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Catastrophe averted?

The leaders of the rich countries went to Washington to save the world from sliding into deep recess

Vincent Cable

Shadow chancellor, Liberal Democrats

By the low standards of economic summitry, the G20 meeting rated quite high. There was a predictable, no doubt pre-written, communiqué, full of the usual banalities. And the meeting suffered from the absence of the world's most important politician, who hasn't yet taken up office. But, these necessary caveats aside, there were important achievements.

The first is that the meeting took place at all. The ludicrous pretence of the G8 (or G7) that the old western powers should set the global economic agenda has been punctured for good. On a purchasing power parity basis, China has the second-biggest economy in the world and India the fourth. It has been clear for some time that China is lender of last resort to the global system (by, in effect, underwriting US government paper) and the main source of global incremental demand (and commodity price inflation). The Chinese self-parody as the pupil sitting meekly at the feet of a dominant, but erring, master defies belief. It is obviously right that China, India and the other main non-G7 countries should be at the top table.

The second achievement was the clear realisation that unless governments hang together they will hang separately. Enough has been learned from interwar history for us to understand the follies of beggar-my-neighbour economics. Perhaps a warning shock was being sent across the bows of the incoming Obama administration not to reinvent the protectionist tariffs of the 1930s in a new guise, directed at China or Mexico in particular, or aiming to salvage the US auto industry through public subsidy. But this new-found concern for open markets has not yet communicated itself to EU or Indian or Chinese trade negotiators, who show no enthusiasm for lifting the block on trade liberalisation under the Doha round.

While trade policy is on the back burner, macroeconomic policy co-ordination is not. With a few exceptions - Germany notably - there is recognition of the need for aggressive monetary and fiscal policy and for large-scale intervention to recapitalise banks. These interventions can be and are being undertaken nationally. But governments acting in isolation attract critical attention from capital markets and currency speculators, as Gordon Brown is discovering. Structures like the G20 are the best safeguard against chaotic, unilateral action.

Will Hutton

Economic commentator

It was remarkable to gather so much economic and political power in one room to address a common agenda. That was the good news - along with commitments to co-ordinate fiscal expansion, to expand the lending power of the IMF and World Bank (Japan's $100bn loan to the IMF will increase the Fund's lending capacity by 40 per cent), to boost cross-border supervision, to tackle credit rating agencies, to reassess mad accounting rules and require member countries to attack the bonus culture in the financial services industry. A year ago such an agreement would have been inconceivable.

The bad news is that much of this is shutting the stable door after the horse has bolted. Four things have to be recognised: that the world has profound imbalances between high-saving, high-surplus areas in Asia and the Gulf and low-saving, structural deficit countries in the transatlantic economy (Germany excepted); that a system of floating exchange rates and private banks can no longer take the weight of recycling those savings; that unless the system is de-risked and the burden of adjustment is placed on deficit and surplus countries alike, the global system faces breakdown; and finally, that the business model used by the banks to recycle surpluses - securitisation and hedging in the $360trn global derivatives market - is broken.

In plain English, China must accept that its currency must appreciate; Britain and America, that they cannot run their economies on foreign savings; and all players that there has to be a system of semi-fixed exchange rates between the yen, the euro and the dollar.

One tough reality is that, for all their new economic weight, China, Brazil, Russia and India do not have fully convertible currencies - nor do they want to accept the discipline involved in having convertible currencies.

Ann Pettifor

Fellow, New Economics Foundation

Over the past decade, the Group of Eight leaders turned their exclusive annual meetings into jamborees. Rock concerts, protesters and celebrities added populist glitz. However, the real purpose of the meetings - international co-operation and co-ordination - was ducked. At last year's G8 Summit in Heiligendamm, Germany, George W Bush and Gordon Brown vetoed Angela Merkel's agenda item for co-operation over tighter international regulation and financial oversight of capital markets. That task, they argued then, could safely be delegated to "the invisible hand". Now that the fantastic, self-regulating machinery of free markets has proved grossly malfunctional, it is good to hear talk of enhanced co-operation and regulation.

