Peterson and Post: Unconventional Economics

healthcare, small health clinics are decentralized nodes for the provision of 

preventive medicine and first aid.

Once the unconventional operator understands the basic value chain, 

he can apply the framework to any of the five critical economic factors. The 

government’s challenge is substantial. In order to deliver a quality product or 

service, every aspect of the links in the value chain must function properly. 

Damage to any link in the chain implies diminished quality and quantity of 

the good or service provided. This erodes value of the product, either as a tool 

for garnering public support or creating revenue. The resistance’s challenge 

is relatively easy. All they must do is disrupt one or two vulnerabilities in the 

value chain to deny a critical economic requirement to the government. The 

nuance is that they must do so in a way that does not turn the population 

against the resistance movement.

After considering the tradeoff between winning popular support and 

financing the fight, and examining the simplified value chain to identify vulnerabilities, the unconventional planner should also consider some aspects 

of the economic context. The value chain exists in an economic environment 

created by such factors as the rule of law, the financial system, adequate infrastructure, the education system, the regulatory environment, the tax system, 

and the level of corruption. While examining each of these contextual factors is beyond the scope of this paper, understanding and analyzing these 

environmental variables could lead to additional, high-payoff vulnerabilities 

that expose grievances, corruption, and government inefficiencies that could 

undermine popular support for the government or deny it critical revenue. 

The modified value chain assessment provides the UW practitioner a tool 

to identify specific vulnerabilities susceptible to tactical economic actions. 

The framework does not replace existing assessment tools. Rather, the UW 

practitioner should use this framework to incorporate assessment tools such 

as PMESII-PT (political, military, economic, social, infrastructure, information-physical environment, time) or SWEAT-MSO (sewer, water, electricity, 

academics, trash, medical, safety, other) to understand the specific tactical 

context. Often, assessments used for stability operations will provide good 

checklists for understanding what is necessary for the government to fulfill 

the critical economic requirements. UW planners should use these as guides 

for their economic intelligence preparation of the battlefield as they identify 

potential economic targets for the resistance movement.
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JSOU Report 16-5

With an operational planning and tactical action framework in place, 

each of the five critical economic requirements using this framework will be 

examined. The discussion for each critical requirement begins with a justification for defining this economic activity as a critical requirement. The value 

chain model will then be used to identify some of the key vulnerabilities and 

use examples to illustrate the concepts. Finally, there will be a discussion of 

planning considerations that impact the critical economic requirement and 

challenge the government’s monopoly on lethal force.
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3. Critical Economic Requirements 

Critical Requirement 1: Humanitarian Aid and Essential Services

Of the five economic critical requirements, the provision of humanitarian assistance and essential services is arguably the most important 

for gaining popular support. In a contest between an established government and a resistance movement, the side that most effectively delivers aid 

and essential services to the population will prevail. Dominating in this 

domain, however, is not easy. As America experienced in New Orleans after 

Hurricane Katrina, effective distribution of critical supplies and rapid restoration of essential services is a challenge even for one of the wealthiest and 

most innovative nations in the world. President Bush received harsh criticism for a slow and inadequate response to the humanitarian crisis in New 

Orleans. Since then, governments at every level consider disaster response 

and humanitarian assistance a crucible event for government credibility. New 

York and New Jersey’s response to Hurricane Sandy is a case in point. The 

population’s view of government effectiveness largely depended on how well 

each state prepared for and responded to the devastation caused by the storm. 

But even with focused attention and no conflict, the response was not perfect 

and political opponents seized the opportunity to criticize incumbents and 

exploit failure to undermine those in power.

The provision of humanitarian assistance and essential services is critical 

because it represents the legitimacy of any government. The same is true for 

organizations that claim to be alternatives to the existing authority. There is, 

however, a large disparity between the degree of difficulty for government’s 

provision of such services and the resistance’s ability to disrupt government 

activity or provide an alternative that is slightly better than the government. 

In the early stages of resistance, the movement has a much easier task. The 

UW planner must look for ways in which American support to a resistance 

movement can disrupt the ability (or perceived ability) of the hostile government to provide for the immediate needs of its populace and simultaneously 

position the resistance movement as the best alternative. Winning in this 

area is critical for the resistance movement’s ability to recruit both fighters 

and, more importantly, auxiliary and underground support. It may also 
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JSOU Report 16-5

prove pivotal in garnering support from external sponsors and recognition 

by the international community. 

If delivery of aid and essential services is difficult in the United States, it 

is even more so in nations with ongoing conflict, broken institutions, and a 

history of distrust. Unfortunately, this is the most likely the environment in 

which the U.S. will conduct UW. Importantly, though, measures of success 

in the area of humanitarian aid and essential services are mostly relative. The 

UW planners’ primary advantage is that they do not need to look for means 

to build the resistance movement into a full-fledged social welfare state. 

Rather, their objective is to give the resistance movement an edge relative to 

the next best alternative, presumably the state. This is precisely the method 

by which Hezbollah came to power in southern Lebanon and highlights the 

imbalance between the degree of difficulty between the government’s challenge and the resistance movement’s challenge. 

Humanitarian Assistance vs. Essential Services 

In many ways, there is significant overlap between humanitarian assistance 

and essential service provision. Both concepts center on the notion that the 

government is providing resources critical for sustaining a productive life. 

Effective humanitarian relief requires urgent delivery of food, water, shelter, 

and medicine to alleviate human suffering in the short run. These same 

resources may also be a subset of essential services in the long run, but long 

run essential services also include education, healthcare, and electricity. 

Because of these similarities, the value chain analysis applies to both concepts. There are necessary inputs, production of services, and distribution 

of services. Examining humanitarian assistance and essential services will 

help a UW planner identify opportunities to exploit vulnerabilities that 

benefit the resistance.

There are, however, some important differences between humanitarian 

assistance and essential services that a UW planner should consider. Because 

humanitarian crises often arise from significant shocks such as natural or 

manmade disasters, aid relief requires effectiveness over efficiency. The 

urgency created from human suffering on display to the world demands an 

immediate and effective government response. The same shocks that induce 

mass human suffering also often change political landscapes, temporarily 

altering balances of power.24 The urgency and complexity of the situation 
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Peterson and Post: Unconventional Economics

will result in several inefficiencies a resistance could exploit to discredit the 

government and enhance its reputation with the population. For example, 

the Nicaraguan government’s response to a massive earthquake in 1972 was 

rife with corruption and ineffectiveness. The Sandista rebels capitalized on 

this failure, using it as a springboard for their insurrection in 1975.25

In contrast to humanitarian relief, the provision of essential services 

requires a long-term perspective toward both effectiveness and efficiency. 

Additionally, the system for delivering the essential service requires significant investment in time, money, and expertise. Failure to deliver sustainable 

and effective essential services will be a constant reminder to the people of 

the government’s inability to perform. A resistance can exploit vulnerabilities by sabotaging the government’s ability to deliver essential services or 

by providing just enough of the service to provide a better alternative to the 

government. For example, provision of electricity in Iraq was plagued by government inefficiency, corruption, and insurgent attacks. The resistance could 

damage an electrical transformer and disrupt the government’s delivery of 

electricity to entire districts of Baghdad. Each night a family could not turn 

on a light using a national electric source, their support for the government 

waned. An insurgent with a generator could solve their problem and gain 

that family’s support. As a result, the resistance provided an essential service 

better than the government. 

Box 1. Hezbollah and Social Services.23

Prior to the rise of ISIL, the militant Lebanese Shi’a organization, Hezbollah (Party of 

God), represented the largest and most sophisticated terrorist group in the Middle East. 

Since its inception in the early 1980s, Hezbollah has relied on a structure composed 

of three sections: military, political, and social. While the military and political wings 

garner most attention, its Social Service Section enables all other activities. In 2007, 

this section received an estimated 50 percent of Hezbollah’s total budget. These funds 

underpin a social welfare system that influences all aspects of Lebanon’s Shi’a society. 

The reconstruction division of the Social Service Section repairs war damage in Shi’a 

neighborhoods and employs the Shi’a population. In the aftermath of the 2006 war with 

Israel, the division implemented a reconstruction plan well in advance of any Lebanese 

government action. The Social Service Section also provides care for wounded fighters 

and serves as a champion for the family of martyrs. Along with Social Service Section 

provided education, these functions serve as critical recruiting tools for Hezbollah’s 

military wing. They also serve as a humanitarian shield for the organization and political 

power for national elections. In short, Hezbollah’s ability to provide a viable social welfare 

alternative to the Lebanese government defines its success.
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Value Chain Analysis for Humanitarian Assistance 

The value chain analysis highlights vulnerabilities in the provision of 

humanitarian assistance. The most obvious opportunities for tactical operations involve the inputs and the distribution of aid. In most cases, the inputs 

include stored or donated supplies of food, water, or medical supplies and 

the low-skilled workers that deliver them. Based on the situation, distribution of aid typically involves established warehouse distribution points or 

ad hoc, decentralized distribution points. Both the inputs and distribution 

have multiple vulnerabilities a resistance can exploit to their advantage. 

Production of humanitarian assistance is less tangible because it mainly 

consists of a coordination cell that prioritizes and coordinates distribution 

requirements. There is no factory that produces humanitarian assistance, but 

rather coordination offices that determine when, where, and how much aid to 

deliver based on assessed needs and established criteria. While a resistance 

movement may have difficulty affecting the actual planning cell, they can 

create security environments where discerning exact aid requirements and 

equitable distribution plans becomes difficult. The effect of this uncertainty 

can create perceptions of inaction or preferential treatment. 

UW Considerations for Humanitarian Assistance

Although morally untenable, resistance movements have historically applied 

these approaches in leveraging the distribution of food aid. Invariably, food 

aid must travel from a government port of entry to the afflicted area, often 

through insecure roadways. This provides the resistance movement (or 

criminal organizations) an opportunity to outright confiscate the food for 

their purposes or ‘tax’ its distribution. In total, as much as 80 percent of all 

food aid never reaches its intended target.26 In such an environment, food 

becomes power and an immediate mechanism for molding popular sentiment. In fact, a recent study of U.S. food aid found that a 10 percent increase 

in food aid caused a 4 percent increase in the incidence of conflict.27 Somalia in the early 1990s is the classic example of food aid amplifying conflict 

as warlords fought each other, and later peacekeepers, for control of food 

distribution. In essence, food became the currency of power in the face of 

widespread starvation. That trend continues today with al-Shabaab as the 

chief culprit of appropriated food aid. The same dynamic has played out in 

places as geographically diverse as Afghanistan and Thailand.28
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While international law prohibits the discriminate distribution or diversion of aid for political purposes, the UW practitioner must still consider 

how the resistance might use this lever to separate the population from the 

government. Occasionally, the government will make things easy, such as 

in Mali. The drought in the Tuareg region of Mali created significant hardship, but it was the government’s theft of donated food aid that drove many 

to take up arms.29 In other situations, the resistance may need to rely more 

on perception to create the intended effect. Highlighting the government’s 

failure to deliver aid while publicizing the resistance’s ability to supply food 

to the people, possibly with U.S. assistance, would be the general goal. 

The UW advisor must also consider the role nonprofit organizations 

(NPOs) play in the delivery of humanitarian aid.30 NPOs typically distance 

themselves from all parties of a conflict, seeking the neutrality that affords 

them access to any population. In practice, however, NPOs and the resources 

they provide can become powerful tools for either the resistance or the 

government. This could be as benign as a resistance movement advocating for humanitarian assistance from the international community, effectively steering aid to its supporters. Since aid money is fungible, this allows 

the resistance to allocate more of its scarce resources to other operational 

requirements.31 More cynically, parties to conflict have often allowed NPOs 

to operate only in areas that support the party’s cause, typically after levying 

a security ‘tax’ that guarantees safety for the NPO workers. Again, while the 

ethics of such actions are questionable, UW advisors should recognize their 

impact. The resistance should focus on information campaigns to create 

similar outcomes while avoiding human rights violations. 

Value Chain Analysis for Essential Services

The value chain for essential services differs slightly by type of service. However, the production and delivery of education serves as a good example from 

which to draw broader conclusions. Education is a vitally important essential 

service for the long-term wellbeing of any nation. Often, provision of education takes high priority during reconstruction and stabilization operations. 

One needs to look no further than operations in Iraq and Afghanistan for 

the emphasis on reestablishing educational facilities to gain the support of 

the people. In Afghanistan alone, United States Agency for International 

Development (USAID) claims to have assisted the Ministry of Education 
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JSOU Report 16-5

in building more than 13,000 schools.32 However, educating people takes 

much more than a building, and the value chain analysis helps identify all 

the other requirements.

In addition to a school building, inputs for education include healthy 

students, engaged teachers, educational materials, furniture, school supplies, secure transportation, utilities, and administrative staff. Production 

obviously occurs at an educational facility, but distribution can take multiple 

forms. Large schools can educate hundreds of students, but decentralized 

small schools can also achieve positive education outcomes. Technological improvements and connectivity have the potential to bypass the school 

building in many cases. 

UW considerations for Essential Services

When UW practitioners consider the entire value chain, there are multiple 

vulnerabilities that can help a resistance achieve one of its four objectives. 

For example, the militia in Iraq took multiple steps to disrupt governmentprovided education and replace it with education from the militia. Teachers were intimidated from teaching at public schools, but paid by militia to 

teach in classrooms provided by the militia. Militias looted school furniture 

and supplies and used them to operate militia-provided schools. One rocket 

launched at a school would deter children from attending a government 

school, but the militia-provided classroom was safe.33 All of these actions 

undermine popular support for the government and provide opportunities 

for a resistance to gain popular support by providing an alternative essential 

service. 

While some of the methods used by our adversaries in Iraq are ethically 

questionable, we may achieve similar outcomes through other means. For 

example, rather than intimidating teachers, U.S.-backed resistance movements could simply offer to pay them to desert government schools for 

schools under the control of the resistance movement. UW advisors could 

also rely on a growing body of research that identifies the most cost-effective 

way to improve educational outcomes. In Kenya, for instance, students who 

received a $0.40 deworming pill attended school more days per year than 

those who did not. Not surprisingly, those students scored higher on exams, 

completed more years of school, and ultimately earned higher wages.34 These 
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Peterson and Post: Unconventional Economics

and similar programs are simple, cost-effective ways a resistance movement 

could garner the popular support that is critical for its long-term success. 

Critical Requirement 1 Summary

The provision of humanitarian assistance and essential services is critical for 

gaining popular support. To out compete the government in this space, the 

resistance movement must simultaneously demonstrate government failure 

and provide at least the prospect of a viable alternative. The UW practitioner 

can assist the movement in this regard by identifying vulnerabilities in the 

government’s essential services and humanitarian assistance value chains. 

The practitioner can use a similar approach to grow or protect the resistance 

movements to provide replacement services. 

Critical Requirement 2: Farming and Food Security

Agricultural production and food security are issues of life and death in the 

poor, rural operational environment in which most UW campaigns begin. 

In these environments, the majority of the population makes its living from 

agricultural activity and spends a disproportionate amount of its income 

on food goods. Often, individuals without farming skills will resort to 

farming as conflict destroys other forms of employment. Under the direst 

circumstances, agricultural production is often the only means of feeding 

one’s family. Further compounding such situations, a lack of viable farming 

options and food insecurity often drive massive migration from rural to 

urban areas, increasing the strain on the government’s ability to provide for 

its citizens. As such, the government’s popular support depends significantly 

on its ability to control this economic center of gravity.

It is not surprising, then, that threats to agricultural production and food 

security are highly correlated with civil protest and political violence. This 

trend was particularly evident in 2007-2008 as record-high food prices triggered protests in 48 countries.35 Several researchers have linked decreased 

agricultural production during turbulent climatic events to reduced government capability and increased violence.36 For the UW practitioner, the close 

connection between farm failure, food insecurity, and grievance is vitally 

important. Rural communities, the most common birthplace of resistance 

movements, are often disconnected both geographically and politically from 

the ruling elites.37 Such separation affords UW personnel a physical safe 
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haven and a ripe field of grievances upon which they can build their movement. This has been true across time and around the globe. In Nigeria, the 

home of Boko Haram, over 80 percent of the population outside of the major 

urban areas rely on farming as a primary source of revenue.38 Nomads and 

semi-pastoralists, the majority employment type, produce approximately 40 

percent of Somalia’s gross domestic product.39 Even in the United States, the 

war for independence was led and sustained by its farmers. Few resistance 

movements have survived, let alone succeeded, without at least the tacit 

support of the farmer. 

