UN: Setbacks haven't weakened Islamic State strategically

UNITED NATIONS — The Islamic State extremist group hasn't been weakened strategically or irreversibly despite military setbacks in Iraq and Syria, the UN political chief said yesterday.

Undersecretary-General Jeffrey Feltman told the UN Security Council that the threat posed by IS and its associates "remains high and continues to diversify," and the flow of arms and ammunition into territory held by the group remains a serious concern.

He said the military setbacks in Syria and Iraq, where IS controls significant swathes of territory, "could be one of the factors behind the marked increase in the rate of returnee foreign terrorist fighters."

As a result of the setbacks, Feltman said, IS may also be moving to a new phase, elevating the role of its affiliates, moving funds out of conflict areas, "and increasing the risk of complex, multi-wave and international attacks."

He was presenting Secretary-General Ban Ki-moon's report on IS activities over the last four months.

For the first time since the declaration of its "so-called Caliphate" in June 2014, the report said the group is under financial pressure with international air strikes reducing oil production by between 30 and 50 percent.

IS is trying to compensate for lost oil revenue by intensifying efforts at "taxation" and extortion, Feltman said.

The extremist group is also getting an unknown amount of revenue from smuggling antiquities, not only from Syria and Iraq but possibly from Libya and Yemen as well, he said.

The report emphasizes that IS may attempt to generate revenue from kidnapping international hostages, moving funds internationally through formal and informal channels, and converting local currency into gold or other commodities which can be moved around the world easily, Feltman said.

He said significant numbers of "foreign terrorist fighters" continue to travel to join IS in Syria and Iraq, often using indirect journeys and false or stolen travel documents.

The report stressed the risks that returning IS fighters pose to regions such as southeast Asia and countries such as Libya, Feltman added.