But, in places, the joint statement issued by the 20 world leaders borders on the delusional. The phrase "We must . . . ensure . . . that a global crisis, such as this one, does not happen again" implies that they are avoiding the next war when they are still losing this one.

Even more questionable is the call for continued "economic growth". In a world of finite resources on a planet with limited capacity to absorb toxic emissions, and with bushfires encircling Los Angeles, we would have hoped that world leaders had some awareness of the threat of climate change and of the limits to economic growth. But no. The gravest threat to global security - our rapacious attitude to the earth's resources - is once again whipped up with talk of "market principles, open trade and economic growth".

Jesse Norman

Senior fellow at Policy Exchange

One might have thought the G20 summit a good moment for some straight talk from the Prime Minister. Instead, the political wind machine was cranked up to full blast. The summit would be a second Bretton Woods. Gordon Brown would forge a new global consensus on co-ordinated intervention to stimulate growth (while, of course, leading reforms to prevent the banking crisis from ever recurring). Luckily virtually none of this was true, or the summit would have been a hopeless failure. With fiscal measures already widely adopted, the G20 hardly needed Brown's leadership. No surprise that he returned empty-handed.

Labour has moved from despondency to a manic desperation to remain in office. The result is that the ever-fragile concept of truth in politics has wholly been cast aside. Thus the humiliating bank nationalisation has been dressed up as an act of far-seeing economic statesmanship. And a sensible warning from the shadow chancellor that current economic policy puts sterling at risk has been condemned for breaching an irrelevant semi-convention dating from the time of fixed exchange rates.

Alex Brummer

City editor, Daily Mail

There is a golden rule of international financial meetings. The larger the "G" number, in other words the more countries involved, the less likely it is that any worthwhile or binding decisions will be taken. So while it was wholly encouraging that the G20 summit brought a number of emerging market leaders to the top table of finance, including China, Brazil and Russia, there was never any real prospect of the event becoming the new Bretton Woods.

Furthermore, the summit took place in the final days of the lame duck administration of George Bush. Once it became clear Barack Obama was going nowhere near the confab, the event became even more of an irrelevance.

European leaders may like to blame Wall Street and Anglo-Saxon capitalism for the credit crunch and the recession now spreading through the Group of Seven like wildfire, but there is no hope of concerted international action without the new White House and Federal Reserve on board.

Almost all that was agreed could have been decided before the leaders left home. The commitment to reviving the Doha trade round is pure motherhood and apple pie. The prairie populists on Capitol Hill are unlikely to be enthusiastic.

At the core of the proposals was the commitment to use fiscal measures, tax cuts and public spending to kick-start global economies. But despite Gordon Brown's enthusiastic embrace of a new Keynesian big-spending approach - as advocated by Nobel prize-winner Paul Krugman - he neatly forgot to mention that such big-spending ways were only for those countries with a "policy framework conducive to fiscal sustainability". The UK with its ballooning budget deficit, which could hit £100bn or more next year, is clearly in no such position.

It is hard to fathom in what way the G20 was "historic", as the Prime Minister claimed in the Commons. There is little original in a bunch of old ideas designed to remove risk from the financial system and control executive pay. That is what regulators should have done before the banks ploughed into the iceberg.

James Buchan

Author and financial commentator

What is the Financial Stability Forum? What is "mitigating against pro-cyclicality in regulatory policy"? What, if anything, has the G20 summit in Washington on the weekend of the 15 November achieved?

Nothing very much, is the answer to all three questions. In the twilight of a discredited US administration, and with President-elect Barack Obama absent, the meeting was never likely to achieve a great deal or generate excitement in the US. Yet the final declaration, drafted with suspicious ease by the delegations on Saturday night, has something for everybody but not enough of anything to scare the financial horses.

Nicolas Sarkozy, the French president whose idea the whole thing was, gained some support for more institutional government of trade and finance, but no super-gendarme international of the type that has been directing financial traffic in the French imagination since the 17th century. As Jean-Pierre Robin wrote in the Figaro: "Those with fantasies of supranational supervision will need to change therapist." The US, jealous of its commercial sovereignty even when it is going about without its shirt, put paid to those Gallic dreams and also gained some platitudes about free trade.