As consumers of agricultural production, the entire population is susceptible to issues of food security. At the most basic level, the price of food 

is a key determinant of economic wellbeing for the poorest members of 

society. In wealthy economies, the average individual spends approximately 

10 percent of his or her income on food.40 In fragile and conflict affected 

areas, that number is closer to 40-50 percent.41 Among the lower income 

individuals in those societies, the amount of income spent on basic food 

items is even greater. The overall economic well-being of the poorest consumers in a society is often directly related to the price of staple foods, such as 

bread or starches. Spikes in the price of these goods, whether through global 

trends, government policy, or disaster (manmade or natural), immediately 

increase the relative deprivation of the population. This relative deprivation 

has driven resistance movements throughout history, most recently motivating many of the early protests in the Arab Spring. For example, in the winter 

of 2010-2011, world food prices reached a historic peak.42 Not coincidentally, 

this peak correlated with the initial protests in Tunisia and Libya. The New 

England Complex Systems Institute illustrated that this connection between 

food prices and conflict as shown in Figure 4. 

Given these realities, the key to winning the support of rural communities is the creation or protection of a profitable farming environment and 

its related food security. The resistance movement will succeed to the extent 

that it can provide this to the population or deny the government’s ability to 

do the same. In the areas it controls, profitable farming will create several 

benefits for the resistance such as increased caloric intake, financial support, 

and intelligence flows. Similarly, disruption of farming in state-controlled 

regions may produce significant social upheaval. The most successful UW 

planners and practitioners will understand the agribusiness value chain 

and its vulnerabilities, exploiting them to undermine the government and 
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leverage the population. As highlighted in Box 2, one of our historical adversaries certainly recognized this truth.

Agribusiness Value Chain

As important as farming is to many resistance movements, UW planners and 

practitioners do not need a degree in agribusiness to create or take advantage 

of shocks to the farming sector. A basic understanding of the value chain 

that turns initial agricultural inputs into income for farmers and food for the 

population will suffice. The inputs to agricultural production consist of labor, 

seed or initial livestock, arable or pastoral land, and the knowledge necessary 

to combine these inputs. To earn income, farmers must produce marketable 

goods. This process of production relies on systems of irrigation, fertilization, 

vaccination, and cultivation. One aspect of the agricultural value chain is 

the importance of seasonality and weather. Even with sufficient high-quality 

inputs, significant manmade or natural disruptions during critical periods 

such as planting or harvesting can damage an otherwise healthy production 

process. The final component of the agricultural value chain is distribution. 

For the purposes of this monograph, we consider the storage, intermediate 

Figure 4. Correlation of conflict and food prices. 

Source: New England Complex Systems Institute43
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processing, and transport of farm products as the primary components of 

the distribution system. 

As with any chain, degrading one link threatens the entire system. This 

presents a significant challenge for the existing government since the resistance movement, particularly with assistance from American UW advisors, 

can attack any of these areas. Furthermore, the resistance may not need to 

create such effects itself, but rather may be able to use information operations to capitalize on existing circumstances. While a drought cannot be 

pinned on the established government, it is a useful shock if the resistance 

can convince the population that the government’s failure to manage water 

resources compounded the problem. Whether through local agricultural 

enhancement efforts, subversive action in pro-government regions, or opportunistic messaging in both, UW planners can use their understanding of 

the agribusiness value chain to dominate this economic center of gravity.

UW Planning Considerations

The quality and quantity of agricultural inputs will significantly impact 

the profitability and sustainability of farming enterprises. Although historically a low-skilled endeavor, the green revolution of advanced farming 

techniques increasingly favors farmers with technical knowledge and skills. 

Box 2. Castro in Cuba44

In the early stages of his career, Fidel Castro understood economics. Or at least he knew 

enough to use economic operations in support of his broader resistance campaign. By 

the fall of 1957, the Cuban revolution was over four years old yet Castro and his partisans could point to only modest gains. President Batista and his government, while not 

exactly popular, largely maintained their governing legitimacy. Life around the country, 

particularly in the capital of Santiago, remained largely unchanged. That is, until Castro 

escalated the conflict through dramatic economic operations. Beginning in November of 

1957, Fidel ordered the destruction of all sugar cane in Cuba. Valued at more than half 

a billion dollars and responsible for the employment of over 700,000 workers, the sugar 

industry was the only industry of significance in the Cuban economy. Simultaneously, 

the urban underground began attacking major oil refineries, aqueducts, and commercial 

transportation systems. Through it all, Castro maintained a constant strategic message 

to his fellow revolutionaries and the swaying population: we will all prosper when Batista 

leaves. By many accounts, these actions, combined with political and military offensives, 

eroded Batista’s legitimacy enough to influence the population and catalyze the resistance 

movement. Just over a year later, Fidel Castro and his revolutionary forces expelled 

Batista from the capital and took control of the country.
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Hybrid seeds, genetically modified crops, and new breakthroughs in animal 

husbandry all offer the high-skilled farmer a distinct advantage over more 

traditional producers. Using new seeds, fertilizers, and irrigation systems 

can more than double yields relative to traditional techniques.45 Similarly, 

new technologies can make previously unproductive land profitable. Importantly, these increases in production are not necessarily reliant on significant 

increases in farm machinery. Access to new technologies in seed, fertilizer, 

vaccines, and antibiotics may enhance, rather than replace, traditional farming tools that rely on unskilled labor. Where new technologies do reduce 

demand for unskilled labor, adaptation may free younger males to participate 

in resistance activities.

As with any other business, high quality inputs are a necessary but not 

sufficient condition for profitable farming and food security. Farmers must 

also possess the knowledge and resources to optimally combine those inputs 

for maximum production and eventually income. While knowledge is easily 

transferred, the resources to act upon that knowledge are less easily acquired. 

Often, farmers in poor areas lack access to banking and, therefore, the credit 

necessary to expand production beyond subsistence farming. For example, 

more than a decade after the conflict in Rwanda, less than 10 percent of the 

rural population had access to a formal banking system.46 For farmers, this 

is particularly limiting as they must purchase, or hold back, planting seed 

or breeding livestock prior to the income they will eventually generate. The 

resulting need for credit is often exploited by corrupt government officials 

or loan sharks. These agents facilitate indebtedness and then use the farmers as indentured servants to grow crops that serve the lender’s purposes 

rather than the profitability of the farmer. As cash flow and credit challenges 

restrict poor farmer’s profitability, programs such as farming grants or village lending programs may allow for increased production and income in 

resistance-friendly areas. Examples of this in Uganda and Rwanda, although 

in post-conflict environments, indicate the efficacy of such programs.47

The UW planner and practitioner can engender support in the resistance 

movement’s area of influence by leveraging these advances in the inputs 

and production of farm goods. The most obvious point of entry may be 

high-technology seeds. In many developing nations, the government and 

its farmers are generally risk averse and hesitant to adopt new technology.48

For example, Ethiopia only recently allowed the introduction of genetically 

modified seed in a limited number of crops. The few farmers willing to plant 
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JSOU Report 16-5

these seeds recognized significant increases in yield; today, farmers across 

Ethiopia are quickly transitioning to the new seed.48 New seed types may also 

bring new land into production, thereby increasing the production potential 

in a region. Herdsman may realize similar gains through the provision of 

advanced vaccinations and antibiotics. As with new seed, uptake may be 

slow initially, but a few small successes will likely build demand for the 

production enhancing goods. 

UW planners and practitioners will likely not be farm experts and therefore must rely on local knowledge and U.S. experts to craft a program that 

will not inadvertently undermined the credibility of on-the-ground advisors. 

As a general rule, aiding local farmers by purchasing agricultural inputs 

within the movement’s area of control is preferable to external provision. 

If high quality inputs exist, providing funds for increased purchases may 

be sufficient. If inputs are scarce or nonexistent, the UW team may need to 

provide initial supplies to start the virtuous cycle. The goal, however, should 

be self-sufficiency as history is replete with examples of local producers failing due to a flood of donated agricultural inputs and final goods.50 Similarly, 

while a properly trained 18D Special Forces medic may need to provide initial veterinarian services for the resistance movement, training and utilizing existing veterinarians from within the population not only lessens the 

burden on the UW team, but it also leads to increased employment within 

the supporting population. 

The government and its supporters equally rely on readily available, highquality inputs and means of agricultural production. To the extent that the 

resistance movement can disrupt the supply or utility of those factors of 

production it may foment discontent in the population. For example, in arid 

climates, sabotage of irrigation systems could reduce production by as much 

as 60 percent.51 Seed distribution systems represent another potential target. 

While most subsistence farmers rely on seed held back from the previous 

year’s harvest, larger commercial farms will often buy some portion of their 

seed from a distributor. The introduction of inert or malicious seed into 

this distribution system could prove disastrous for not only the commercial 

farmers but also anyone involved in the distribution system. While effective, 

such agricultural sabotage requires both the disruptive seed and an individual with access and placement with the distribution system—requirements 

that may be difficult to achieve. However, crop failure and herd decimation 

by natural occurrences happens regularly in poor farming areas, and the 
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resistance can use such a naturally occurring catastrophe to its advantage. 

Through a targeted information campaign, the resistance may convince the 

population that the failure arose from the government’s inability to provide 

quality seed, fertilizers, or vaccines. 

While shocks to inputs and means of production in the agricultural sector 

can affect the sentiment of the local population, focusing resistance efforts 

on the distribution portion of the agribusiness value chain may be the most 

efficient use of resources. It is during this phase that the farmer connects 

directly with the population as agricultural goods become either income, 

food, or both. Because of this, enhancing or disrupting the distribution of 

farm produce impacts not only the profitability of farmers but also food 

security for the local population. Facilitating the distribution of farm goods 

reduces transaction costs, thereby increasing profits for farmers while simultaneously increasing the supply of food to the population. All things equal, 

increased supply also drives down food costs for the population. Conversely, 

a disruption in the distribution of agricultural products increases production costs for the farmer. The resulting scarcity of food increases prices for 

consumers, potentially astronomically. The UW practitioner should proceed 

with caution in the execution of a plan that creates scarcity. If the public 

perceives the resistance as the cause of scarcity, popular support will swing 

toward the government.

Storage and intermediate processing facilities in pro-government regions 

may represent high-payoff targets for the resistance movement. While direct 

attack against these facilities may be effective, indirect approaches may be 

more feasible, particularly early in a resistance movement’s development. 

Since many agricultural products produced in poor nations are consumed 

internationally, quality assurance is critical for the trade of those products. 

Undermining consumer confidence abroad through sabotage at domestic 

storage and processing facilities, even in a limited manner, could effectively 

paralyze the entire market for a given good. With a properly developed campaign of targeted covert food contamination, the resistance could destroy 

the profitability of pro-government producers. At the same time, prices for 

the targeted food product would increase locally, causing discontent among 

the population. Since export taxes represent a critical revenue stream for 

the government, such actions also disrupt government finances. A followon campaign that assigns blame to government actors for the food quality 

catastrophe would further undermine support for the government. 
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JSOU Report 16-5

The transportation of agricultural goods to markets also presents the 

resistance movement with opportunities to undermine pro-government 

support. Most directly, the resistance movement might prevent the transit 

of movement-controlled roads by producers loyal to the government. Those 

producers then must either hire armed escorts or divert to other means of 

transporting their goods. Both of these options increase their costs of production and erode profit. Alternatively, the resistance could instead allow the 

transit of goods, but charge a ‘tax’ for such activity, again, increasing costs to 

those producers. If such taxes are not levied on supporters of the resistance, 

those producers realize a competitive advantage at the point of sale as their 

costs of production are comparatively lower than pro-government producers. 

Critical Requirement 2 Summary

Whether through proactive measures, capitalizing on natural or manmade 

catastrophe, or both, UW planners and practitioners must understand and 

exploit the agribusiness value chain to control the farming and food security 

economic center of gravity. Particularly in rural societies, popular support 

for the movement hinges on doing so. Most simply, the resistance accomplishes this by increasing transaction costs for pro-government producers 

relative to supporters of the resistance movement. The resulting food price 

and access fluctuations create a cascading effect on popular support. 

Critical Requirement 3: Business Opportunities

Formal business operations are the most complex of the five critical economic requirements for several reasons. First, business operations simultaneously affect both centers of gravity. Successful business operations gain 

popular support by providing jobs with wages that help alleviate grievances. 

Additionally, good paying jobs increase the opportunity cost of joining a 

resistance force, which reduces the likelihood of an individual joining a resistance. Business operations also help finance the fight by providing tax revenue, which is critical if external funding or revenue from natural resources 

is not sufficient for producing an effective security force. Secondly, formal 

business operations are extremely dependent on the government’s ability to 

establish a healthy business environment. A healthy business environment 

requires the proper balance of property rights, limited bureaucracy, adequate 

infrastructure, efficient taxation, rule of law, and security. The government’s 
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Peterson and Post: Unconventional Economics

challenge is to make sure all these variables work together. The resistance’s 

advantage is that only one disrupted variable can hinder business operations 

and undermine the government.

Historically, the manner in which a resistance movement approaches the 

local business environment depends on its relationship to the population and 

its strength relative to the state.52 For nascent movements with little popular 

support and no control over territory, the relationship is mostly predatory. 

Often, this takes the form of bank robberies, kidnappings, and other largely 

criminal activities. Movements in this stage will also typically focus on disrupting the formal economy, which not only weakens the state through lost 

tax revenue but also begins to enlarge the underground economy. As the 

movement matures, it begins to take on a more parasitic approach to the local 

economy. In this stage, the resistance movement begins to assert control over 

territory and the economic activity therein. The movement will typical begin 

charging ‘revolutionary taxes,’ although these are usually levied only against 

wealthy individuals or those opposed to the cause. Importantly, as a parasite, 

the resistance must be careful to not extract too much from the host or it will 

lose its source of income. In the most mature stages of resistance where the 

movement controls large swaths of land and can rival state security forces, 

the relationship becomes more symbiotic with the local economy. In this 

stage, the movement begins to tax systematically and, in return, increases 

the services it provides. The movement also begins to promote certain economic activities that fill its coffers, win popular support, or both. From 

an economic perspective, the movement in the symbiotic stage looks more 

like a surrogate state than a rebel organization.53 Importantly, the economic 

growth and revenue generated in resistance-controlled areas represents a 

direct reduction of revenue going to the formal state. The resistance takes all. 

Although the resistance movement’s interaction with business typically 

evolves with its maturity, an established resistance can choose to be predatory, parasitic, or symbiotic (or all three) based on specific circumstances. 

In general, the resistance can pursue two primary approaches. First, the 

resistance could sabotage businesses to undermine the credibility of the 

government, reduce employment, reduce tax revenue, and increase the population’s grievance against the government. This strategy would undermine 

the government’s ability to win the support of the people and create opportunities for the resistance to garner favor with the local populace. Second, the 

resistance could take the opposite approach and exploit a thriving business 
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JSOU Report 16-5

environment to finance resistance operations. Members of the resistance 

can extract fees throughout the value chain in exchange for safe passage 

and local security. Essentially, the fee is a protection tax paid by the business owner. Similar to a natural resource situation, the resistance could loot 

and sell some fraction of the production to finance resistance operations. 

Both strategies require the resistance to exercise restraint as they maintain 

a delicate balance between the advantages of sabotage, collecting protection 

money, and looting production. Taken too far, either strategy could impose 

a high cost on businesses and employees that could drive them toward supporting the government. 

Before analyzing the value chain of any business operation, a UW planner should understand two important aspects of the business context. Initially, the planner should consider whether a business is formal, informal, 

or illicit because each type of business presents the resistance with different 

leverage points. A formal business is a legal entity operating with the full 

knowledge of the government and subject to all laws, regulations, and taxes 

imposed by the government. An informal business provides a legal product or service, but operates outside the legal framework established by the 

government. Often referred to as the shadow economy, the informal sector 

operates outside the legally sanctioned economy. Finally, an illicit business 

provides an immoral or illegal product or service and operates outside the 

legal framework established by the government. The illicit economy is commonly referred to as the black market. The options available to the resistance 

will vary based on the type of business considered.

Secondly, an unconventional planner should consider that every business 

owner incurs risks created by various aspects of the business environment. 

As previously mentioned, the government faces a considerable challenge in 

establishing a healthy business environment that consists of multiple variables. When the government fails to ensure all the variables are effective, 

the business faces increased costs and risks that threaten business viability. 

For example, inadequate property rights increase the risk of not reaping the 

rewards of a new idea. Inadequate rule of law increases the risk of not receiving payment as determined by contract. Too much bureaucracy or corruption will drive businesses to the informal sector to avoid the costs of formal 

compliance. Severe taxation will also drive businesses to the informal sector 

as a tax avoidance strategy. Poorly maintained infrastructure threatens business profits by increasing the costs and risks of production and distribution. 
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Peterson and Post: Unconventional Economics

Because these variables impact business risk in many ways, the UW planner 

can identify multiple opportunities to influence business operations in a 

manner that is beneficial to the resistance and harmful to the government.

With this understanding of the types of business and the business environment, the UW planner can now apply the value chain analysis used for 

the other four critical economic requirements. After a brief discussion of the 

value chain, the subsequent discussion will address the options available to 

a UW planner.

