Show Hide image

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.


  • 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


  • 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

Show Hide image

Why Isis seeks a battle with Western nations - and why it can't be ignored

Islamic State believes it must eventually confront and then defeat the West. To get there, it seeks to polarise Muslim and non-Muslim communities alike.

It was precisely the type of attack that had long been feared: a co-ordinated and brutal act of urban warfare that brought Paris to a standstill for more than three hours on an otherwise typical Friday night. Six of the nine attackers had spent time fighting for Islamic State in Syria. Indeed, it was the third act of international terrorism perpetrated by IS in a fortnight, a campaign that started with the bombing of a Russian Metrojet flight over Sinai in Egypt, followed by a double suicide bombing in Beirut that killed 41 people – the deadliest attack in the Lebanese capital since the civil war there ended in 1990.

There are several significant operational observations to be made about what transpired in Paris. The attackers wore suicide belts in which the active ingredient was TATP, a highly unstable explosive based on acetone and hydrogen peroxide. TATP was also used in July 2005 when the London transport network was attacked. Known as the “mother of Satan” because of its volatility, it is usually manufactured at home and it is prone to accidental detonation – or, indeed, sometimes fails to detonate at all.

When two weeks after the July 2005 attacks four bombers attempted to replicate the carnage, their bombs failed to explode precisely because they had not been manufactured properly. The same was true for Richard Reid, the “Shoe Bomber”, and Umar Farouk Abdulmutallab, the “Underwear Bomber”, who smuggled TATP explosives on to American aircraft in 2001 and 2009, respectively.

Perhaps the most worrying aspect of the Paris attacks is that every device proved to be viable – a reality born of the permissive environment in Syria and Iraq. A new generation of terrorists is now able to learn and rehearse the skills required to build devices that detonate successfully. The skills come with experience, and the newly ungoverned spaces of the Levant provide an ideal training ground.

Yet, for all the viability of the TATP devices used in Paris, the greatest loss of life came from assault rifles. This demonstrates how relatively unsophisticated tactics can still achieve mass casualties for terrorists determined to kill as many people as possible. The threat is particularly acute in mainland Europe, where automatic weapons move easily across the Continent, typically originating from criminal gangs in eastern Europe. Smuggling them into Britain is harder because the Channel limits the number of potential entry points.

The added protection resulting from Britain being an island is often overlooked. Just as guns are able to move more freely across the Continent, so, too, can people. This was brought into sharp relief when Imran Khawaja, a British man from west London who joined Islamic State in January 2014, attempted to re-enter the UK.

Khawaja had been particularly cunning. He hoped to slip back into Britain by evading the authorities after faking his own death in Syria, a plan his compatriots facilitated by eulogising and glorifying him. He then made his way across Europe by land, passing through several European countries before being arrested on arrival at Dover. None of this is to suggest that Britain does not face a very serious threat from Islamic State terrorism (it does), but the risks here are diminished compared to the threat facing countries in mainland Europe.


Trying to understand the strategic rationale behind Islamic State’s attacks outside Syria and Iraq is daunting. A degree of conjecture is required, although information gleaned from its communiqués, statements, and behaviour can go some way towards
informing a judgement.

It may seem obvious to observe that IS sees itself primarily as a state, yet this is worth restating, because other jihadist groups have made claims to statehood while continuing to act as terrorists or insurgents, tacitly recognising the nonsense of their own position. Not so Islamic State. It truly believes it has achieved the Sunni ideal of a caliphate and it acts accordingly.

This was the thinking that led the group to break from al-Qaeda, rebuffing Ayman al-Zawahiri’s position as the group’s emir. From Islamic State’s perspective, countries are not subservient to individuals. The significance of this self-belief became apparent last summer when the US began dropping aid parcels to stranded Yazidis who were otherwise starving and dying from exposure in the Sinjar Mountains of Iraq. The US also committed itself to protecting Erbil in northern Iraq by bombing IS fighters who were moving on the city, not least because US diplomats were based there and President Obama could not afford a repeat of the 2012 Benghazi debacle in Libya.