The new commercial powers, not only Brazil, Russia, India and mainland China but also rich oil producers such as Saudi Arabia, received diplomatic recognition of their deep pockets. "The world's geopolitical structure has a new dimension," the Brazilian president, Luiz Inácio Lula da Silva, said. "There is no logic to making any political and economic decisions without the G20 members - developing countries must be part of the solution to the global financial crisis."

I suspect the winner is Gordon Brown. The next meeting will be held under his presidency in London in April. The Washington ragbag of proposals to reform or tinker with the current system, such as reminding us about the Financial Stability Form and mitigating against that regrettable pro-cyclicality in regulatory policy, appeals to his technical vanity and plays to his technical strengths.

Paul Mason

Economics editor, Newsnight

There was a sense in Washington, despite the throbbing engines and bulletproof glass, of powerlessness. The communiqué was stronger on the causes of the crisis than on co-ordinated solutions. Policymakers are right to stay focused on the near-term dangers: these are country-level debt default, the rising cost of borrowing for non-financial companies, rapid job losses and - via feedback - further destabilisation of the banking system. We are moving into the phase of fiscal stimulus but there are powerful technical arguments that say without "quantitative easing" - that is, printing money to stimulate demand - it doesn't work. The same people who told me it would come to recapitalisation, that the TARP (troubled assets relief programme) would not work, are now saying: nationalise the banks and print money.

Despite the urgency of the focus on near-term dangers, what was obvious at G20 was the lack of vision as to the future growth model of capitalism. The problem was seen as a failure of regulation; the solution a pretty weak brew of re-regulation that will get diluted even more as the lobbyists begin to have influence. But the problem is more fundamental: the growth model based on high debt instead of high wages has failed and will be hard to revive.

Peter Mandelson

Secretary of State for Business

We have been caught in a global whirlwind of extraordinary force.

It has brought with it a fear that has gripped the world economy and taken hold here at home. We are seeing it every day, with fear among consumers that is depressing demand; fear among banks that is inhibiting them from lending; fear among small- and medium-sized businesses that banks are just about to cut off their credit lines. The choice facing us and governments around the world is this: do we act decisively to counter and overcome this fear, or do we become paralysed by it and fail to act?

The government has already shown its willingness to take the bolder course as the first mover in setting about stabilising the banks. What is needed now is action to stimulate the demand essential for recovery. The UK economy, like economies in the rest of the world, needs a shot of adrenalin.

The Bank of England has already made a significant cut to interest rates. This monetary stimulus now needs to be matched by a fiscal stimulus. And because this is a global crisis this is best done if the benefit of the measures taken nationally is maximised by the same measures being taken around the world. That was the message from the international conference in Washington, as governments recognised the need to take the action necessary to stimulate their economies.

People will say, "But you are resorting to borrowing in order to deliver the stimulus that's needed." My answer to that is, what is the alternative? We certainly haven't heard one from the Conservatives.

David Cameron and George Osborne, trapped by their desire to oppose everything the government does, refuse to accept the scale of the challenge the world's economies now face and the prescribed international action. Their stance appears to be, if the rest of the world disagrees with us, it is because the rest of the world is wrong. The result is incoherence and an Opposition at sixes and sevens. One minute this is "do all it takes" and the next it is - as we heard this week - leave the recession to "take its course".

Sitting on our hands watching houses repossessed and businesses go to the wall is certainly not the approach being urged on me by people I have been speaking to up and down the country. They want their government to act to stimulate demand in the economy here and now. With all due prudence, that is what we are going to do.

Diane Coyle

Author and economist

The G20 meeting confirmed a robust and rapid response (by past standards) to recession, even in the US operating under a rump free-market administration. Policymakers around the world have been shaken to see the financial system at the brink of collapse - on their watch.

Yet it is difficult to predict how severe the recession will be. Bank lending to businesses and individuals is virtually frozen. In many (but not all) areas of the economy, activity has come to a halt. The last financial boom and bust, ending in 2001, had surprisingly little impact on jobs and growth, as the financial bubble had become increasingly untethered from anything real. Today's vicious circle of evaporating liquidity is much more serious, but lower interest rates and bigger government deficits will help. The underlying trends are easier to outline. Some challenges are clearly unaltered, such as climate change and our ageing society.