Business Operations Value Chain Analysis

The value chain analysis is similar for formal, informal, and illicit businesses. Regardless of the business legitimacy, each business operation must 

consider the inputs, production, and distribution of its product or service. 

This discussion of the value chain will use the example of a formal business. However, this analysis can be applied to informal and illicit businesses. 

One example of a formal business is a garment factory, which is a common 

type of manufacturing for less developed countries where UW is likely to 

occur. Garment factory inputs include labor, machinery, and raw material. 

The labor is generally low-skilled and female. Production equipment might 

include large cutting machines, sewing machines, and ventilation systems. 

Raw materials include items such as cloth, dye, thread, and buttons. All of 

these inputs are vulnerable to exploitation or sabotage by a resistance movement. The production usually occurs at a factory building where the inputs 

are processed and assembled into a final product. Garment factories vary in 

form and could be a stand-alone building or a single floor of a multi-purpose 

building. Finally, there is distribution of the finished garment. The factory 

may need a place to store excess inventory until shipment. Once the garment 

is ready to leave the factory, the business requires adequate infrastructure to 

transport the goods to a wholesaler, a retail store, or an exporter location. 

The distribution process is another part of the value chain that is vulnerable 

to sabotage, extortion, or looting. 

UW Planning Considerations

A UW planner is now equipped to consider how to sabotage or exploit business operations to undermine popular support for the government and/or 

inhibit the government’s ability to finance their security forces. Conversely, 
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JSOU Report 16-5

the UW planner can use this framework to gain popular support and to 

finance resistance operations by exploiting business operations. The following section on planning considerations will include a discussion of the 

type of business (formal, informal, illicit) and the goal of the UW planner 

(undermining the government, supporting the resistance).

Large, formal businesses are a lucrative target because of the number of 

employees affected and the revenue generated. The government can significantly benefit from large, formal businesses whether they be state owned 

enterprises, foreign direct investments, or private domestic corporations. 

These large businesses improve employment, generate tax revenue, provide 

opportunities for patronage, and drive economic growth. If the government 

can create an effective business environment, then it is more likely to win the 

support of the people and generate revenue to finance security operations. 

However, creating the environment that enables sustained formal business 

operations is not easy, and there are many opportunities for a resistance 

movement to undermine large, formal businesses.

If the resistance’s objective is to undermine popular support for the government and to reduce the government’s financial gains, then the resistance 

should consider a predatory approach. This would entail disrupting business 

operations by sabotaging the value chain or negatively affecting the business environment. Sabotaging the value chain is the most immediate and 

potentially the easiest way to undermine formal businesses. For example, 

intimidating local workers could prevent labor from showing up to manufacture goods. Conducting ambushes against trucks or trains disrupts the 

sale of goods and reduces profit. In an extreme example, Indonesian rebels 

of North Acheh seized control of an Exxon-Mobil gas factory in 2001. The 

seizure cost Indonesia hundreds of millions of dollars in lost foreign investment.54 The resistance could also affect the business environment indirectly 

by bribing judges to rule against firms, by bribing bureaucrats to fine businesses or prevent expansion, and by forcing input suppliers to provide inferior goods. If the resistance increases the difficulty of joining the formal 

economy, the businesses may join the informal economy where they are more 

susceptible to the resistance. Because such actions may alienate segments of 

the population, this predatory approach is most applicable in regions with a 

pro-government population.

When the resistance’s objective is to finance their own operations, it 

should consider exploiting the value chain and the business environment 
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Peterson and Post: Unconventional Economics

through either a parasitic or symbiotic approach. The resistance can exploit 

the value chain through various means of extortion at any link in the value 

chain. A small labor tax could ensure that all the workers arrive to work 

safely and their families remain safe at home. A transportation tax at temporary checkpoints takes advantage of the distribution system. Looting 

small portions of production can provide sales revenue. The Philippine’s 

New People’s Army used a variant of this method, hiring out its soldiers as 

field laborers in return for a take of the harvest.55 Targeted actions against 

government workers controlling the business context could enhance resistance operations. For example, the resistance could collect a payroll tax 

from government workers so they can keep their jobs. A small bribe to the 

right person could speed up or slow down formal business approval that 

could lead to future business extortion opportunities. The resistance can 

also benefit by exploiting government contracts aimed at rebuilding war-torn 

communities. The Provisional Irish Republican Army (IRA) perfected this 

technique in the 1970s and 1980s. As the British government spent billions of 

pounds to rebuild burned out neighborhoods in Belfast, the IRA established 

construction companies that fixed prices and falsified employee rolls. The 

scheme brought millions of pounds into the Provisional IRA coffers.56 The 

Taliban in Afghanistan has reportedly netted over $150 million through 

similar schemes.57 All these actions could enhance the resistance’s finance 

operations, while undermining the credibility of the government to establish 

rule of law. Although not as likely to alienate the population, the resistance 

must still use caution when using parasitic techniques, ensuring they do not 

overburden the host economic activities.

While large, formal businesses are tempting targets, they are less common 

than smaller, informal businesses. In the developing countries where UW 

campaigns are most likely, the informal sector comprises nearly 50 percent 

of all economic activity.58 These informal businesses are the most vulnerable 

to influence from the resistance. This vulnerability exists because they are 

operating outside the protection and support of the government—owners 

cannot turn to the government for support without compromising their 

informal status. This standing offers the resistance specific advantages with 

regard to taxation and extortion. The resistance could also affect popular 

opinion by exploiting the very existence of the informal sector—it typically 

exists because of government corruption and onerous policies in the formal 
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JSOU Report 16-5

economy. Finally, a mature resistance can undermine the government by 

serving as the shadow government for the informal shadow economy.

As with the formal business sector, the resistance’s options will vary with 

the resistance’s objectives. If the objective is to undermine popular support and financing for the government, the resistance should take predatory 

actions against the formal economy or enhance the informal business sector. 

For example, the resistance could bribe government bureaucrats to prevent 

or delay formal business registration, which would drive more business into 

the informal sector. For a price, the resistance could provide a business owner 

the protection necessary to start business operations sooner than possible 

within the government’s approval process. As part of an information campaign, the resistance can highlight the government’s inefficiency in contrast 

to the resistance’s ability to provide immediate help. 

If the resistance objective is to finance its operations, the informal business sector is vulnerable to extortion (taxation). The resistance can potentially extract a higher percentage of revenue from an informal business 

because that business is not paying government tax. When extracting money 

from the business, however, the resistance should be careful not to exceed 

the cost of joining the formal economy. The resistance tax collection can 

continue as long as it is symbiotic in nature. The resistance must provide 

sufficient support for the informal economy and cannot extract too much 

tax from each business. Managed properly, the informal business sector has 

the potential to be a high-volume business for the resistance in contrast to 

the formal business sector with more lucrative individual business targets.

Finally, the UW planner should consider the illicit economy. While U.S. 

and international law prohibits association with many activities found in the 

illicit economy, such as human and narcotic trafficking, the illicit economy 

still offers the resistance critical capabilities. Often, the interests of black 

market operators and the resistance will align as both exist outside the host 

nation’s legal framework. As such, individuals involved in the illicit economy 

can provide UW planners and practitioners valuable tools, both functionally 

and informatively. First, they have demonstrated a willingness and ability to 

operate outside of the government’s purview. Such individuals are valuable 

for the resistance in a myriad of ways, particularly in the auxiliary network 

as smugglers. Since these individuals survive on their wits, they are often well 

informed on pending security force operations in the area. They may also 

provide valuable information to UW practitioners on the effect of operations. 
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Peterson and Post: Unconventional Economics

For example, if a specific sabotage operation intended to disrupt the supply 

of grain to an area, the price of grain on the open market would be of little 

interest since it is controlled by the government. However, the black market 

price of grain, which is impacted by a supply shock, will be a good measure 

of effect as it is the true price to the consumer.

In some cases, the resistance may benefit directly by participating in the 

black market. This is particularly true if the product or service has no moral 

content, but is made illegal to advantage the government over a resistance 

movement. The black market for benzene in Iraq is an example of an illegal 

market that is not an immoral product. In an effort to control distribution of benzene, the Government of Iraq set prices and rationed benzene 

to Iraqi citizens. In the face of increasing demand, massive lines formed to 

purchase limited amounts of fuel at below market prices. Basic economics 

would predict the emergence of a black market for fuel as local militias, 

including Jaysh-al-Madi, recognized an opportunity for profit. From the 

government’s perspective, this black market for benzene was illegal. From 

an ethical perspective, the sale of gasoline is not immoral and is representative of opportunities for a resistance movement to benefit from the illicit 

economy. 

Critical Requirement 3 Summary

Business operations represent the most complicated critical economic 

requirement. The resistance movement must consider its relationship with 

the population and its strength relative to government security forces as it 

determines how best to navigate this economic terrain. For nascent movements, predatory actions aimed at disrupting the status quo may be appropriate. As the resistance movement matures, however, it should seek to develop 

symbiotic relationships with the local economy. At every stage, the resistance 

movement must modify its approach based on the type of firm, the business 

environment, and the resistance’s objectives. With a thorough application 

of the abbreviated value chain analysis and the business context, the UW 

planner can discover multiple opportunities to undermine the government 

and enhance the resistance. 
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JSOU Report 16-5

Critical Requirement 4: Natural Resources

Since the end of the Cold War, most conflict-related deaths have occurred 

in poor, natural resource exporting countries.59 These countries are also our 

most likely UW operational environments. From the UW planner’s perspective, natural resources offer two points of economic leverage for the resistance 

movement: vulnerability of the state and opportunity for the movement.60

States with abundant natural resources tend to inordinately depend on that 

revenue stream. The income generated by these resources drives the provision of essential services, dictates security spending, buys off potential 

political adversaries, and often influences external intervention by the international community. It is the lifeblood of many of the hostile governments 

the U.S. is likely to encounter. This makes them particularly susceptible to 

commodity price shocks and supply chain disruptions. During commodity 

price spikes, these states often misallocate national assets toward resource 

extraction and away from other sectors of the economy.61 When prices drop 

or supply chains are broken, the state cannot fall back on other sources of 

revenue as years of neglect left them largely underdeveloped. Such volatility 

undermines long-run economic growth and, critically, creates short-run 

destabilizing outcomes such as unemployment, under-provision of essential 

services, and numerous other grievance-inducing plights.62 Resource sectors 

also provide target-rich environments for graft and corruption within the 

government where the appointments within certain ministries can be highly 

lucrative rewards. This fact was not lost on Foday Sankoh, the leader of the 

Revolutionary United Front rebel organization in Sierra Leone. During the 

1999 peace negotiations, Sankoh indicated his group would only stop fighting when he was appointed not only the nation’s vice president, but also the 

Minister of Mines.63 While Sankoh’s is an extreme example, it highlights 

the institutional erosion that renders the government more susceptible to 

insurrection through increased grievance. 

Although these resources may be a curse with regard to state stability 

and popular support for the government, they can represent a short-term 

financial boon for the resistance. Most directly, natural resources represent 

a massive financial opportunity for the movement. The resistance’s ability 

to quickly extract resources and monetize them is critical in building or 

sustaining the movement.64 Resource revenue can dwarf financial support 

from the local population, and access to it can determine the fate of the 
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Peterson and Post: Unconventional Economics

resistance.65 Natural resources have proven an excellent source of finance 

for rebel groups, allowing otherwise ineffective groups to pose an existential 

threat to the existing government. Used properly, this windfall can fund 

arms purchases, increase revolutionary salaries, and build robust auxiliary 

and underground functions. It may also allow the resistance movement to 

provide services to a fence-sitting population. Finally, the resistance may use 

information operations to juxtapose the largess of kleptocratic government 

officials with the plight of the average citizen. Ultimately, whether through 

increasing grievance, resistance opportunity, or both, natural resource 

wealth is a critical factor in both initiating and sustaining a resistance movement.66 As such, UW planners must understand the economic role of natural resources in the operational environment if they hope to maximize the 

potential of any campaign plan. 

Natural Resource Value Chain 

Analyzing the natural resource value chain requires a contextual understanding of the specific natural resource and the resistance movement’s stage 

of development. Specifically, the degree to which natural resources directly 

fund resistance activities is dependent on two criteria: the ‘lootability’ of the 

natural resource and the amount of terrain held by the movement. Natural 

resources offer the resistance movement the most accessible revenue if they 

are easily extracted and monetized, or are lootable.67 For example, alluvial 

diamonds may be more useful for funding an immature resistance movement since they can be mined with artesian tools and are often dispersed 

across a wide geographic area. Conversely, primary diamonds reside in rock 

formations well below the earth’s surface and require significant capital and 

technology to extract them. Only the organization that controls the mine can 

extract these diamonds. This leads to the second dimension: terrain held. 

Unlike some other sources of revenue, natural resources are almost always 

tied to a specific geographic location. For resources that are more difficult 

to loot, such as primary diamonds or oil, the resistance movement can more 

easily monetize those resources if they hold the terrain on which they exist, 

at least for a period of time. The Kurds in Northern Iraq are exemplars of 

this reality. Their control of the northern oil fields provides a significant 

source of revenue for the Kurdish region and fuels much of their autonomy. 

That revenue, however, is limited by their lack of control over the entire 
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monetization process since they cannot efficiently bring their oil to market 

without relying on the Iraqi state-owned oil pipeline. 

The monetization of natural resources almost always begins with the 

inputs necessary to extract the resource. The resources themselves are the 

first and most obvious input into this value chain. Assuming the presence 

of the resource and at least temporary control of the point of extraction, 

harvesting the natural resource requires both human and physical capital. 

In some instances, this may be an unskilled worker putting a chainsaw to 

fall old growth timber in Liberia. Or, it may require significant physical 

infrastructure and technological capability to pull oil from miles below the 

Iraqi desert. The production component of the value chain also differs significantly by resource type. Where production relies more upon technology 

or industrial capacity, the extracting party must possess the ability to operate 

and maintain the equipment. This includes the ability to receive and install 

replacement parts on a routine basis. Where extraction is more labor intensive and less reliant on physical capital, the party extracting the resource 

must be able to produce manual laborers on a daily basis. This may take the 

form of paid work or forced labor. 

For many natural resources, the distribution link in the value chain is the 

most complex. It involves a system of storing, transporting, and trading the 

extracted resource. Many natural resources such as gas, oil, and timber are 

voluminous and cannot be transported or traded immediately upon extraction. As such, the owner of the natural resource must possess the ability to 

securely store the extracted resource. The storage facilities often act as nodes 

in a transportation network and are critical for connecting extraction to 

trade. Regardless of the natural resource, the ability to safely and efficiently 

transport the extracted good to a marketplace is critical. Oil requires pipelines or road networks. Timber relies on roads and waterways. Even precious 

stones like diamonds require a transport mechanism, albeit a smaller one, to 

create value for the extracting entity. Most often, the owner of the resource 

will need to utilize multiple types of transportation infrastructure to get to 

the point of trade. The quality and security of that infrastructure will directly 

impact the cost, and therefore profitability, of their resource. Ease of trade 

also impacts the profitability of natural resources. In some cases, groups 

within a state exchange natural resources for something of value, usually 

cash. However, natural resources are often most valuable in the international 

market. To realize this potential profit, either the buyer or seller must be able 
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to cross the border with the traded good. This requirement may entail the 

permanent control of a legitimate transfer point such as a port, railhead, or 

border crossing point. It could, however, simply require a bribe or coercion 

of an official at one of those points. 

Inputs and Production

The ability to extract natural resources is vulnerable to disruption of both 

physical and human capital. For resources that are difficult to loot, such as 

oil or natural gas, extraction equipment is critical. Destruction of or damage 

to this equipment is potentially disastrous for the owner of the resource. 

Because of the technical nature of this work, this type of resource extraction 

is also heavily reliant on highly trained experts. Preventing those experts 

from providing their knowledge is highly disruptive to this system. Lowtechnology extraction systems are less susceptible to attacks against physical 

capital and more vulnerable to labor disruptions. One might consider the 

diamond mines of western Africa in this case. Because most diamonds are 

near the surface, mining requires little equipment but significant amounts 

of low-skill labor. Shutting off the supply of that labor through organized 

labor strikes or by restricting travel can effectively cease mining operations. 

The natural resource value chain is also vulnerable at storage facilities. 

The longer a resource must be stored, the more vulnerable it is to attacks 

of various sorts. Storage facilities provide a fixed location against which 

an adversary may plan an attack. Once delivery and security patterns are 

established, the problem is simply one of timing and sufficient force. When 

famous criminal Willie Sutton was once asked why he robbed banks, he 

glibly stated “because that’s where the money is.”68 In the same way, storage 

facilities are by definition valuable targets because of their valuable content.