Islamic State responded by beheading its first Western hostage, the American journalist James Foley. Although the video of this was billed as a “Message to America”, it was directed specifically at Obama rather than the American people. In a speech evidently written for him, Foley told viewers that the US government was to blame for his execution because of its “complacency and criminality”.

When Mohammed Emwazi – “Jihadi John” – appeared in Isis videos as executioner-in-chief, he went some way towards explaining those accusations. “You are no longer fighting an insurgency. We are an Islamic army and a state,” he said. “Any attempt, by you, Obama, to deny the Muslims their rights of living safely under the Islamic caliphate will result in the bloodshed of your people.” To that extent, Islamic State has pursued a campaign of retribution over the past 12 months against those it regards as belligerent enemies: the United States, Britain, France, Russia and its regional arch-rival Hezbollah, the Lebanese-based and Iranian-backed Shia militia.

There is an unspoken corollary to this approach, too: that Islamic State wants to make the cost of acting against it so unbearably high that its opponents are intimidated into acquiescence. For all its nihilistic sadism, IS is a rational actor. The group controls a large landmass, enjoys autonomy and makes claims to a revived caliphate. That is a project it wants to continue expanding and consolidating by being left alone to overrun the Middle East, a process that involves massacring minorities, including the Shias, Christians, Yazidis and Kurds.
If the West intervenes in this it must be prepared to face the prospect of mass-casualty terrorism at home.

Some will invariably argue that this is precisely what we should do. Leave them to it: Islamic State may be distasteful, but the cost of acting against it is too high. Besides, we cannot police the world, and what concern is it of ours if Arab societies implode in this way?

This view overlooks a broader (and inevitable) strategic imperative that can never be divorced from Islamic State. The group’s millenarianism and commitment to eschatological beliefs are such that it wants to be left alone – for now.

IS ultimately believes it must confront and then defeat the West in a comprehensive battle between haqq and batil: truth and falsehood. That became clear enough when Abdul-Rahman Kassig (originally Peter Kassig) became the fifth Western hostage to be executed by IS in November last year. The video of his killing was different from those that preceded it and started with the execution of 21 soldiers from the Syrian Arab Army who were fighting on behalf of President Bashar al-Assad.

A short speech by Mohammed Emwazi – again, directed at Obama – noted that the execution was taking place in Dabiq, a town in north-western Syria. The significance of this is not to be underestimated. Dabiq is noted as being the venue of a final showdown between the armies of Islam and those of “Rome”, a reference to the superpower of the day.

“To Obama, the dog of Rome, today we’re slaughtering the soldiers of Bashar and tomorrow we’ll be slaughtering your soldiers,” Emwazi said. “We will break this final and last crusade . . . and here we are burying the first of your crusader army [Kassig] in Dabiq.”

Kassig was branded a “crusader” because he had served in the US armed forces.

That final encounter is not necessarily reliant on Western intervention. Emwazi explained that Islamic State would also use Dabiq as a springboard to “slaughter your people on your streets”. Thus, for Islamic State, a confrontation with the West is inevitable. It would rather be left to consolidate its position for now, but there is no eventuality in which we could expect to escape its sabre-rattling indefinitely.

The religious significance attached to sites such as Dabiq plays a huge role in motivating the fighters of IS. While the world looks on with horrified bewilderment at its rampages, the power of its eschatological reasoning provides some insight.

Writing shortly after Russia entered the conflict, a relatively well-known Dutch fighter called Yilmaz (also known as Chechclear) invoked the importance of end-times prophecies. “Read the many hadith [sayings of the Prophet Muhammad] regarding Bilad al Sham [Greater Syria/the Levant] and the battles that are going to be fought on these grounds,” he said. “Is it not slowly unfolding before our eyes?”

Herein lies the power of Islamic State’s reasoning – its fighters, and the movement as a whole, draw huge succour from the religious importance of the sites around which they are fighting. It serves to convince them of the righteousness of their cause and the nobility of their endeavours.