The technological opportunities are still there, too, in communications, the internet and biotechnology. Globalisation will be less driven by finance in future, but it will not be unwound. It would take a generation to turn back the clock on economic linkages, and the cultural impacts are permanent. In fact, the crisis has underlined our interdependence across national borders.

What has changed is the political economy of globalisation. In the triad of efficiency, fairness and freedom which dominates political choice in democracies, fairness will take priority in the years ahead, and the drive for ever greater productivity gains will retreat. The semi-nationalisation of the banks has started to shift the boundary between public and private domains; we will have to think more carefully about how to govern private choices that have big social spillovers. The G20 did not touch on this profound question of governance.

Iain Macwhirter

Political commentator

The G20 was largely a throat-clearing session and was never going to put in place the foundations of a new international financial system. Progress on the stalled Doha trade talks is encouraging but provides no guarantee that protectionism will not raise its head in the coming economic slump.

It is inevitable that countries faced with financial collapse will try to defend their economies by any means possible. Britain is already far down the road of "beggar my neighbour" economics by the "managed" devaluation of the pound, a crude attempt to boost UK industry by lowering the prices of British exports and creating a de facto tariff wall around imports from abroad. It won't work because Britain does not make much of anything any more except debt, and the world has plenty of that already.

But the collapse of the pound will seriously damage what is left of UK financial services. No one in their right minds would put money into the UK economy now, with the property market collapsing, UK banks insolvent and government borrowing likely to reach £100bn in the next 18 months.

Gordon Brown seems to believe that sterling is like the dollar, and that people will buy our dud pounds whatever the likely losses. However, as we are discovering, sterling is not a reserve currency and unlike the US we cannot force other countries to pay our debts. The future for our battered island is likely to be hyperinflation punctuated by appeals to the International Monetary Fund for emergency aid. Forget about spending our way out of recession - the UK government simply lacks the resources to fund the huge borrowing that would be required. Something will have to give. Brown will have cause to regret being so beastly to the Icelanders.

Richard Reeves

Director of Demos

James Carville, the hardened political aide to Bill Clinton, said that if he was reincarnated he'd want to come back as the bond market: "You can intimidate anybody." Right now it seems odd to think of any financial markets threatening anybody. But it is one of the ironies of the current economic situation that the capital markets still have some serious muscle.

Western governments, faced with recession, need to throw a lot of money at their ailing financial institutions - money that can be raised only by selling Treasury debt, mostly to the capital-rich investors of the Far East. For Gordon Brown, this is likely to become a more difficult sell, as Prudence is given the push and the pound takes a nosedive. Even national exchequers invite sceptical scrutiny in this new, nervous world.

The financial crisis is at heart a loss of faith. The word credit derives from the Latin credo - "I believe". When the Titanic of the financial world - in the shape of Lehman Brothers - was allowed to sink, the bonds of trust stretching around the world were snapped. In an instant, everyone stopped believing in each other.

A number of sensible measures should be on the agenda when the G20 reconvenes next year, including legislation to ensure bonuses in financial services are paid on the basis of five-year performance; new "pro-cyclical" provisioning rules requiring finance houses to increase their store of capital in economic upturns; and tougher, independent regulation of the rating agencies whose doe-eyed assessments of banks built on a mountain of paper helped get us in this mess.

There is, however, no quick technical fix for such a dramatic loss of confidence. Trust can be lost in the blink of a market-trader's eye - but it will take years to rebuild.