The ability to transport natural resources from the point of extraction to 

the marketplace is possibly the most vulnerable link in the value chain. Most 

obviously, destruction of ports, railways, airfields, and road systems is likely 

to significantly increase the cost of bringing natural resources to market. In 

Iraq, coalition forces spent hundreds of millions of dollars to secure the oil 

pipeline from Kurdistan to Basrah. Where the resistance movement controls 

the transportation infrastructure, they may disrupt the trade of governmentowned natural resources by interdicting shipments. Alternatively, they may 

allow products to transit their area, but only for those willing to pay a fee. 
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The resistance movement faces similar challenges as it attempts to transport resources it extracts. In government-controlled areas, bringing natural 

resources to their point of sale often requires the payment of bribes to corrupt 

government officials. A lack of access to traditional transportation infrastructure may also require significant use of smuggling mechanisms, which 

are inherently less efficient than standard methods. This further increases 

the cost of the traded goods and reduces profit margins. If smuggling is easy, 

the impact is minimal. If it is not, the trade of the resource may no longer 

be a viable funding option. Enhancing and protecting existing smuggling 

routes is critical for the resistance.

Trade, particularly on the international market, is susceptible to border 

security issues and international political action. If traded abroad, the natural resource must pass through one or more border crossing points. These 

form choke points where the government can disrupt resistance movement 

distribution systems either through preventing sales or requiring significant 

bribes. The sale of resources during a time of conflict is also vulnerable to 

international embargos and certification programs. The campaign against 

‘blood diamonds’ from Africa and the oil embargo against Saddam Hussein’s 

regime in Iraq are both examples of this vulnerability. If the international 

community through collective or hegemonic action is able to dry up demand 

for a particular resource, the price of that good may drop below the cost of 

production and ultimately deny any real profits to its owner. 

As a final note, both the resistance and the government must secure 

the natural resource value chain against both external and internal threats. 

On the government side, this requires monitoring its employees at each 

stage of the production process to protect against graph and corruption. 

A recent report by the Nigerian government estimated that it loses more 

than $5 billion per year due to corruption and mismanagement in its oil 

sector.69 Resistance movements are not immune from internal threats either. 

In rebellions of Liberia and Sierra Leone, the organizations took draconian 

intimidation measures to ensure diamond miners did not expropriate their 

finds. As a result of both internal and external threats, monetization of natural resources may require significant security measures to ensure effective 

extraction, storage, transportation, and trade of natural resources. 
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Critical Requirement 4 Summary

As with every other critical requirement, the resistance and the government 

compete with each other to monetize natural resources. While present at 

every stage of the conflict, the manifestation of the competition over natural resources will differ by resource type (lootability) and maturity of the 

resistance movement (terrain held). In its incipient stages, the resistance 

movement will likely hold little to no terrain and therefore will not control 

the monetization process of most natural resources. During these stages, 

the movement will need to focus on disrupting government revenue derived 

from non-lootable sources and monetizing only the most lootable resources. 

The UW practitioner might view these activities as increasing the marginal 

cost of production for the government, robbing them of the profit margins 

they previously enjoyed. This is a more indirect form of competition. However, as it matures and develops the support networks necessary to extract 

less lootable resources, the movement can compete more directly with the 

government for control of the natural resource value chain. In this stage, 

the resistance may control the point of extraction as well as the means to 

bring the resources to the market. With any resource and at any stage of the 

movement’s development, UW practitioners can assist the resistance movement in navigating this critical economic requirement. 

Critical Requirement 5: External Finance

As wide ranging as some resistance revenue-generating activities may be, few 

movements can survive on internal resources alone. In part, this is due to 

the relative privation in which most movements originate. The local population may have little to offer the movement and, other than natural resource 

extraction, internal revenue generation potential may be limited. Not surprisingly, then, today’s most successful movements—from the Islamic State 

to the Ukrainian separatists—rely on a diverse portfolio of both internal 

and external revenue streams.70 In essence, these mature movements have 

mirrored trends in global business—risk mitigation through diversification.71 These highly effective resistance groups are also diversified within their 

external revenue streams. While state sponsorship remains a viable funding 

option, it is no longer the only, or even primary, source of external finance 

for many movements. Increased social and economic connectivity layered on 

a globalized financial system facilitates increased private external support. 
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Almost by definition, every U.S. UW campaign will entail state sponsorship; U.S. advisors will always bring U.S. dollars. This method of acquisition 

is beneficial for the sponsoring state and the resistance for a number of reasons. From the sponsor’s perspective, covertly financing the destabilization of 

an adversary is often more cost effective and politically palatable than overt 

military confrontation. Should such an effort fail, the sponsor retains some 

measure of deniability both internationally and domestically. State sponsorship also provides the sponsor with significant leverage over the movement. 

Resistance movements are unlikely to bite the hand that feeds them. 

State sponsorship is also appealing to a resistance movement. Particularly 

for emerging movements, infusions of relatively easy money can significantly 

increase chances of survival. Early aid tends to help establish viability and 

legitimacy of nascent organizations.72 Although non-state actors and wealthy 

individuals play an increasing role in external support, nation-state budgets 

dwarf those sources, often by factors of 10. Hezbollah would find replacing 

Iran’s assistance, estimated at over $100 million annually, nearly impossible.73

A state’s access to the international financial system offers the resistance 

simple money movement and storage options. Since the money is ‘clean’ as 

it belongs to a sovereign state, many of the laundering actions necessary with 

illicit business operations are unnecessary. 

Despite the obvious advantages of state sponsorship for both the state and 

the resistance movement, UW planners and practitioners should consider 

diversifying the movement’s external support portfolio for several reasons. 

First, few resistance movements benefit from the perception of reliance of 

external masters. It undermines the authenticity of the cause and can poison 

public perception.74 Rather than being a tool of a foreign power, a resistance 

movement financed through donations can claim to speak for the local and 

displaced population. This serves to not only bolster the movement but also 

undermine the legitimacy of the state. Reliance on a single stream of income, 

even from a seemingly reliable source like the U.S. Government, also makes a 

resistance movement more centralized and fragile. Should America’s domestic or international political winds shift, the amount of funds available for a 

given UW campaign may shift with them. Building resiliency into the resistance movement’s external support system can help it withstand short-term 

fluctuations while maintaining capability. Finally, many UW campaigns will 

seek to replace the hostile regime and place the resistance movement into 
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government. Building institutions within the movement that rely on finance 

from private citizens will assist in that transition. 

External Finance Value Chain Analysis

To effectively navigate the external finance terrain, the resistance must generally protect three capabilities to finance its activities: acquisition, transfer, 

and storage of financial assets.75 These requirements, as depicted in Figure 

5, are similar to the inputs-production-distribution critical components 

described in previous sections. Think of acquisition as ‘earning’ the money. 

Non-state acquisition methods, such as remittances, private donations, or 

charities are similar to nonprofit fundraising where individuals or organizations donate out of a sense of allegiance, altruism, or ideology. The resistance 

movement must manage its brand to appeal to its donor base. Transfer refers 

to resistance’s ability take possession of donations from external benefactors. 

This capability could be as traditional as Hawala networks or as modern as 

Bitcoin transfers. The transfer capability also refers to the movement’s ability 

to disperse its funds throughout the organization. Unlike states, resistance 

movements cannot operate on a deficit spending model—their credit ratings 

are a bit low. This implies that movements must finance current operations 

either out of current income or funds stored from previous revenue. For some 

movements, cash or tradable commodities like diamonds or gold are most 

effective. Others will utilize more sophisticated options such as stored-value 

cards or virtual currencies. 

Compared to other critical requirements, the competition for external 

support between the resistance movement and the state is less direct. While 

states, particularly the more unstable ones, do receive foreign support (think 

Iranian support to Syria), most movements and governments appeal to different external audiences. They are not competing directly for the same 

funds. As such, the interplay is more of a cat-and-mouse interaction, with 

the hostile government seeking to deny external funding to the movement 

and the movement attempting to circumvent those efforts. This is essentially 

a unidirectional relationship; the resistance has little ability to deny external 

funding to the existing government. U.S. UW planners and practitioners 

can assist resistance movements in this critical requirement by not only 

providing U.S. Government funds but also by increasing the efficiency and 

resiliency with which it stores and transfers those resources. 
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The remainder of this section will examine requirements necessary for 

the resistance movement to acquire, transfer, and store external financial 

support. Along the way, there will be a discussion of opportunities and vulnerabilities for the UW planner and practitioner to exploit and mitigate, 

respectively. 

UW Planning Considerations

Of the three links in the external finance value chain, UW planners and 

practitioners will be least involved with acquisition. The U.S. Government 

will have already deemed the resistance movement worthy of support, and 

in this sense the movement performed well enough to ‘earn’ U.S. taxpayer 

dollars. But as discussed earlier, UW advisors should also assist the movement in expanding its donor base. As with any fundraising activity, the 

resistance must manage its image, or brand, and strategically communicate 

with potential donors. The rise of the Internet and cellular communication 

facilitates these efforts and means that collecting small donations from thousands of donors is now a viable funding strategy. Much like entrepreneurs 

use crowd-funding for startups, resistance movements today can quickly 

mobilize a diaspora or group of like-minded individuals into a powerful 

Figure 5. External Finance Value Chain. Source: Authors
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funding source. ISIL has mastered this technique over the past two years 

and, as will be discussed later, now has tens of thousands of individuals 

from around the world donating to its cause. The sheer number of supporters reinforces ISIL’s pursuit of legitimacy. While many of ISIL’s tactics are 

morally indefensible, UW planners and practitioners can learn from their 

ability to establish a brand and leverage that brand for financial gain. In this 

regard, U.S.-backed resistance movements can and should follow ISIL’s lead 

as they seek to acquire diverse funding streams.

Raising external financial support is meaningless if the resistance movement lacks the means to take possession of that support. Secure methods of 

transferring funds from the point of collection to the coffers of the movement are critical. As in most value chains, the transfer link is often the most 

complex and vulnerable to disruption. The multiple intermediary entities, 

from witting cash smugglers to unwitting bank tellers, represent potential 

points of compromise in this process. And funds do not need to physically 

change hands to risk seizure. Increasing financial forensic capabilities in 

the global financial system place all digital transfers at risk. Yet, resistance 

movements around the world receive and disperse billions of donated dollars every year. They do so through a combination of some of the oldest and 

some of the newest techniques available. UW planners and practitioners can 

combine their knowledge of new financial technologies with the resistance 

movement’s local area knowledge to develop secure and resilient financial 

transfer and storage capabilities. Importantly, many of these capabilities 

apply to any funds the movement manages. Both old and new financial 

technologies that connect the resistance to external donors will also allow 

the movement to transfer funds within its organization. 

Despite these advances, smuggling bulk cash remains a staple of financial 

transfers to resistance organizations. Cash smuggling offers several attractive 

features for the resistance movement. First, dealing in cash mostly avoids 

the established financial system and its associated evidence trail. This is 

particularly useful in areas with a more developed regulatory system. Cash 

smuggling also affords greater control to the resistance movement. Moving 

money electronically through unwitting banks not only leaves identifiable 

patterns, but it also increases the likelihood of a third party, such as a bank 

manager, noticing unusual activity. Smuggling large amounts of cash, however, suffers from many obvious drawbacks. Smugglers, like all businessmen, 

expect compensation for the risk they assume. Accordingly, maintaining a 
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network of reliable curriers and smuggling infrastructure can, therefore, be 

expensive. And, while risk of electronic detection is minimal, traditional 

border security measures and informants in the network remain a direct 

threat to this method. Well-trained and prepared UW teams will be able 

to assist the resistance movement with best practices to overcome some of 

these challenges.

Where transferring cash or cash-like items is not feasible for security or 

other reasons, the resistance movement must instead rely on a money value 

transfer system (MVTS).76 Most simply, an MVTS is a method of money 

transfer without cash physically moving. These systems can be modern, such 

as global banks, or traditional, such as the centuries-old Hawala system. 

Traditional systems like Hawala often dominate in underdeveloped nations. 

Afghanistan, where the majority of licit and illicit money transfers transit the 

Hawala system, is perhaps the most familiar example. Experts estimate up to 

90 percent of the economy relies on this traditional MVTS.77 Hawala—and 

systems like it around the world—provides the resistance with a compromise 

between dealing with cash and relying on the highly regulated global financial system. For example, numerous groups from organized crime to freedom 

fighters have used import-export laundering schemes to transfer funds. In 

this scenario, an individual who wishes to transfer funds to an organization 

‘sells’ a basket of goods to the organization at significantly discounted prices. 

The receiving organization pays the reduced price via a traditional MVTS, 

provides the seller a receipt, and then resells the goods for a substantial 

profit. This transfer of wealth is essentially impossible to detect in traditional 

MVTSs, particularly if the MVTS conducts a high volume of transactions. 

Across the value transfer spectrum from traditional MVTSs stands a 

group of emerging transfer capabilities. Most, if not all, of these emerging 

capabilities rely on ever growing Internet and cellular phone connectivity 

around the world. Mobile payments via smart phones illustrates this trend. 

Over the past decade, companies such as mPesa in Kenya have grown to 

provide financial services for previously unreached poor communities. Using 

their technology, two individuals with mPesa accounts can transfer money 

via text messages, with the cash available for distribution at any one of the 

hundreds of mPesa carts in the area. Users can establish an account with 

minimal identification, and the transactions are largely untraceable. Appropriately, one expert labeled mobile payments as the “Wild West” of money 

transfers for savvy organizations.78 The Internet, where anything of value 
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may be traded, may offer even more potential for innovative resistance movements. For example, E-Gold Ltd. provides a mechanism for individuals to 

hold accounts denominated in gold and, most relevantly, electronically transfer the value of those accounts to any other account holder. Initially, users 

only needed to provide an email to establish an account.79 While E-Gold 

eventually increased its security measures under pressure from the U.S. 

Department of Justice, it represents the realm of the possible for resistance 

movements of the future.

While traditional storage vehicles such as cash and banks remain vital 

to today’s resistance movements, they represent a shrinking portion of most 

movements’ portfolios. Emerging vehicles such as prepaid cards and virtual 

currencies are beginning to crowd them out. Once the domain of parents 

attempting to reign in their college student’s spending, prepaid cards are 

increasingly used by resistance movements as stores of value.80 These instruments offer the portability of bank accounts and the security of cash. Consider the case of a border crossing. While states limit the amount of cash 

an individual may bring into the country, no such limits exist for prepaid 

cards. And the cards create no signature for the carrier. Illicit organizations 

from Colombian drug cartels to Eastern European hackers demonstrated 

the viability of this method.81 While prepaid instruments offer attractive 

capabilities to a resistance movement, they pale in comparison to the potential of virtual currencies such as Bitcoin. Un- or under-regulated, largely 

anonymous, and decentralized, this innovation in value storage is highly 

appealing to those who wish to remain outside the formal banking system. 

Combined with access to the ‘black’ Internet via anonymity programs like 

The Onion Router, Bitcoin transfers are essentially untraceable. If resistance 

finance is indeed a cat-and-mouse game with the host government, virtual 

currencies represent the smartest, fastest mice out there. UW planners and 

practitioners trained in the latest financial storage instruments could offer 

invaluable capabilities to the resistance movement. 

Critical Requirement 5 Summary

While the landscape of external support to resistance movements is changing, the basic capabilities of finance acquisition, transfer, and storage remain 

unchanged. Even movements supported by the United States, the wealthiest 

nation in the world, must protect these capabilities. Across each, movements 
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increase their survivability by diversifying. Multiple funding sources, redundant transfer channels, and a variety of storage vehicles all underpin financial stability. But, just like any effective organization, resistance movements 

cannot rely on a static portfolio. Rather, they must constantly adapt to changing threats from external parties and exist on the technological edge of the 

financial domain. The UW planner and practitioners may be able to assist in 

this area. Combined with the movement’s local knowledge, the introduction 

of the latest technologies for acquiring, transferring, and storing funds could 

elevate the movement into new levels of effectiveness. 
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4. Applying the Framework to the 

Islamic State 

Throughout this monograph, the authors have used polarizing organizations to illuminate components of their framework: Hezbollah 

provided essential services, Jaysh-al-Madi harnessed the black market, the 

Revolutionary United Front mastered the use of natural resources to fund 

operations. The authors will conclude by applying the entire framework to 

the most dramatic of these exemplars: ISIL. Since its inexorable rise in 2014, 

ISIL has captured the world’s attention. Many young Muslims want to join 

them, military commanders from the U.S. and its allies want to stop them, 

and nearly everyone wants to understand them. The latter seems imperative 

to stopping the first and assisting with the second. By applying our framework, we hope to understand how ISIL came to monopolize violence across 

wide swaths of land in Syria and Iraq. The authors will demonstrate how 

ISIL has navigated the economic terrain to finance its operations and win 

popular support, while hoping to identify opportunities for the U.S. and its 

allies to join UW and economics with ongoing efforts to defeat ISIL.