Faced with a campaign of Western aerial bombardment (albeit one that is limited and unambitious), Islamic State has decided to bait its enemies into fighting it on the ground. To that end, towards the end of the Kassig execution video, Emwazi advises Obama that Islamic State is “eagerly waiting for the rest of your armies [sic] to arrive”.


One final point should be noted about the possible strategic aims of the Paris attacks of 13 November. Islamic State has been dispirited by the mass migration of Syrian refugees into Europe. Instead, it has appealed to them to migrate eastwards, towards the caliphate, rather than into disbelieving Western nations.

In an attempt to dissuade refugees from heading to Europe, IS released a series of videos featuring Western foreign fighters – including some from France – who told viewers how much they despised their home countries. Their message was one of persecution, of Muslims under siege, and of a hostile, unwelcoming Western world.

By way of contrast, they attempted to display the benefits of living in the so-called caliphate, with stilted images of the good life that would make even North Korean officials blush: schoolchildren in class, doctors in hospitals, market stalls filled with fresh produce.

Smuggling fighters into France who had posed as refugees is likely to have been a deliberate and calculating move, designed to exploit fears among some about the potential security risk posed by accepting Syrian refugees. Islamic State likens refugees seeking a future in Europe to the fracturing of Islam into various encampments following the death of the Prophet Muhammad in 632AD. Most of these sects arose from divisions over who should succeed the Prophet in leadership of the Muslim community, but some went into open apostasy.

Viewing events in this way, Islamic State argues that any Muslim not backing its project is guilty of heresy. For refugees to be running from it in such large numbers is particularly humiliating: the group even ran an advert that juxtaposed an image of a camouflaged military jacket alongside that of a life vest. A caption read, “How would you rather meet Allah?”

An article published this year in Islamic State’s English-language magazine Dabiq made this very point. It noted that: “Now, with the presence of the Islamic State, the opportunity to perform hijrah [migration] from darul-kufr [the land of disbelief] to darul-Islam [the land of Islam] and wage jihad against the Crusaders . . . is available to every Muslim as well as the chance to live under the shade of the Shariah alone.”

Islamic State recognises that it cannot kill all of the refugees, but by exploiting European fears about their arrival and presence, they can at least make their lives more difficult and force them into rethinking their choice. All of this falls into a strategy where IS wants to eradicate what it calls the “grayzone” of coexistence. Its aim is to divide the world along binary lines – Muslim and non-Muslim; Islam and non-Islam; black and white – with absolutely no room for any shades of grey.

“The Muslims in the West will quickly find themselves between one of two choices, they either apostatise and adopt the kufri [infidel] religion propagated by Bush, Obama, Blair, Cameron, Sarkozy and Hollande in the name of Islam so as to live amongst the kuffar [disbelievers] without hardship, or they [migrate] to the Islamic State,” says an editorial in Dabiq magazine. “The option to stand on the sidelines as a mere observer is being lost.”


Atrocities such as the Paris attacks are designed to put a strain on the “grayzone”, thereby polarising Muslim and non-Muslim communities alike. Indeed, this is precisely what Islamic State said it hoped to achieve after the Malian-French radical Amedy Coulibaly declared, in a video released two days after his death, that he had participated in the Charlie Hebdo attacks on IS’s behalf. “The time had come for another event – magnified by the presence of the Caliphate on the global stage – to further bring division to the world and destroy the grayzone everywhere,” Dabiq said.

Beyond the tendency of all totalitarian movements to move towards absolutism in their quest for dominance, Islamic State also believes that by polarising and dividing the world it will hasten the return of the messiah. Once again, eschatology reveals itself as an important motivating principle.

This is both a blessing and a curse for Islamic State. Certainly, it is what underwrites its remarkable self-assurance and certainty and at the same time fuels its barbarism. Yet it may also prove to be its unravelling. IS has now attacked Russian and French civilians within a fortnight, killing hundreds. The wider world is finally realising that Islamic State is a threat it cannot afford to ignore.

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

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 19 November 2015 issue of the New Statesman, The age of terror