TEN THINGS THEY ACHIEVED

  • 1 Created a road map aimed at stabilising the world economy and overhauling the banking system with targets for the end of March 2009
  • 2 Advocated Keynesian big-spending
    “fiscal stimulus”
  • 3 Expanded from a small club making world decisions to recognise the importance of the economies of Brazil, Russia, India and China
  • 4 Agreed to reform international finance institutions, including better transparency and supervision of credit ratings agencies
  • 5 Agreed that the Financial Stability Forum should include emerging economies
  • 6 Banks and hedge funds to hold increased levels of capital and cash
  • 7 Recommended “supervisory colleges” for all major cross-border financial institutions
  • 8 Return to the Doha round – trade ministers to meet in Geneva next month
  • 9 Instructed G20 finance ministers to draw up plans and timeline
  • 10 Agreed to meet again, in London next April

. . . AND FIVE THEY DIDN’T

  • 1 Agree a future growth model for capitalism. Instead they reconfirmed their “shared belief in market principles”
  • 2 Agree detailed plans for regulatory reforms of banking
  • 3 Establish a plan of action for achieving the already endangered Millennium Development Goals
  • 4 Set up an international supervisory body with sufficient power to control global markets
  • 5 Halt the run on sterling, which fell sharply against the euro and dollar

Alyssa McDonald

This article first appeared in the 24 November 2008 issue of the New Statesman, How to get us out of this mess

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The war within wars

Why the Western-backed assault on Islamic State in Iraq and Syria is failing.

The first signs of a Western-backed attempt to recapture Raqqa, ­Islamic State’s de facto capital in Syria, came a fortnight ago when fighter jets dropped leaflets over the city telling residents to leave. “The time has come,” the warnings read, alongside an illustration of residents evacuating the city as incoming forces overran IS fighters.

Although up to half of Raqqa’s residents fled when IS first took control of the city in 2014, the militants have made it ­increasingly difficult for the people who stayed behind to leave. Following the US-led coalition’s warnings of an impending attack, however, the jihadis relaxed their restrictions on movement. Citizens were allowed to disperse into the nearby countryside. The idea was to spare them whatever onslaught was planned against Raqqa while keeping them within IS territory.

Ever since the latest offensive against IS began in Syria and Iraq in late May, it has become clear that the group will not concede territory easily around Raqqa – or elsewhere. It might lose small villages from time to time, but all of its major urban centres remain well fortified. Few observers expect them to fall any day soon. IS has too much invested in Raqqa, as well as Mosul in Iraq. Occupying the cities fuels the group’s prestige by projecting the impression of ­viable statehood and by allowing it to house fighters and military equipment.

Raqqa is the nerve centre of IS operations. Several training camps are located on its outskirts, including those used to plan attacks against the West. IS has long anti­cipated a revanchist campaign against its Syrian base and has fortified the city by surrounding it with trenches and landmines to thwart any hostile advance.

What makes the fight against IS even more challenging is that its fighters are not easily disheartened. Before this latest campaign, I spoke by Skype to a British fighter from High Wycombe, Buckinghamshire, about how the group perceives territorial losses. He responded with the kind of fatalistic indifference that only the faithful enjoy. Their obligation, he told me, was simply to try their best. The challenge for them was to fight with all they have. Results come from Allah, so, if defeat and setbacks follow, then it is the will of God.

There are two possible interpretations, in their reasoning, for why God might not deliver success for them – because He is punishing or testing them. Either way, the conclusion is the same: to double down on their commitment. In that spirit, they are resolved to fight until victory or martyrdom – and both outcomes represent success. This reasoning shows just how hard it can be to erode the morale of IS’s most doctrinaire fighters (though not all are so zealous in their commitment).

***

The ground push for Raqqa has been overseen by the Syrian Democratic Forces (SDF), which are led principally by the YPG, an ethnically Kurdish unit of fighters concentrated in north-eastern Syria. Although the SDF officially claims to be an umbrella movement for more than 20 different fighting groups – some of which are Arab – its heavily Kurdish composition has made it a reluctant and unsuitable partner in the push to liberate Raqqa.

To understand the reasons why, it is necessary to parse the conflict into its constituent parts. We often hear about the sectarian dimensions of the Syrian civil war, yet this is just one aspect of a much broader tapestry. Syria is a series of wars within a war. Just as there are sectarian components, there are strong ethnic dimensions, too. These are especially pronounced in the northern regions where the Kurds, with their cultural and linguistic distinctiveness, stand apart from their Arab neighbours.