Applying the operational planning framework to ISIL presents several 

challenges. While the body of knowledge on this group is growing rapidly, 

it suffers from the immediacy of the movement. What we thought we knew 

about ISIL yesterday may not be what we think we know today. This is partly 

misunderstanding and partly a consequence of analyzing an amorphous and 

evolutionary group. But this is often true of today’s operational environment, 

so any proposed framework must be sufficiently robust to explain enigmatic 

and fluid organizations. Additionally, the ISIL case study relies entirely on 

open-source information. Undoubtedly, the vast intelligence resources of the 

anti-ISIL coalition could paint a clearer picture. Using strictly open-source 

information, though, illustrates the validity of the framework. The economic 

terrain of a potential UW operational environment should be discernible 

without significant intelligence requirements—after all, one of the centers 

of gravity is popular support, which depends on open information. Reports 

from organizations like the United Nations (UN), the World Bank, and 

political economy think tanks combined with quality journalism and field 

research should suffice.
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By summer of 2015, ISIL controlled approximately 35,000 square miles 

of ground in northeastern Syria and northwestern Iraq.82 Politicians and 

military leaders continue to search for immediate military actions to stem 

the organization’s push toward Baghdad. While such actions are necessary, 

they are not the focus of this application. Rather, we center on the economic aspects of the anti-ISIL effort and apply a longer time horizon. Some 

operations targeting economic critical requirements such as the sale of oil or 

external financial support may introduce both short- and long-run outcomes. 

Others, particularly those focused on business opportunities, agricultural 

production, and essential services, primarily manifest outcomes months and 

years in the future. The long view of economics is critical, particularly with 

an adversary as resilient as ISIL. Our analysis shows that the neglect of critical economic requirements over time partially precipitated the rise of ISIL 

in Syria and allowed its rapid expansion into Northern Iraq. Recognizing 

this, any hope of long-run stability in the region is predicated on building 

a solid political and economic foundation. Done properly, UW applications 

of economic levers can begin that process.

This application will use our economic framework to understand two 

primary questions. First, what economic factors allowed ISIL to monopolize 

violence in large portions of Syria and Iraq? Answering that question allows 

us to better address the second: How can we use UW to attack ISIL’s critical 

economic requirements and disrupt both their popular support and ability 

to finance their fight? Although traditionally applied against state actors, the 

authors will demonstrate that UW is a viable tool against non-state actors as 

well. This point will be argued, while also recognizing that ISIL’s increasing 

surrogate state requirements make it an ever more appealing UW target. As 

the organization becomes more centralized and state-like, it becomes easier 

to disrupt its critical economic requirements. Finally, the authors recognize 

that the international community is split on the proper understanding of 

ISIL. Some argue it is a terrorist organization possessing some insurgencylike characteristics. Others believe it is an insurgency that uses terrorist 

tactics. ISIL’s name implies it is a state, but they call themselves a caliphate. 

No specific label is particularly useful; ISIL is a resistance movement in full 

maturity, requiring it to perform state-like functions in the territory it holds 

while relying on classic insurgent behavior on its periphery. It is more useful 

to think about ISIL’s areas of control and areas of expansion as its faces different challenges in monopolizing violence in each area. While it can act as 
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a disrupting predator in areas of expansion, it must develop symbiotic, or 

at least parasitic, economic relationships in its areas of control if it desires 

legitimacy as a state. UW attacks against its critical economic requirements 

should aim at disrupting those relationships.

For the purposes of this paper, the authors will not designate a specific 

group to represent the indigenous resistance movement necessary for UW. 

In reality, multiple sub-groups of Iraqi and Syrian society could fill this 

role, from Syrian Kurds to Sunni tribes of northern Iraq. Each group offers 

different advantages and risks to the UW team and the U.S. Government as 

a whole. Regardless of the UW partner, building the movement should be 

done carefully over time. ISIL is likely to threaten U.S. interests well into the 

future, and a correctly built resistance movement will be an asset for years 

to come. Given ISIL’s level of control and demonstrated brutality, early UW 

efforts should most often take an indirect approach, likely executed by the 

resistance movement’s auxiliary arm. Premature direct attacks against an 

organization as capable and ruthless as ISIL could bring a swift death to the 

movement. This chapter will recommend several activities a fledgling movement might use against ISIL to disrupt its critical economic requirements. 

But before discussing UW options, the authors turn first to the rise of ISIL.

Understanding the Economics of ISIL’s Rise

Historical examples provide little insight into the rise of ISIL—its rapid 

growth from a disorganized band of zealots to a multiple state-consuming 

machine with global reach is largely without precedent. Such a rise cannot be 

explained in one dimension; it is not presumed that economic factors were 

the only, or even primary, driver of their ascendency. However, the story 

of ISIL also cannot be understood outside the economic context in which 

the organization crystallized. Similarly, ISIL’s continued warfighting and 

efforts to win popular support rely on the organization’s interaction with 

its surrounding economic environment. Deftness in securing their critical 

economic requirements defines ISIL’s success.

ISIL and the Will of the Population

By late 2007, al-Qaeda in Iraq (AQI), the precursor to ISIL, was on its deathbed. Undoubtedly, the efforts of American and Iraqi SOF explain part of 

that demise. However, foreign forces and Shi’a dominated Iraqi units had 
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been pressuring this group for years. It was not until the Sunni tribes of 

northern Iraq joined the fight that AQI ceased to destabilize the region. 

Ultimately, AQI’s brutal tactics and disregard for the population was their 

undoing. But AQI did not die altogether, and its leadership learned from 

their mistakes in Iraq. When presented with favorable political, military, 

and economic conditions in Syria a few years later, it reinvented itself as ISIL 

and became the juggernaut it is today. In large part, they did this through 

recognizing and ameliorating intense grievances of the population. Seen 

through an economic lens, ISIL rose by taking advantage of shocks in the 

regional agricultural sector and the Syrian and Iraqi regimes’ inability (or 

unwillingness) to deal with the follow-on humanitarian crisis. Today, ISIL 

faces similar challenges in the areas it claims to govern. It relies heavily 

on controlling agricultural production and providing state-like services to 

influence popular support throughout its territory. 

Humanitarian Aid and Essential Services (Critical 

Requirement #1)

The provision of basic life necessities is a core function of any state. States 

that do it well tend to receive popular support from their citizens. Those 

that do not are ripe for civil strife and eventually violent conflict. Such was 

the case in Syria—and to a lesser extent northern Iraq—in 2011. In Syria, 

the devastating drought forced an estimated 1 million people to migrate to 

the periphery of the major urban areas of Damascus, Aleppo, Homs, and 

Latakia.83 Combined with the approximately 1.2-1.5 million Iraqi refugees 

that arrived between 2003 and 2007, such migration resulted in 50 percent 

urban population growth in less than eight years.84 Most of these new urbanites settled in slums on the periphery of the cities, settlements defined by 

a general lack of infrastructure, employment, and security. The population 

shock exacerbated significant failures in the provision of essential services 

in these areas, and rising food and fuel prices only made matters worse. 

Where Assad’s Alawite minority had previously maintained control by redistributing wealth among various ethnic groups, it was unable, or unwilling, 

to meet the increasing needs of the poor, urban Sunnis.85 Once the Arab 

Spring reached Syria and Assad responded with force, ISIL and numerous 

other groups channeled this economic grievance into popular support for 

the rebellion. 
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ISIL is not unique in its ability to use a state’s failures to motivate rebellion. Where ISIL joins rare company is in its commitment of significant 

money and personnel to provide essential services in its territory. This is 

in keeping with its June 2014 announcement of a caliphate and supports 

the organization’s strategy to conquer and govern ever increasing territory. 

Taking a page out of Hezbollah’s playbook, ISIL is intent on maintaining 

existing infrastructure and building new capacities where possible. U.S. 

officials report that ISIL is opening new hospitals and building new roads, 

maintaining traffic police in Raqqa, and even operating a postal system.86 

ISIL has also attempted to manage complex infrastructure such as dams 

and power plants in Aleppo. Recognizing a shortage of high-skilled labor, 

ISIL leader Abu Bakr al-Baghdadi called for scientists, technical experts, 

and doctors to join the organization. Many answered the call, including a 

Tunisian with a Ph.D. who now runs Raqqa’s telecoms.87

But running a government is difficult, and it is not surprising that ISIL’s 

effectiveness in providing state functions is uneven. Reports of soaring 

prices, undrinkable water, and spreading disease in Mosul highlight some 

shortcomings.88 Other reports indicate that while imperfect, the ISIL solution 

is preferable to previous regimes.89 The reports highlight the importance of 

relative deprivation and the role of ISIL as a viable alternative in the provision of social welfare. Given the relative immaturity of ISIL as a ‘state,’ the 

sustainability of any short-run successes are unknown. At a minimum, their 

shortage of government expertise ensures their provision of essential services 

will be a target-rich environment for UW teams.

What is known, however, is the presence of widespread humanitarian 

crises in ISIL’s territory. Decades of poor governance combined with years 

of fighting has left millions of Syrians and Iraqis without shelter, food, clean 

water, and access to life-saving medical care. In some areas, ISIL is attempting to meet these needs internally to build good will with the local population. Their Muslim Services division often provides food, clothing, gasoline, 

or medical services soon after taking new territory.90 Such actions not only 

win popular support but also create dependency on the organization as they 

monopolize the provision of aid. Where ISIL cannot or will not provide 

humanitarian assistance, they often co-opt efforts by external aid organizations to further legitimize the ISIL cause. Aid organizations report ISIL 

militants seizing foreign aid intended for Syrian civilians to redistribute 

as ISIL provided assistance.91 Stealing and redistributing German-donated 
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generators worth $300,000 and a 30-day supply of food for 600 families from 

a large American relief group are just a couple examples of what is believed 

to be a common occurrence.92 Even donations from the USAID and UN 

World Food Program have reportedly been distributed under the black flag 

of ISIL.93 To the extent that it can, ISIL is co-opting these organizations to 

ameliorate grievances and make a profit, simultaneously winning popular 

support and financing its fight. 

Agriculture (Critical Requirement #2) 

Recent research indicates a strong link between failing agricultural production in Syria and Iraq and the rise of ISIL. In Syria, the conditions for this 

ascendency actually began prior to the current regime. In the 1980s and 

1990s, President Hafez al-Assad instituted policies to increase agricultural 

production, in part by introducing irrigation to previously unusable land.94 

While the policies did increase production, they also significantly lowered 

the water table in Syria. As a result, when the worst drought in Syrian history 

hit in 2006, the agricultural system in northeastern Syria’s wheat growing 

region collapsed. The ensuing shortage spiked food prices and made herding, 

which relied on cheap sources of grain, untenable.95 Because Syrian farmers 

relied heavily on the previous year’s yield to seed the next year’s crops, most 

small to medium farms failed. While not as dramatic, the Sunni farmers of 

northern Iraq faced increasing threats to their livelihood during this same 

time period. Since 2003, Iraq has been in a near constant state of drought and 

conflict. As a result, agricultural productivity has decreased by 90 percent 

nationwide, with the rural areas surrounding Mosul being the hardest hit.96 

The contrast of the poor Sunni north with the perceived largess of the Shi’a 

government in Baghdad only exacerbated the growing sectarian tensions. 

While ISIL did not create the droughts in Iraq and Syria, it capitalized on 

the grievances it produced. Both in Syria and Iraq, failure in the agricultural 

sector sowed the seeds of discontent that ISIL would later harvest. 

Since taking control of northeastern Syria and northwestern Iraq, ISIL 

has continued to use agricultural production and food as weapons to control 

the population. According to the UN Food and Agriculture Organization 

(FAO), ISIL-held territory represents 33 percent of Iraq’s wheat producing 

capacity and 38 percent of its barley production capacity.97 ISIL has intermittently controlled over a dozen of Iraq’s wheat silos, including the massive 
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Makhmur silo, capable of holding 250,000 metric tons of wheat—approximately 8 percent of Iraq’s annual production.98 And just as it did with oil 

fields, ISIL avoided damaging the silos they captured, ensuring ISIL’s ability to profit from their seizure. They even established a wheat bureau to 

manage the wheat supply chain from harvest to distribution of flour.99 This 

has allowed ISIL to not only profit from the sale of wheat and flour, but also 

control who has access to food, punishing opponents and winning over 

the Sunni Arab population. In effect, they are gaining support from their 

target population, Sunni Arabs, while controlling the rest of the population 

through hunger and intimidation. Such tactics have become increasingly 

important as crop failure across ISIL territory has increased. In Raqqa, a 

region ISIL has controlled since May 2013, the UN FAO estimates wheat 

production has fallen by 70 percent.100 ISIL responded by reportedly moving 

1 million metric tons of wheat and barley from Iraq to Raqqa.101 Food is now 

a strategic tool for ISIL that allows them to maintain control over the two 

economic centers of gravity. 

ISIL Finance

ISIL’s efforts to win popular support are only possible because of its highly 

developed funding strategy. Estimates of ISIL’s assets vary, but RAND 

researchers estimated the organization held approximately $875 million in 

assets before it took Mosul in June 2014,102 and that was before they seized 

the banks of Mosul and their $500 million in deposits. ISIL’s robust coffers 

are a result of both savvy financing operations and opportunistic behavior. 

Decentralized and highly adaptable, ISIL does not rely on a single source 

of income. Rather it maintains a diverse portfolio, tapping into its various 

revenue streams based on the current operational environment. These varied 

sources include revenue generated from gas and oil, profits from licit and 

illicit businesses, and external funding, primarily in the form of grassroots 

funding strategies and abuse of NPOs. 

Business Opportunities (Critical Economic Requirement #3)

As ISIL has matured and occupied more territory, the organization has 

evolved from predatory economic activity to developing parasitic and symbiotic economic relationships. In areas they control, they have developed 

robust business endeavors as viable alternatives to natural resource revenue. 
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Today, most experts believe those alternative sources represent the majority 

of their income generation.103 Much like organized crime syndicates, most 

of ISIL business ventures are illicit and include bank robbery, trafficking of 

illicit goods, and extortion. Estimates of the economic value of such activities are fraught with uncertainty, but some believe ISIL generated as much 

as $1 billion from illicit activities in 2014.104, 105

If robbing banks is predatory business activity, business has been good for 

ISIL in Syria and northern Iraq. The U.S. Department of the Treasury estimates the organization acquired access to at least $500 million when it seized 

control of banks in Iraq’s northern provinces.106 Similar bank takeovers in 

Syrian cities such as Raqqa and Aleppo have also contributed significantly 

to ISIL coffers. But ISIL is not simply preying on these banks and stealing 

their deposits. Rather, they used them to establish parasitic and symbiotic 

relationships with the local economy. They replaced bank managers with 

ISIL-friendly employees, allowing the organization to levy up to 10 percent 

taxes on cash withdrawals.107 While burdensome to the population, such 

an approach allows ISIL to profit while maintaining some modicum of a 

functioning local economy. 

Along with the sale of illicit oil, ISIL has developed a robust black market 

trade in numerous other ‘goods’ ranging from antiquities to human beings. 

While ISIL gained notoriety for their destruction of ancient artifacts from 

Nimrud and Khorsabad, they have created enormous profits by selling more 

than they destroy. This pragmatic approach is believed to have netted the 

organization tens of millions of dollars.108 Experts believe most of these 

antiquities have been purchased by Turkish middlemen and exited Syria 

and Iraq via the same smuggling networks used to move black market oil. 

ISIL’s willingness to commoditize antiquities is exceeded in audacity only by 

its trafficking and ransoming of human beings. ISIL has executed scores of 

kidnapped individuals, generating enormous international attention. However, ISIL ransoms far more kidnap victims than it kills. Because ransom 

payments are by their nature secretive, precise estimates are elusive. However, experts estimate ISIL has ransomed hundreds of individuals, generating as much as $100 million.109 Even less is known about ISIL’s profits from 

more traditional human trafficking, despite ISIL’s brazen statements about its 

participation in this trade.110 Based on reports of women and children being 

auctioned to ISIL fighters for as little as $13, it is unlikely that such trade 

provides ISIL with significant operating funds.111 However, it may serve as an 
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important recruiting tool and non-pecuniary compensation for its fighters. 

It also intimidates the minority populations from which most of the kidnap 

victims originated. 

