The defeat of Daesh in Syria should be celebrated, but the world should be cognizant that the next manifestation of Daesh could lead to a global wave of terror.

The 'Islamic State' (Daesh) no longer controls any Syrian territory following the recent “liberation” of Baghouz, a small village near the Iraqi border. Daesh losing its last pocket in Syria is significant considering that by 2015 the so-called Caliphate occupied roughly one-third of the country—including most of Deir Ezzor, sizeable parts of Aleppo, Raqqa, Homs, the province of Idlib, and an area south of Damascus. 

Although Daesh’s loss of its last Syrian stronghold deserves celebration, it is premature to conclude that the extremist group has been obliterated in Syria.

Even though a diverse host of state and non-state actors fighting Daesh since 2014 effectively destroyed its state apparatus, the group’s loyalists retain their ability to shape the future of Syria. 

Daesh members will still seek to continue terrorising Syrians and spilling blood across the country via sleeper cells that carry out suicide bombings, targeted assassinations, and other deadly acts aimed at advancing their apocalyptical vision. Given the estimates that tens of thousands of Daesh sympathisers remain in Syria, it is difficult to imagine the group not returning to their insurgent roots from the period that followed the US-led invasion and occupation of Iraq in 2003 when al-Qaeda in Iraq (Daesh’s predecessor) was born.

Despite Daesh falling from power in Baghouz, the group’s ideology will remain influential in Syria and the greater region. As long as the grievances that created the conditions necessary for the group’s meteoric ascendancy are still in play, along with the realities and conditions of day-to-day life for many Sunni Muslims in the country, there will be fertile ground for “Daesh 2.0” to rise. 

Unquestionably, the remnants of Daesh remain determined to push ahead with their agenda. From the perspective of these extremists, the fall of the 'Caliphate' that achieved its power in 2014 is just a temporary setback. In fact, shortly before Daesh lost Baghouz, the group released an audio recording declaring that Daesh was not over and that its fight would continue. Those committed to thwarting the ascendancy of a “Daesh 2.0” must avoid underestimating the power of the group’s uncompromising ideology and its willingness to engage in acts of utter brutality merely to stay relevant.

Beyond ideology, Daesh continues to have vast financial resources and facilitators at its disposal despite no longer governing a de facto state in Syria or Iraq. Still in place is an “economic empire” that enables the group to continue functioning as a “financial powerhouse” with access to large amounts of money that can be used to keep fighters loyal to the group. 

According to an estimate from independent experts, the Daesh soldiers who recently retreated from their strongholds left with approximately USD 400 million in Western/Iraqi currencies and gold coins, which the group stole from banks or obtained via criminal enterprises. Intelligence officials also maintain that Daesh leadership has laundered tens of millions of dollars by making investments in legitimate business entities in countries across the region ever since the group’s hold on territory in Syria and Iraq began weakening.

Debatable is whether Daesh can raise more money today, or during the days when it governed a de facto state in eastern Syria and western Iraq. While its loss of territory has made it more challenging for them to depend on major revenue sources (direct taxation, fees, and fines levied from its subjects and exploitation of natural resource wealth—namely oil—of the land under its rule), without ruling territory under a state structure, Daesh can allocate more funds toward terrorism instead of the costs of governance. 

Furthermore, given that Daesh maintained thorough records about the millions of Syrian and Iraqi nationals living under their territory during its years in power, the group can possibly use these records to extort, blackmail, and forcibly obtain money from those Syrians and Iraqis as a source of revenue, not unlike how the mafia or other organised crime groups generate funds.

At this juncture, as Syria lacks any credible peace plan that the major parties in the civil war agree on, there will likely be many social, political, and economic crises in the country far into the post-conflict period. Such tensions and sources of anger will inevitably exacerbate longstanding problems which initially gave rise to Daesh. These dynamics in Syria, which remains in ruins amid the absence of political legitimacy in Damascus, ensure that the group, or others like it, will have fertile ground to exploit.

What happens next in Baghouz and other areas of Syria liberated by Daesh’s enemies will profoundly impact the country’s future. Ultimately, to remove the conditions that Daesh exploits for its own gains, there will have to be a solution to the crisis of governance in the country that is based on a new order that rests on legitimacy. 

Yet with the most influential Syrian and non-Syrian actors in the country having different views of what this new order must look like, the war-torn country may well remain in a state of violent turmoil for years to come. Within this context, ex-Daesh soldiers who blend in with local populations and maintain their network of sleeper cells throughout Syria will remain heavily armed and constitute a grave danger to Syria notwithstanding the symbolically significant liberation of Baghouz.

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