The Kurds have usually formed defensive fighting units in the Syrian conflict, preferring to safeguard and administer their own areas rather than acquire new territory such as Raqqa. Another issue is that Arab ­civilians are reluctant to have non-Arabs push into their cities. The anti-IS activist group Raqqa Is Being Slaughtered Silently (RBSS) says that residents worry about ethnic retribution against an Arab population that is seen as having historically oppressed the Kurds. Many reason that it is better to keep IS and deal with the devil they know.

Those fears are not unfounded. With the horrors of IS and the Syrian army so magnified, it is easy to forget that every fighting group in this conflict has violated human rights and continues to do so. The Kurds are no exception; in October, Amnesty ­International accused Kurdish fighters of war crimes after they razed Arab villages in al-Hasakah and al-Raqqa Governorates. All of this adds to the intractability of the war, forcing people to seek security within their communal, sectarian or ethnic circles. Syrians are hardly unique in this respect; they are merely repeating a pattern of countless conflicts around the world.

This makes it extremely difficult for the West, which is reliant on local forces to do the fighting. The US is supporting al-Hashd al-Shaabi (meaning “popular mobilisation committee”), a nominally Iraqi force leading the assault against IS in Fallujah. Iraq’s prime minister, Haider al-Abadi, has made two main claims about al-Hashd al-Shaabi: that it is a non-sectarian movement of ordinary Iraqis from all sections of society who want to drive IS from the country, and that its leadership reports to him personally.

Neither of these claims is accurate. It is true that some divisions of al-Hashd al-Shaabi comprise Sunni fighters, but it is overwhelmingly dominated by Shias. Its military campaigns are directed not from Baghdad, but Tehran. These efforts are overseen by Qasem Soleimani, a celebrated Iranian major general in the elite Quds Force, who is perhaps the most important military official with a battlefield presence in Syria and Iraq. He previously orchestrated several successful campaigns for President Bashar al-Assad and the al-Abadi force.

Though the ongoing assaults on Raqqa and Fallujah have put IS under pressure on two fronts, anyone hoping this might signal a turning point in the conflict is likely to be disappointed. For every push that shunts IS backwards – often only marginally – many new recruits are spawned.

Videos released on social media from the latest assault on Fallujah appear to show how incoming Shia fighters have beaten and tortured Sunni civilians. The pictures of abuse are overlaid with sectarian slurs, often invoking sensitive points of disputed Sunni/Shia theology. These resound across the region and arguably do even more damage than the images of abuse.

The rapid deterioration in sectarian relations that followed the 2003 invasion of Iraq explains how IS was able to capture Sunni areas of Iraq with such ease. Ordinary residents do not necessarily agree with the authoritarian strictures of its regime, but they mostly understand them. These latest outrages from incoming al-Hashd al-Shaabi fighters will only fuel the belief among Sunnis that they are best served by Sunni administrations – however brutal.

Islamic State has repeatedly invoked the vulnerability of the Sunnis across the Levant to justify its violence. This is the constituency in whose name it claims to act and whose interests it claims to defend.

Shortly after IS first captured Mosul, in June 2014, the group released a video, aimed at Iraqi Sunnis, explaining how both the West and Iraqi Shias had conspired against them in 2003. The result had been a decline in Sunni fortunes and increased insecurity as Shia death squads sought revenge after decades of repression and abuse.

This resonated strongly with Sunnis such as the Albu Mahal and al-Qa’im tribes, which had supported the US-led “awakening”, a military strategy initiated in 2005 to encourage Sunni Iraqi tribes to fight against the insurgency initiated by al-Qaeda. IS captured the heads of those tribes and forgave them for fighting alongside the West against al-Qaeda in Iraq. We are not accustomed to seeing videos of IS pardoning captives, but this was as careful and calculated as any of its ultra-violent theatre. The exercise was designed to project the group as a bastion of Sunni honour and security.

That is the story behind so much of IS’s strength today: the fears of the vulnerable Sunni poor over whom militants govern. Remove that constituency, and the group would collapse. But the Obama administration has done little to allay Sunni fears. Rather, it has exacerbated them by launching air strikes against IS targets in Fallujah, fuelling a perception that it is working hand-in-glove with Shia militias loyal to Iran.