As ISIL expanded across wide swaths of land, it did not simply create 

new business opportunities. As this framework would expect, it also established parasitic mechanisms to profit from pre-existing economic activity 

by interjecting the organization into the production and distribution links 

of the value chain. Primarily, this has taken the form of extortion and taxation of the roughly 8 million people living in its territory. According to the 

U.S. Treasury, ISIL extorts “protection” fees for activities ranging from fuel 

sales to school attendance for children.112 Transit taxes, fees paid for the safe 

transport of goods through ISIL-held territory, are believed to create significant revenue for ISIL. Even crossing the border from ISIL-controlled Syria 

to ISIL-controlled Iraq can cost as much as $800 per vehicle.113 Given the 

agrarian population under its control, it is not surprising that ISIL focuses 

much of its extortion efforts on the production of agricultural goods. In 

ISIL’s Syrian capital of Raqqa, the organization demands portions of every 

farmer’s yield as alms, also known as zakat.114 ISIL also reportedly confiscates 

farm machinery and then rents them back to the farmers from which they 

were appropriated.115 Ironically, ISIL has also benefited from salaries paid by 

both the Syrian and Iraqi governments. In Iraq, for example, the government 

has continued to pay state employees in ISIL-held territories. In turn, ISIL 

reportedly levies a 50 percent tax on these salaries.116

Natural Resources (Critical Economic Requirement # 4)

Early in ISIL’s rise, revenue from natural resources, primarily oil, provided 

the foundation of its operating funds. From March 2011 to June 2014, ISIL 

took control of the majority of Syria’s northeastern oil fields, as well as a 

number of fields in northern Iraq. These seizures represent 60 percent of 

Syria’s oil production capacity and 10 percent of Iraq’s capacity.117 Recognizing the relatively low ‘lootability’ of oil, ISIL took the oil and gas fields 

largely intact.118 The organization then managed, through coercion at times, 

the continued extraction of these resources, albeit at diminished rates. At 

its peak, one U.S. official estimated ISIL-held oil fields produced as much as 

55,000 barrels of petroleum per day.119 Importantly, ISIL’s oil production also 

represents decreased revenue for the states it opposed. The Syrian regime 
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suffered the most in this regard, losing approximately half of their pre-war 

annual oil sales.

Of course, ISIL cannot sell oil at market prices. To monetize the extracted 

oil, ISIL must affect its transfer to a black market point of sale. ISIL does so 

by exploiting a well-established and sophisticated smuggling network that 

reaches into Turkey, Jordan, Iraq, and beyond. Reports from 2014 indicated 

ISIL sold crude oil for about $25 per barrel to smugglers who, in turn, would 

sell the oil for $60-100 per barrel upon crossing into a neighboring country.120

One trader estimated that at its height, over 25,000 barrels a day passed into 

Kurdistan alone.121 Since the beginning of the Syrian civil war in 2011, Turkey 

claims to have seized 300 percent more smuggled oil than in pre-war years.122

While U.S. airstrikes and increased anti-smuggling efforts seem to have 

slowed the flow of illicit oil, U.S. Central Command still estimated ISIL’s 

daily oil revenue at $2 million in the fall of 2014.123 Many experts believe this 

is a lower-bound estimate. 

External Support (Critical Economic Requirement #5)

As a fully mature resistance movement, ISIL is a historical anomaly in that 

it is largely self-funded. That does not imply, however, that ISIL receives no 

external support. This form of revenue generation is likely to increase in 

importance as the anti-ISIL coalition degrades the organization’s oil revenue 

systems and as slowing territorial expansion reduces illicit business opportunities. Based on open-source research, the authors find little evidence of 

state sponsorship of ISIL. Instead, ISIL appears to rely on wealthy donors, 

emerging grassroots collections, and manipulation of NPOs as their primary 

sources of external financial support. 

Most experts agree that ISIL’s primary source of external financial support comes from wealthy donors in the Middle East, particularly Saudi 

Arabia and Qatar. Despite efforts by both governments, their citizens are 

believed to have funneled hundreds of millions of dollars to Syrian rebel 

groups in recent years, including ISIL.124 Not surprisingly, ISIL directly targets these primarily Sunni populations with direct fundraising campaigns 

in search of investors. Former NATO Supreme Commander James Stavridis 

claimed that these “angel investors” were of particular importance in ISIL’s 

early fundraising efforts.125 These investors provided the equivalent of seed 
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money for the ISIL start-up, providing it the operating capital to establish 

self-sufficiency.

While “angel investors” were critical early in its existence, ISIL’s explosion onto the international media scene has facilitated the rise of grassroots 

donors through social media and emerging technologies. ISIL’s social media 

savvy is well-documented. Through its media department, Al Hayat Media 

Center, the organization deftly utilizes platforms such as Twitter and diaspora to recruit and fundraise. A recent report by the Financial Action Task 

Force describes a sophisticated ISIL fundraising campaign that illustrates 

the point. According to the report, individuals associated with ISIL used 

Twitter to call for donations, directing interested individuals to contact them 

via Skype. The donor was then instructed to purchase an international prepaid card and send the card’s number to the fundraiser. From there, the 

fundraiser would send the number to an accomplice in a country close to 

Syria that would cash out the card. At that point, it was simply a matter of 

smuggling the money across the border to an ISIL recipient.126 ISIL supporters have also used crowd-funding platforms such as Kickstarter to fund 

projects related to the organization.127 While these methods are unlikely to 

net massive single donations, their efficacy lies in their expansive reach and 

difficulty to stop. 

Witting donors are not the only source of external support to ISIL. Since 

the onset of conflict in Syria, ISIL and other rebel groups have used NPOs to 

divert charitable donations into their coffers. Often, the original donors are 

unwitting to the final destination of their gifts. One report estimates over 

half of all United Kingdom humanitarian donations to Syria via smaller 

charities ended up funding rebel groups, including ISIL.128 ISIL has also 

proven adept at profiting from food and medical aid provided by anti-ISIL 

coalition members. Several reports indicate that aid intended for displaced 

persons in Syria and funded by USAID and other European donors often 

directly benefits ISIL. Aid convoys into ISIL strongholds of Raqqa and Deir 

ez-Zor require ISIL approval and bribes paid to ISIL emirs.129 ISIL also mandates that these organizations employ ISIL-approved individuals on their 

Syrian staffs. 
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ISIL’s Economic Vulnerabilities and UW

To fully assess opportunities to join economics and UW into the broader 

fight against ISIL, we must first step back and identify the organization’s 

economic vulnerabilities in light of objectives and associated strategy. As 

articulated in their publication Dabiq, ISIL seeks to establish a caliphate by 

taking territory through military campaigns and controlling that territory 

with legitimate governance.130 ISIL sees this less as a goal and more as a 

mandate derived from Koranic verses and hadiths. Therefore, ISIL achieves 

legitimacy by maintaining an advancing army and a system of governance 

that provides for its citizens. Failure in either of these domains undermines 

their credibility and erodes their strategic messaging. An effective counterISIL strategy, then, must seek to degrade their ability to project force and 

maintain state-like functions within their zone of control. From an economic 

perspective, these represent this framework’s centers of gravity: the fighting 

force and the will of the population. 

Generating Finance

As was articulated in this framework, maintaining a fighting force and 

providing for the wellbeing of a population require significant financial 

resources. ISIL may not be a state in the conventional sense, but it is vulnerable in many of the same ways. It must pay its fighters and maintain military 

equipment while also providing clean drinking water and trash removal 

services to its constituents. Unlike al-Qaeda and other traditional terrorist 

organizations, ISIL must pay for warfighting and governing functions every 

day. And they cannot run on a deficit like most modern states—they must 

fund current activities out of pocket. Operating on current income and/or 

previous savings makes the organization more sensitive to revenue disruptions. Current U.S. strategy recognizes the importance of ISIL finance, and 

multiple government agencies, including the Department of Defense, have 

taken measures to erode the base of ISIL’s power. A well-trained resistance 

movement could help. 

Denying Profit from Natural Resources

Of ISIL’s revenue sources, its sale of oil seems to be the most easily disrupted 

through UW. The U.S.-led coalition has been attempting to do this via air 
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strikes and increased border security in the region. A capable resistance 

movement could be a valuable addition to this line of effort. To identify how, 

we will consider the value chain for oil production in ISIL-controlled territory. As we apply the value chain analysis to their oil production, various 

vulnerabilities become apparent. First, ISIL’s production of oil relies heavily 

on skilled labor and technologically advanced extraction equipment. UW 

efforts focused on denying either of these critical components would weaken 

the value chain. For example, the resistance force may be able to convince 

skilled laborers, through bribery or intimidation, to abandon their positions. 

Given ISIL’s brutal control methods, such overt resistance may be difficult 

to achieve. It may be more feasible to convince skilled workers to remain in 

their positions but work less effectively, or quietly sabotage the extracting 

equipment. Alternatively, the resistance, with time, could work to place a 

complicit worker in the facility that could accomplish the same objective. 

Even gaining information on the delivery of maintenance parts may facilitate 

interdiction by kinetic operations of the resistance or U.S. airstrikes. 

The resistance could also disrupt ISIL’s distribution of the oil it does 

extract. Because of its belligerent status, ISIL cannot profit from oil without 

relying on the black market and its associated smuggling network. With 

properly placed individuals, the resistance movement could gain access to the 

network and disrupt ISIL oil sales in a number of ways. First, it could simply 

gain knowledge to map the network, enabling other entities to interdict oil en 

route from ISIL’s production points or at border crossing points. Smugglers 

make money by taking risk, and their prices reflect that risk. Increasing the 

risk of death or imprisonment increases the smuggler’s costs and, therefore, 

the prices they charge. Smuggling prices, just like any other good or service, are also information sensitive. If the resistance could run an information campaign that highlights an increasing number of smuggling arrests, 

remaining smugglers would perceive higher risk and increase their prices. 

While this would not stop the smuggling, it would erode its profitability for 

ISIL. Alternatively, the resistance could directly impact the smuggling of oil 

by attacking the smugglers themselves. This is a more direct approach and is 

riskier for the movement. However, such tactics would require ISIL to reallocate resources away from other activities to protect the smuggling routes. 
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Disrupting Business Opportunities

Similar to cutting off ISIL’s oil revenue, the resistance can adversely affect 

other ISIL business opportunities. Because the resistance does not control 

territory and is weak relative to ISIL, it must, at least initially, use predatory 

tactics rather than seek to establish more symbiotic economic relationships. 

The methods could be kinetic but most often will be more indirect. The 

value chain analysis for ISIL’s human and antiquities trafficking businesses 

differs somewhat from that of its oil sales. The primary differences arise 

in the inputs and production methods. There is no requirement for highskilled labor or technical equipment in these businesses. Also, unlike oil, 

their production is decentralized and more difficult to affect. The distribution 

link, however, bears resemblance to the distribution of oil in that it relies 

on smuggling networks. Other than the use of kinetic strikes, most of the 

tactics used for disrupting oil smuggling systems would work against human 

and antiquity trafficking. Primarily, the resistance would be used to gather 

intelligence on smuggling routes and border crossing points to facilitate 

their interdiction. 

In ISIL’s other business activities such as bank seizure and extortion, 

the resistance movement should seek to exploit the areas where ISIL is most 

parasitic and least symbiotic with the local economy. ISIL is most vulnerable 

in those parasitic relationships because the population receives little benefit 

for the fees they pay. For example, ISIL often applies taxes at the distribution 

stage of the value chain, requiring a fee for any commercial vehicles that 

transit its territory. In return, ISIL promises safe passage. The resistance 

could exploit this parasitic relationship in a number of ways. First, it could 

seek to interdict commercial vehicles in ISIL territory. By destroying or stealing the contents of the vehicle, the resistance would undermine ISIL’s image 

of control and encourage businessmen to avoid paying the extortion fees. A 

variant of this tactic could be even more effective. If the resistance posed as 

members of ISIL when they stopped vehicles, they could charge additional 

fees rather than destroying or stealing the vehicle’s contents. This strategy 

is beneficial for several reasons. It would decrease popular support for ISIL, 

discourage the business activity from which ISIL profits, and provide economic incentives for the resistance movement. Similar approaches could be 

used against almost any ISIL extortion scheme that focuses on the distribution link in the value chain. 
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While more difficult, the resistance movement could also disrupt ISIL’s 

business revenue by placing individuals within ISIL-controlled enterprises. 

Businesses that require more high-skilled labor inputs would be the highest priority target. Given Abu Bakr al-Baghdadi’s call for such labor, ISIL is 

vulnerable to such insider attacks by high-skilled labor. The banking sector 

provides a useful example. Banking today is a sophisticated field, relying 

on knowledge of global financial institutions, risk management, and information technology. Because of its technical nature, oversight of banking 

activities by non-experts is difficult at best. If the resistance movement could 

insert a member of its underground or auxiliary into ISIL’s banking system, 

that single individual could create havoc with minimal risk of detection. 

For example, he or she could intentionally leave electronic evidence trails 

of ISIL’s international transactions for U.S. threat finance cells to exploit. 

Or, properly trained, the individual could embezzle money for the benefit 

of the resistance. Even simple procedural changes that make banking more 

difficult or costly for the population could undermine ISIL’s popular support. Other industries that rely on high-skill labor, such as healthcare and 

telecommunication, would be similarly appealing targets. 

Impacting External Finance

In the case of ISIL, a resistance movement would offer little direct benefit to 

U.S. attempts to limit the flow of external finance to the group. ISIL uses a 

decentralized approach to external funding and is not overly reliant on one 

source. Additionally, U.S. threat finance capabilities are some of the best in 

the world, and a resistance movement is not likely to help in that regard. 

However, UW efforts may still be of some value. One area where a resistance 

force might affect ISIL’s external funding network is through muddying the 

ISIL brand. ISIL’s grassroots external funding relies on a belief that it is fulfilling the predetermined will of Allah. As mentioned earlier, this requires 

ISIL to continue its military advance and provide governance for residents 

within its territory. If the resistance movement can cause potential donors 

to view ISIL as failing in either of those endeavors, it may adversely affect 

ISIL’s funding from abroad. Information campaigns from within Iraq and 

Syria that highlight ISIL failures, particularly related to governance, could 

be effective. The resistance movement could film these failures and distribute 
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them via social media. Avoiding the appearance of influence from external 

backers would be critical. 

Using Essential Services and Humanitarian Assistance 

against ISIL

Disrupting ISIL’s revenue stream will most immediately impact its ability to 

make war. Because military defeat represents an existential threat to their 

existence, the organization is likely to respond by prioritizing funding its 

army over any other activity. Governance capacity will almost certainly 

suffer because of this reallocation of financial resources. But simple atrophy 

is not likely enough to separate the population from ISIL’s grip. The U.S. 

should also focus efforts on directly undermining ISIL’s popular support 

by disrupting its governance efforts. Working through a resistance movement may be the only way for the U.S. to do this—U.S. bombs and foreign 

or sectarian armies are not likely to succeed here. Because of their lack of 

experience in social provision, ISIL is highly vulnerable today to resistance 

activity in this domain. 

The value chain analysis for essential services and humanitarian assistance is similar to that of natural resources and business opportunities. We 

can identify ISIL’s vulnerabilities by examining the inputs necessary for 

producing those services, the manner in which they are produced, and the 

methods by which they are distributed to the population. ISIL’s production 

of essential services relies on a combination of high-skilled and low-skilled 

labor as well as physical infrastructure, each of which varies based on the 

service provided. Essential services that depend on high-skilled labor or 

significant physical infrastructure represent the most attractive UW targets. 

Electricity is a good example. In both eastern Syria and northern Iraq, 

hydroelectricity produced at a few key dams dominates the electrical production system. Power generation at these sites relies on significant physical 

infrastructure such as the dam itself, turbine generators, and transformers. 

This infrastructure is useless, however, without engineers capable of operating and maintaining it. Just as with the production of oil, upsetting the 

quality or availability of these inputs can jeopardize the entire system. The 

high-skilled labor necessary for production is susceptible to intimidation 

or bribery. The physical capital is vulnerable to direct attack on the infrastructure itself or the parts needed to maintain it. A resistance movement 
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with access to either of these inputs could directly or indirectly sabotage 

significant portions of ISIL’s ability to provide electricity to residents within 

its territory. Such actions, however, would affect the entire population when 

more selective disruption might be more appropriate. The resistance could 

be more discriminate in its denial of this service by attacking the electrical 

distribution system. For example, it could attack specific transformers or 

power lines that provide electricity to ISIL’s most ardent supporters while 

leaving intact the distribution systems in more contentious areas. Regardless 

of the approach, these tactics are enhanced if the resistance can also provide 

generators as an alternative to ISIL-provided electricity. Where possible, this 

not only undermines ISIL’s legitimacy but also garners popular support for 

the resistance. 

Disrupting essential services is fraught with ethical concerns, and the 

benefit of each action should be weighed against the likelihood of increasing 

human suffering. This is even truer when considering ways to use humanitarian assistance to undermine ISIL’s popular support. As discussed earlier, 

ISIL has used its Muslim services division to address humanitarian crises 

and its associated grievances in its strongholds like Raqqa. It has also coopted NPOs and Western government aid agencies to build popular support. 

While the authors cannot advocate denying this humanitarian assistance 

to the people of Syria and Iraq, the resistance movement may be useful for 

denying ISIL the popular support it seeks from its distribution. Primarily, 

this would take the form of information operations and would consist of 

filming and documenting areas where ISIL’s aid delivery fails. Capturing 

those failures in Sunni Arab neighborhoods, the population ISIL claims to 

champion, would be most effective. Displaying ISIL’s failure on social media 

would undermine both its local and international credibility. Publicizing 

ISIL’s reliance on co-opted aid would also erode its legitimacy. In fact, the 

organization inadvertently did this to itself when photographs surfaced of 

them delivering food aid emblazed with the UN World Food Program designations carelessly covered with ISIL placards.131 Properly publicized by 

individuals with no apparent connection to anti-ISIL forces, publicizing such 

evidence would undermine ISIL’s claims to statehood and the responsibilities associated with it. 
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Agricultural Production and Food Security

ISIL’s rise and continued success are both rooted in the organization’s ability 

to turn agricultural production and food into sources of power. Today, they 

generate significant profit from agriculture and manage the distribution of 

food to control the population. Eroding the power they draw from this critical economic requirement would destabilize both their funding and popular 

support. From a humanitarian perspective, disrupting their distribution of 

food is untenable. However, as articulated in the previous paragraph, information operations highlighting their pernicious use of food as a weapon 

could undermine their legitimacy and popular support. The resistance would 

use similar approaches to documenting and publicizing ISIL’s failures.

The resistance may be able to take a more active role in denying ISIL the 

revenue it gains from agricultural production. While millions of Syrians and 

Iraqis are going hungry, ISIL is reportedly selling wheat and barley on the 

black market, potentially generating tens of millions of dollars.132 For ISIL 

to realize this profit, it must protect the agricultural value chain. The first 

vulnerability in this chain comes from the low-skilled laborers necessary to 

plant, cultivate, and harvest these grains. Because these laborers typically 

live in poverty, the resistance may be able to bribe them into either abandoning the fields or sabotaging crops at various stages of production. Irrigation 

systems would represent high-value targets in drought stricken areas. Similar 

measures might be taken at intermediate processing and storage facilities, 

such as the massive grain silos in northern Iraq. A complicit worker could 

induce widespread wheat rot by simply spraying water into the silos. The 

resistance could also disrupt ISIL’s system of bringing the wheat and barley 

to the black market. This could entail similar counter-smuggling efforts 

described in the previous sections on oil sales. Or the resistance could take 

a more direct approach and attack the grain transporting vehicles after their 

departure from the silo. While more overt and therefore riskier, success 

would offer multiple benefits to the movement, as it would deny revenue 

to ISIL while offering the resistance the opportunity to provide food to the 

population, undermining ISIL’s popular support. 

Summary

ISIL’s current monopoly on violence in wide swaths of Syria and Iraq is 

rooted in and sustained by its ability to win popular support and finance its 
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fighting force. They have secured these centers of gravity by navigating the 

economic terrain better than any other organization in the region. Their 

revenue generation mechanisms are diverse with black market sales of oil 

and increasingly robust business endeavors fueling both their warfare and 

welfare initiatives. Although uneven at times, ISIL’s growing focus on provision of essential services, humanitarian assistance, and food security belie 

its maturation as a movement. However, as ISIL has assumed more state-like 

attributes, it has become more vulnerable to a UW campaign. Its expansive 

military and governance requirements make it particularly susceptible to 

disruptions of its revenue generation system. By indirectly or directly attacking links in the value chains of each critical economic requirement, a resistance movement could begin hollowing out ISIL’s core functions of fighting 

and governing. Combined with ongoing direct military action and political 

initiatives, a UW campaign could lead to the undoing of ISIL. 

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5. Recommendations for Educating SOF 

Many of the ideas put forth in this monograph are not new—the Army 

Special Forces community has wrestled with them for decades. What 

had been lacking, however, was a framework for systematically understanding and planning for the economic terrain in a UW campaign. This monograph built that framework and gave a practical application of its use. The 

next step is educating SOF leaders, planners, and operators in a manner that 

makes them more effective in UW, which can be accomplished through a 

combination of classroom education, planning exercises, and operator-level 

training. 

This monograph’s primary recommendation is the development of a 

course focused on the economics of UW. The Joint Special Operations University and the United States John F. Kennedy Special Warfare Center and 

School would be appropriate hosts for such a course. The curriculum should 

roughly follow the structure of this paper with blocks of instruction dedicated to economic theories of resistance, center of gravity analysis, and the 

five critical economic requirements. The course should rely heavily on case 

studies and application to historical resistance movements. To make the 

experience impactful, students in the course should be required to apply 

the framework to a current scenario, hopefully in their current regional 

area of responsibility. Although the instruction could be open to anyone, it 

would likely be most applicable to SOF leaders and theater special operations 

command planners. 

While classroom education would provide a good foundation for SOF 

leaders and planners, it should only be the first step in building economic 

considerations into UW campaigns. The next logical evolution is incorporating the lessons learned in the classroom into theater campaign plans. As 

these plans are tested in wargaming and simulations, part of their evaluation 

should include measures of effectiveness and performance in the economic 

domain. The process of planning and evaluating operations in light of economic considerations is not a new concept, but the plans and evaluations 

often lack the specificity this framework suggests. Such an in-depth evaluation may require assistance from economists and political scientists from 

outside the command. 
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For SOF operators, UW education and training should grow both their 

understanding of economic terrain in their operational environment and 

the skills necessary to navigate that terrain. On-the-ground advisors must 

possess a basic understanding of the critical economic requirements that 

pertain to their partner resistance force. SOF leaders can facilitate this understanding by incorporating subject matter experts into pre-mission planning 

and training. For example, UW teams preparing for operations in agrarian 

societies would benefit from discussions with experts from the Department 

of Agriculture, USAID, or professors at agricultural institutions like Texas 

Tech University. Similarly, marketing professionals may provide insights into 

branding and strategic communications for startup organizations that would 

be valuable for creating legitimacy for the resistance movement. Regardless of 

the focus, these experts must assist the team in understanding the economic 

terrain specific to the culture in which they will operate. 

Preparation for UW teams should, however, go beyond contextual understanding by including training in specific skills that will allow the teams to 

bring tangible benefits to the resistance movement. This monograph has 

highlighted several skills, ranging from vaccinating animals to cuttingedge money transfer techniques, which may be applicable. Again, subject 

matter experts from both the public and private sectors could be used in 

this capacity. One such example could include bringing experts from threat 

finance teams to educate UW operators on emerging money transfer techniques. Since the Internet and cellphones are nearly ubiquitous throughout the world, teams may be able to assist the resistance movement with 

untraceable electronic dispersion of funds throughout their organization, 

immediately increasing their financial management capabilities. Another 

method for understanding the value chain is to visit government agencies 

and businesses responsible for delivering products and services. Leaders 

from these organizations would be able to explain their value chain, identify 

areas of vulnerability, and describe the challenges they face while providing 

their product. Once identified, SOF leaders should require use of these newly 

developed skills in UW training exercises. 

Conclusion

When the United States launches SOF into UW environments, the teams 

must be prepared for navigating more than just physical terrain. UW is 
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fought on economic terrain as much as any other. In this monograph, the 

authors have developed a framework for systematically building economic 

terrain considerations into the planning and execution of UW. In doing so, 

they made simplifications where necessary and hopefully nowhere else. The 

reality is that, unlike the physical environment, the economic environment 

will change throughout the UW campaign. Such a dynamic environment 

requires leaders, planners, and practitioners to fall back on the economic 

foundations of any successful resistance movement: winning the support of 

the population and financing the fighting force. Denying this to the government or securing it for the resistance movement will determine success in 

the UW campaign. 

Becoming a renaissance man requires the intense study of many subjects 

that provide perspective and expertise for solving difficult, complex problems. Understanding the economic terrain and knowing how to seize that 

terrain in support of a resistance movement is yet another important skill 

for the renaissance man we call a special operator. When the United States 

launches SOF teams into UW environments, the teams must be prepared to 

navigate the physical terrain, and—perhaps now more than ever—they must 

also navigate the economic terrain. This ever-changing economic terrain 

provides tactical opportunities to achieve strategic outcomes using different 

techniques. The good news is operators don’t have to be economists to exploit 

the economic terrain in their favor. This monograph provides a relatively 

straightforward way to think about the economic dimension of UW. The 

framework is robust enough to be used by strategic planners, specific enough 

to be used by tactical operators, and flexible enough to adapt to the inevitable 

changes with the economic terrain. The reality is our adversaries recognize 

and exploit the economic terrain to their advantage. Now is the time for our 

UW planners and SOF to do the same. Hopefully this monograph is a step 

in that direction.

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Appendix A: Acronym List 

AQI al-Qaeda in Iraq

FAO Food and Agriculture Organization (United Nations) 

FM Field Manual

IRA Irish Republican Army

ISIL Islamic State in Iraq and the Levant

MVTS money value transfer system

NPO nonprofit organization

PMESII-PT political, military, economic, social, infrastructure, 

 information-physical environment, time

SOF Special Operations Forces

SWEAT-MSO sewer, water, electricity, academics, trash-medical, 

 safety, other

UN United Nations

USAID United States Agency for International Development

UW unconventional warfare

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Endnotes 

1. The latest draft of JP 3-05.1, Unconventional Warfare, opens with this quote but 

gives little attention to the role of economics in UW.

2. Supporting a nation-state against an insurgency, resistance movement, or terrorists may take the form of foreign internal defense, counterinsurgency operations, 

counterterrorism operations, or stability operations.

3. U.S. Joint Chiefs of Staff, Unconventional Warfare Joint Publication 3-05.1

(Washington DC: U.S. Joint Chiefs of Staff, 24 March 2014), I-1.

4. Ibid., I-2.

5. Friedrich Hayek, Road to Serfdom (Chicago: Chicago University Press, 1944), 2631.

6. Ted Gurr, Why Men Rebel (Princeton: Princeton University Press, 1970), 24.

7. Quoted in Beatrice Heuser, The Strategy Makers: Thoughts on War and Society 

from Machiavelli to Clausewitz (Santa Monica, CA: Greenwood/Praeger, 2010), 

126.

8. Headquarters, Department of the Army, Insurgencies and Counterinsurgencies 

Field Manual 3-24 (Washington, DC: Department of the Army, 2014), 4-3.

9. Ibid., 4-4.

10. Herschel Grossman, “A general equilibrium model of insurrections,” The American Economic Review (1991), 912.

11. Jack Hirshleifer, The Dark Side of the Force: Economic Foundations of Conflict 

Theory (Cambridge: Cambridge University Press, 2001), 10-11.

12. Paul Collier and Anke Hoeffler, “Greed and grievance in civil war,” Oxford 

Economic Papers 56, no. 4 (2004), 588.

13. Paul Collier, Anke Hoeffler, and Dominic Rohner, “Beyond greed and grievance: 

feasibility and civil war,” Oxford Economic Papers 61, no. 1 (2009), 6.

14. James Fearonv and David D. Laitin, “Ethnicity, insurgency, and civil war,” 

American Political Science review 97, no. 1 (2003), 76.

15. David Stoll, Between Two Armies in the Ixil Towns of Guatemala (New York: 

Columbia University Press, 1993), 20.

16. David Kilcullen, Counterinsurgency (Oxford: Oxford University Press, 2010), 

194.

17. Dale Eikmeier, “Redefining the Center of Gravity,” Joint Forces Quarterly 59, no. 

4 (2010), 157.

18. Max Weber, Politics as a Vocation (Philadelphia, PA: Fortress Press, 1965), 1.

19. For a resistance movement, this fighting force need not be, and often is not, the 

actual guerilla fighters. Rather, the force may be underground workers that are 

conducting sabotage, information, or similar non-kinetic operations. For the 

government, the fighting force is essentially all security forces to include police, 
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JSOU Report 16-5

military, and troops used for protection of the ruling party (i.e., the Saddam’s 

Republican Guard).

20. Joseph Strange and Richard Iron, Center of Gravity: What Clausewitz Really 

Meant (Marine Corps War College: Quantico, VA, 2004), 26.

21. Business value chains are a widely used concept to understand business operations, but are typically more robust and complicated than the simplified version 

used in this discussion. The authors felt it more important to reduce the value 

chain analysis to the concepts relevant to UW to more easily identify tactical 

opportunities during operations.

22. Robert M. Solow, “A contribution to the theory of economic growth,” The Quarterly Journal of Economics (1956), 65-94. 

23. James Love, Hezbollah: Social Services as a Source of Power (Hurlburt Field, FL: 

Joint Special Operations University Press, 2010).

24. Philip Nel and Marjolein Righarts, “Natural disasters and the risk of violent civil 

conflict,” International Studies Quarterly 52, no. 1 (2008), 159.

25. Richard Stuart Olson and Vincent T. Gawronski, “Disasters as Critical Junctures? 

Managua, Nicaragua 1972 and Mexico City 1985,” International Journal of Mass 

Emergencies and Disasters 21, no. 1 (2003), 3-35.

26. Linda Polman, The Crisis Caravan: What’s Wrong with Humanitarian Aid? (New 

York: Henry Holt and Co, 2010), 121. 

27. Nathan Nunn and Nancy Qian, “US food aid and civil conflict,” The American 

Economic Review 104, no. 6 (2014), 1660.

28. Polman, The Crisis Caravan, 122.

29. Tor Benjaminsen, “Does supply-induced scarcity drive violent conflicts in the 

African Sahel? The case of the Tuareg rebellion in northern Mali,” Journal of 

Peace Research 45, no. 6 (2008), 830.

30. ‘Nonprofit organizations’ is an umbrella term that includes both charitable 

organizations and nongovernmental organizations. 

31. Financial Action Task Force, “Risk of Terrorist Abuse in Non-Profit Organizations,” FATF Report, June 2014, 37.

32. United States Agency for International Development, “Afghanistan: Education,” 

accessed at: http://www.usaid.gov/afghanistan/education. 

33. The events described here occurred in East Rasheed District, Baghdad, Iraq, 

during Colonel (retired) Peterson’s deployment as commander of 1-14 Cavalry, 

3-2 SBCT from July 2006 to March 2007.

34. J-PAL Policy Bulletin, “Deworming: A Best Buy for Development,” Abdul Latif 

Jameel Poverty Action Lab (2012), 4. 

35. Henk-Jan Brinkman and Cullen S. Hendrix, “Food insecurity and violent conflict: Causes, consequences, and addressing the challenges,” Occasional Paper 

24 (2011), 515.
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36. For example, see: Sylvain Chassang and Gerard Padro-i-Miquel. “Economic 

shocks and civil war,” Quarterly Journal of Political Science 4, no. 3 (2009), 211-

228; and Qeindrila Dube and Juan F. Vargas, “Commodity price shocks and 

civil conflict: Evidence from Colombia,” The Review of Economic Studies 80, no. 

4 (2013), 1384-1421.

37. While global demographic trends point toward a general urbanization of resistance movements, American UW practitioners will most often find themselves 

operating in rural environments. Security concerns largely prohibit foreigners 

from operating in an urban UW environment until the last stages of a full-blown 

insurrection. For an excellent discussion of global trends driving the urbanization of resistance movements, see Kilcullen, Out of the Mountains: The Coming 

Age of Urban Guerillas (Oxford: Oxford University Press, 2013).

38. World Bank Data indicates that 54 percent of the Nigerian population lives in 

rural areas, and UN data estimates that 44.6 percent of those employed work in 

the agriculture field. Assuming all agriculture is rural, that indicates 82.5 percent 

of employment in rural areas is agricultural in nature.

39. “Somalia,” CIA World Factbook, Central Intelligence Agency, accessed at: https://

www.cia.gov/library/publications/the-world-factbook/geos/so.html. 

40. U.S. Department of Agriculture, Food Expenditures Data, accessed at: http://

www.ers.usda.gov/data-products/food-expenditures.aspx. 

41. Ibid.

42. Ibid. 

43. Marco Lagi, Karla Z. Bertrand, and Yaneer Bar-Yam, “The food crises and political 

instability in North Africa and the Middle East,” New England Complex Systems 

Institute (2011), 3, accessed at: http://necsi.edu/research/social/food_crises.pdf. 

44. Robert Taber, M-26, Biography of a Revolution (New York: L. Stuart, 1961), 195. 

See also: Siegfried Hildebrandt, Cuba: The Successful Insurgency (Carlisle Barracks, PA: U.S. Army War College, 1991), 39.

45. U.S. Department of Agriculture, “Agricultural Productivity in the US,” accessed 

at: http://www.ers.usda.gov/data-products/agricultural-productivity-in-the-us.

aspx. 

46. U.S. Agency for International Development, “A guide to Economic Growth in 

Post-Conflict Countries,” USAID Office of Economic Growth, 69.

47. Ibid.

48. Gershon Feder, “Farm size, risk aversion and the adoption of new technology 

under uncertainty,” Oxford Economic Papers (1980), 263.

49. These observations are based on personal interviews with farmers in eastern 

Ethiopia in June 2014.

50. See, for example, Richard Jones, Paula Bramel, Catherine Longley, and Tom 

Remington, “The Need to Look Beyond the Production and Provision of Relief 

Seed: Experiences from Southern Sudan,” Disasters 26, 4.
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51. Darren Hudson, interview with authors, West Point, NY, 8 April 2015.