***

The latest attempt to seize IS terri­tory points towards a more pressing question: what, actually, is Islamic State? During a recent meeting at the Foreign and Commonwealth Office, one analyst brilliantly described the mercurial nature of the group. To residents of Raqqa, it appears as a proto-state, replete with all the nomenclature of statehood: an executive, judiciary, police force and civil administration. To rebel groups in the north and for President Assad in Syria, it is more of an aggressive insurgent movement with which there are periodic battles for control of land. For the French and Belgians, it feels more like a conventional terrorist group that deploys suicide bombers and gunmen to kill as many civilians as possible.

Such is the kaleidoscopic nature of IS that there is no reason why it cannot assume multiple forms at the same time, or why it can’t move from one to the other. If the territory in which it operates is overrun, it will revert to being a conventional terrorist movement that unleashes waves of attacks against the West and others. IS has already demonstrated both its willingness and ability to strike in Europe, Egypt, Lebanon, Saudi Arabia, Tunisia and Turkey.

It now also appears an American man, Omar Mateen, self-identified with Islamic State and affiliated himself to the group in order to carry out the most deadly act of US domestic terrorism since the 11 September 2001 attacks. Mateen killed 49 revellers, and injured more than another 50, at a gay bar in Orlando, Florida, on 12 June. The ability of individuals to align themselves with IS despite having no tangible links to it underscores the difficulties of acting decisively against the group. Indeed, this is precisely what IS has advocated. A few days ago, its official spokesman, Abu Muhammad al-Adnani, repeated his call for individuals to launch attacks in the West on the group’s behalf. Following the Orlando massacre, supporters have already suggested copycat attacks in Paris, London and Washington.

By way of comparison, let’s consider what al-Qaeda looked like on the day after the 9/11 attacks. What the West faced was a small group – of perhaps 500 key individuals, if we’re generous – committed to its programme of global jihad. By contrast, even conservative estimates today place ­Islamic State’s manpower somewhere in excess of 20,000. And no one has yet convincingly addressed how to mitigate the threats that will emerge from the region should IS suffer a sudden loss of territory.

IS’s control of large parts of Syria and Iraq will not end quickly. Not only is the group embedded and emboldened, but it enjoys the strategic advantage that comes with being able to operate across two (however nominally) sovereign states. In that respect, the Syrian and Iraqi crises embody all the difficulties of the last hyphenated conflict of the past decade, the so-called challenge of “Af-Pak” (Afghanistan and Pakistan). There, the US found that whenever it pushed against Taliban fighters in Afghanistan, they disappeared over the border. When Pakistan did the same, insurgents moved the other way.

Many of the same issues undermine Western-backed attempts to eradicate IS today. When it allowed civilians to move from Raqqa into the countryside, its own families, fighters and supporters were moved
as well. It has also begun moving critical personnel and heavy arms out of Raqqa, repositioning them near the Iraqi border. In the unlikely event that its operations in Syria are severely compromised, it will fall back into its Iraqi hideouts, and vice versa.

Pressuring IS, therefore, is like squeezing the air in a balloon: push on one area and it moves to another place. In Syria, even as IS militants fight to defend their territory in Raqqa, they have made gains in the ­Aleppo Governorate, moving ever closer to the strategic town of Azaz. Whoever controls Azaz also controls the nearby Bab al-Salam border crossing with Turkey, an important source of revenue and influence. IS previously occupied Azaz but abandoned it in 2014 to consolidate its control in Raqqa. That the group is close to recapturing Azaz at a time when the Obama administration wants to suggest that IS faces an existential crisis shows just how fissiparous and ­intractable this conflict remains.

Shiraz Maher is an NS contributing writer and the deputy director of the International Centre for the Study of Radicalisation at King’s College London. His book, “Salafi-Jihadism: the History of an Idea”, is newly published by C Hurst & Co

Shiraz Maher is a contributing writer for the New Statesman and a senior research fellow at King’s College London’s International Centre for the Study of Radicalisation.

This article first appeared in the 16 June 2016 issue of the New Statesman, Britain on the brink