52. The framework depicting economic relationships as predatory, parasitic, or symbiotic was first articulated in 1988 by Peter Lupsha as described by R.T. Naylor, 

Wages of Crime: Black Markets, Illegal Finance and the Underworld Economy

(Montreal, QC, McGill-Queen’s University Press, 2002), 53.

53. Ibid., 53-54.

54. BBC Business, “ExxonMobil closes Indonesia fields,” 12 March 2001, accessed 

at: http://news.bbc.co.uk/2/hi/business/1216059.stm. 

55. James Goodno, The Philippines: Land of Broken Promises (London: Zed Books, 

1991).

56. Naylor, Wages of Crime, 63.

57. Matthew Rosenberg, “Afghan Companies with Insurgent Ties Still Receive US 

Contracts,” The New York Times, 12 November 2013, accessed at: http://www.

nytimes.com/2013/11/13/world/asia/afghan-companies-with-insurgent-ties-stillreceive-us-contracts.html. 

58. Friedrich Schneider, “Size and measurement of the informal economy in 110 

countries,” Workshop of Australian National Tax Centre, Australian National 

University, Canberra (2002), 1.

59. Philippe Le Billon, Wars of Plunder: Conflicts, Profits and the Politics of Resources

(New York: Columbia University Press, 2012), 1.

60. Ibid., 17.

61. George Mavrotas, Syed Mansoob Murshed, and Sebastian Torres, “Natural 

resource dependence and economic performance in the 1970-2000 period,” 

Review of Development Economics 15, no. 1 (2011), 125.

62. Economists and political scientists have labeled this paradox the “resource curse.” 

The resource curse has both economic and political components. Economically, 

some equate the curse to the so-called Dutch Disease where rapid increases in 

commodity exports leads to an inflation of the local currency, making other 

exporting industries less competitive. It also leads to a general neglect of other 

non-resource related industries, resulting in decreased employment nationwide. 

Politically, the government becomes detached from the population since revenue 

is not tax-based but rather resource-based. Additionally, the massive increases in 

revenue incentivize corruption and graft further disenfranchising the population. 

Paul Collier labeled this curse as a trap that keeps nations from development.

63. Paul Collier, The Bottom Billion: Why the poorest countries are failing and what 

can be done about it (Oxford: Oxford University Press, 2008), 146.

64. Jonathan Winer and Trifin Roule, “Follow the Money: The finance of illicit 

resource extraction,” in Ian Bannon and Paul Collier, eds., Natural resources 

and violent conflict: options and actions (World Bank Publications, 2003), 163.

65. It is worth noting that as a resistance movement matures, it faces many of the 

same resource-induced challenges that a state faces. The movement must protect 
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against corruption, sole reliance on resource revenue, and disconnect with the 

population. 

66. James D. Fearon, “Why Do Some Civil Wars Last So Much Longer Than Others?,” 

Journal of Peace Research 41, no. 3 (2004).

67. Päivi Lujala, Nils Petter Gleditsch, and Elisabeth Gilmore, “A diamond curse? Civil 

war and a lootable resource,” Journal of Conflict Resolution 49, no. 4 (2005), 559.

68. Encyclopedia Britannica Online, “Willie Sutton,” accessed at: http://www.britannica.com/biography/Willie-Sutton. 

69. BBC.com, “Nigeria: ‘Oil-gas sector mismanagement costs billions,’” 25 October 

2012, accessed at: http://www.bbc.com/news/world-africa-20081268. 

70. For the purposes of this paper, the authors consider external finances to be those 

which source is not entirely controlled by the resistance movement. 

71. Craig Whitlock, “Afghan Insurgents’ Diverse Funding Sources Pose Challenges,” 

The Washington Post, accessed at: http://www.washingtonpost.com/wp-dyn/

content/article/2009/09/26/AR2009092602707.html.

72. Daniel Byman, Peter Chalk, Bruce Hoffman, William Rosenau, and David 

Brannan, Trends in outside support for insurgent movements, Rand Corporation 

(2001), 16.

73. Scott Wilson, “Lebanese Wary of a Rising Hezbollah,” The Washington Post, 20 

December 2004, accessed at: http://www.washingtonpost.com/wp-dyn/articles/

A12336-2004Dec19.html. 

74. Michael Freeman, “The Sources of Terrorist Financing: Theory and Typology,” 

Studies in Conflict & Terrorism, 34:6, 470.

75. Stephen Kiser identified the three requirements of earning, moving, and storing 

as they apply to terrorist funding in: Stephen Kiser, Financing terror: an analysis 

and simulation for affecting al Qaeda’s financial infrastructures, Rand Corporation 

(2005), 30. Jodi Vittori modified the framework from “earning” to “acquiring,” 

which is a more useful construct when considering only external support. Jodi 

Vittori, Terrorist Financing and Resourcing (New York, NY: Palgrave Macmillan, 

2011), 26.

76. While we focus on the physical transfer of cash, the same logic applies to other 

physical stores of value such as diamonds or gold. Many of the advantages and 

vulnerabilities remain the same. The primary difference is the reduced liquidity 

of these alternate stores of value.

77. Mary Beth Goodman and Trevor Sutton, “To Stem the Flow of Illicit Drugs from 

Afghanistan, Follow the Money,” Center for American Progress, 17 March 2015, accessed 

at: https://www.americanprogress.org/issues/security/report/2015/03/17/108943/

to-stem-the-flow-of-illicit-drugs-from-afghanistan-follow-the-money/.

78. Danielle Camner Lindholm, and Celina B. Realuyo. “Threat Finance: A Critical 

Enabler for Illicit Networks,” Convergence: Illicit Networks and National Security 

in the Age of Globalization (2013), 119.

79. Vittori, Terrorist Financing and Resourcing, 48.
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80. Lindholm and Realuyo, “Threat Finance: A Critical Enabler for Illicit Networks,” 

118.

81. Ibid.

82. Estimates on the amount of land under ISIL’s control vary based on the definition of “control.” The estimate listed includes areas where ISIL exerts physical 

control over behavior as well as areas free of significant action against ISIL’s 

support activities. For a map reflecting the current span of ISIL control, see 

Institute for the Study of War, “ISIS Sanctuary: June 19, 2015,” accessed at: http://

understandingwar.org/sites/default/files/ISIS%20Sanctuary%20061915_1.pdf.

83. Ali Massoud, “Years of Drought: A Report on the Effects of Drought on the Syrian 

Peninsula,” Heinrich-Böll-Stiftung (2010), http://lb.boell.org/sites/default/files/

downloads/Drought_in_Syria_En.pdf.

84. Colin P. Kelley, Shahrzad Mohtadi, Mark A. Cane, Richard Seager, and Yochanan 

Kushnir, “Climate Change in the Fertile Crescent and implications for the recent 

Syrian drought,” Proceedings of the National Academy of Sciences 112, no. 11 

(2015), 3242.

85. Ethan Kapstein and Amanda Mayoral, “The Economics of the Syrian Conflict,” 

The United States Institute of Peace, 26 February 2014, accessed at: http://inec.

usip.org/blog/2014/feb/26/economics-syrian-crisis, accessed 18 June 2015.

86. Yochi Dreazen, “From Electricity to Sewage, US Intelligence Says the Islamic State 

Is Fast Learning to Run a Country,” Foreign Policy, 19 August 2014, accessed at: 

http://foreignpolicy.com/2014/08/19/from-electricity-to-sewage-u-s-intelligencesays-the-islamic-state-is-fast-learning-how-to-run-a-country/.

87. Mariam Karouny, “In northeast Syria, Islamic State builds a government,” Reuters, 

4 September 2014, accessed at: http://www.reuters.com/article/2014/09/04/

us-syria-crisis-raqqa-insight-idUSKBN0GZ0D120140904.

88. Liz Sly, “The Islamic State is failing at being a state,” The Washington Post, 25 

December 2014, accessed at: http://www.washingtonpost.com/world/middle_east/

the-islamic-state-is-failing-at-being-a-state/2014/12/24/bfbf8962-8092-11e4-

b936-f3afab0155a7_story.html.

89. Karouny, “In northeast Syria, Islamic State builds a government.” 

90. Charles Caris and Samuel Reynolds, “ISIS Governance in Syria,” Institute for the 

Study of War, Middle East Security Report 22, July 2014, 21.

91. Maria abi-Habib, “Islamic State Poaches International Aid for Syrians,” The Wall 

Street Journal, 17 November 2014, accessed at: http://www.wsj.com/articles/

islamic-state-poaches-international-aid-for-syrians-1416158609.

92. Ibid.

93. Julian Pecquet, “Congress Demands Review After Islamic State Food Theft,” 

Al-Monitor, 12 February 2015, accessed at: http://www.al-monitor.com/pulse/

originals/2015/02/congress-islamic-state-un-aid-probe-photos.html#.

94. Kelley, et al., “Climate Change in the Fertile Crescent and implications for the 

recent Syrian drought,” 3241.
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95. Ibid., 3242.

96. Omar al-Shaher, “Iraqi Agriculture in Crisis,” Al Monitor, 29 January 2013, 

accessed at: http://www.al-monitor.com/pulse/originals/2013/01/iraq-farmersabandon.html#.

97. UN Food and Agriculture Organization, GIEWS Special Alert no. 332, 25 June 

2014, accessed at: http://www.fao.org/3/a-i3898e.pdf.

98. Maggie Fick, “Special Report: Islamic State uses wheat to tighten its grip in Iraq,” 

Reuters, Special Report no. 1, 30 September 2014, accessed at: http://www.reuters.com/

article/2014/10/01/us-mideast-crisis-wheat-special-report-idUSKCN0HP12J201

41001.

99. Ibid.

100. As conveyed in Maggie Fick, “Special Report: For Islamic State, wheat season sows 

seeds of discontent,” Reuters, 20 January 2015, accessed at: http://www.reuters.com/

article/2015/01/20/us-mideast-crisis-planting-specialreport-idUSKBN0KT0W4201

50120.

101. Maggie Fick, “Iraq says Islamic State stole 1 million tonnes of grain, took it 

to Syria,” Reuters, 18 November 2014, accessed at: http://www.reuters.com/

article/2014/11/18/us-mideast-crisis-iraq-commodities-idUSKCN0J21F120141118, 

accessed 13 June 2015.

102. Patrick B. Johnston, Benjamin W. Bahney, and Howard J. Shatz as cited in Sarah 

al Mukhtar, “ISIS Finances are Strong,” The New York Times, 19 May 2015, 

accessed at: http://www.nytimes.com/interactive/2015/05/19/world/middleeast/

isis-finances.html.

103. Financial Action Task Force, “Financing of the Terrorist Organization Islamic 

State in Iraq and the Levant (ISIL),” FATF Report, February 2015, 5.

104. Mukhtar, “ISIS Finances are Strong.”

105. In reality, the international community considers all ISIL businesses to be illicit 

as it is not recognized as a legitimate organization. This explains the lack of data 

on legal ISIL business revenue.

106. U.S. Department of the Treasury, press release, “Remarks of Deputy Assistant 

Secretary for Terrorist Financing Jennifer Fowler at the Washington Institute for 

Near East Policy on US Efforts to Counter the Financing of ISIL,” Press Release, 2 

February 2015, accessed at: http://www.treasury.gov/press-center/press-releases/

Pages/jl9755.aspx.

107. Ibid.

108. Heather Pringle, “ISIS Cashing in on Looted Antiquities to Fuel Iraq Insurgency,” 

National Geographic, 27 June 2014, accessed at: http://news.nationalgeographic.com/

news/2014/06/140626-isis-insurgents-syria-iraq-looting-antiquities-archaeology.

109. Jonathan Holmes, “Islamic State hostage ransom demands often met by European governments, expert says; US, UK ‘no-pay’ policies under fire,” ABC 

News, 8 June 2015, accessed at: http://www.abc.net.au/news/2015-06-09/

islamic-state-hostage-demands-met-via-agents-expert/6526802.
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110. ISIL boasted about this in its English language publication, Al Dabiq. “The Revival 

of Slavery Before the Hour,” Al Dabiq, Issue 4, 1435, 4.

111. Paul Wood, “Islamic State: Yazidi Women tell of Sex-Slavery Trauma,” 

BBC News, 22 December 2014, accessed at: http://www.bbc.com/news/

world-middle-east-30573385.

112. U.S. Department of the Treasury, press release, “Remarks of Deputy Assistant 

Secretary for Terrorist Financing Jennifer Fowler at the Washington Institute 

for Near East Policy on US Efforts to Counter the Financing of ISIL,” 2 February 

2015, accessed at: http://www.treasury.gov/press-center/press-releases/Pages/

jl9755.aspx. 

113. Jean-Charles Brisard and Damien Martinez, “Islamic State: The Economy-Based 

Terrorist Funding,” Thomson Reuters, October 2014, 7.

114. Ruth Sherlock, “Syrians explain why business is booming under ISIS,” The 

Business Insider, 8 June 2015, accessed at: http://www.businessinsider.com/

syrians-explains-why-business-is-booming-under-isis-2015-6. 

115. Financial Action Task Force, “Financing of the Terrorist Organization Islamic 

State in Iraq and the Levant (ISIL),” 15.

116. Erika Solomon, “The Isis economy: Meet the new boss,” The Financial Times, 5 

January 2015, accessed at: http://www.ft.com/cms/s/0/b2c6b5ca-9427-11e4-82c7-

00144feabdc0.html#axzz3dNJdiHYW. 

117. Brisard and Martinez, “Islamic State: The Economy-Based Terrorist Funding,” 7.

118. Ariel I. Ahram, “Can ISIS overcome the insurgency resource curse?” The Washington Post, 2 July 2014, http://www.washingtonpost.com/blogs/monkey-cage/

wp/2014/07/02.com.

119. Amos Hochestein as quoted in David Lerman, “Islamic State’s Oil Refining Undercut by Airstrikes: U.S.,” Bloomberg.com, 18 November 2014, accessed at: http://www.

bloomberg.com/news/articles/2014-11-18/islamic-state-s-oil-refining-undercut-byairstrikes-u-s. 

120. Financial Action Task Force, “Financing of the Terrorist Organization Islamic 

State in Iraq and the Levant (ISIL),” 14.

121. Fazel Hawramy, Shalaw Mohammed, and Luke Harding, “Inside Islamic 

State’s oil empire: how captured oilfields fuel Isis insurgency,” The Guardian, 

19 November 2014, accessed at: http://www.theguardian.com/world/2014/

nov/19/-sp-islamic-state-oil-empire-iraq-isis.

122. Nour Malas and Maria Abi-Habib, “Islamic State Economy Runs on Extortion, 

Oil Piracy in Syria, Iraq,” The Wall Street Journal, 28 August 2014, accessed at: 

http://www.wsj.com/articles/islamic-state-fills-coffers-from-illicit-economy-insyria-iraq-1409175458.

123. U.S. Central Command, Release #20140929, 24 September 2014.

124. Lori Boghardt, “Saudi Funding of ISIS,” The Washington Institute, 23 June 

2014, accessed at: http://www.washingtoninstitute.org/policy-analysis/view/

saudi-funding-of-isis.
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125. Quoted in Robert Windrem, “Who’s Funding ISIS? Wealthy Gulf ‘Angel Investors,’ 

Officials Say,” NBCNEWS.com, 21 September 2014, accessed at: http://www.nbcnews.com/storyline/isis-terror/whos-funding-isis-wealthy-gulf-angel-investorsofficials-say-n208006.

126. Financial Action Task Force, “Financing of the Terrorist Organization Islamic 

State in Iraq and the Levant (ISIL),” 24-25.

127. Spencer Akerman, “New Kickstarter Pitch: ‘Join the Syrian Uprising,’” Wired.com, 

21 August 2012, accessed at: http://www.wired.com/2012/08/syria-kickstarter/.

128. Damien Sharkov, “‘Over Half’ of British Donations to Minor Syrian Relief Charities go to Fund ISIS,” Newsweek.com, 21 October 2014, accessed at: http://europe.

newsweek.com/over-half-british-donations-minor-syrian-relief-charities-gofund-isis-278805. 

129. Jamie Dettmer, “US Humanitarian Aid Going to ISIS,” The Daily Beast, 19 

October 2014, accessed at: http://www.thedailybeast.com/articles/2014/10/19/

u-s-humanitarian-aid-going-to-isis.html. 

130. Caris and Reynolds, “ISIS Governance in Syria,” 1.

131. “Photos suggest ISIS rebranding U.N. food aid,” Al-Arabia.com, 2 February 2015, 

accessed at: http://english.alarabiya.net/en/perspective/analysis/2015/02/02/

Photos-suggest-ISIS-rebranding-U-N-humanitarian-aid-.html. 

132. Brisard and Martinez, “Islamic State: The Economy-Based Terrorist Funding,” 8.