IS: the rentier caliphate with no new ideas

The Islamic State group has presented itself as a new Islamic system, radical in its implications for existing regional states. This is part of its appeal.

Abu Bakr al-Baghdadi has claimed caliph as his title and established distinctive institutions in the territories he controls. The calculated cruelty used against those the group has labelled "enemies of Islam" complete the image it wants to project.

However, many aspects of the organisation owe nothing to any distinctively Islamic set of principles. It is a creature of its environment and has much in common with the region's territorial, patrimonial and authoritarian rentier states. This better explains its drive, but also highlights its vulnerabilities.

The IS came to the fore in Syria, but it is in many respects a distinctively Iraqi organisation that emerged from the insurgency that developed after the US invasion of 2003.

More specifically, it is a product of the sectarian politics of Nouri al-Maliki's Iraq. Since 2006, Maliki practised a familiar regional style of government: fuelled by huge oil revenues that he and his cohorts believed were theirs by right, he presided over an authoritarian government that played on his sectarian identity. He favoured those who identified with him and used various sanctions, including violence, against those outside the magic circle.

The IS both mirrors this system of governance and is its outcome. The IS ensures that there should be no challenge to its leadership in the areas that it controls, and uses force to establish new claims over its competitors. It was better organised financially than its rivals, showing an ability not simply to acquire, but also to distribute the money that flowed in.

In doing so, it brought together clusters of disgruntled Iraqis – kin groupings, tribal clans, ideologues, both Islamist and Baathist – from the Sunni Arab northwest of the country. They do not share all of the ideological peculiarities of IS, but they can go along with it to win resources, gain protection and to avoid retribution.

This makes them dependent on IS, with its access to external income and goods, including weapons, seeing it for the moment as better than any available alternative.

As with any rentier state, IS has zealously acquired and guarded the assets that generate money. Most obviously this has been from oil extracted in Syria and in Iraq and sold to areas controlled by the Assad government, across the Turkish border or through middlemen in the Kurdish region of Iraq.

The wells that IS has seized produce only a fifth of their pre-war levels, but in September 2014 they were bringing in a reported $2m a day.

These assets have been supplemented by the vast sums poured into the Syrian conflict by various donors from the Gulf since 2011. Especially in Kuwait, Qatar and Saudi Arabia substantial "private" donations seem to have had official blessing until recently.

The wells that IS has seized produce only a fifth of their pre-war levels, but in September 2014 they were bringing in a reported $ 2m a day.

It was then that adverse US reactions led to moves by all three countries to dissociate themselves from the funds being channelled to the IS.

Additionally, before 2014, extensive kidnapping, extortion and protection rackets had been operating in northern Iraq under the eyes of the authorities, often with their complicity in the corrupt environment created by Maliki's years in office.

Criminal networks, some led by self-styled "emirs" to suggest a spurious Islamic justification for their activities, were drawn into the developing IS network and added to their coffers.

An economy based on tribute and distribution prevails in the territories controlled by IS. Banks, military installations and other assets, both state and private, were looted and "protection levies" imposed on businesses and on transport firms. The same applies to the smuggling of antiquities: direct sales and the sale of "licences" to dig for antiquities provide a steady source of externally generated revenue.

It is clear from this trajectory that for all its denunciation of the territorial nation state, IS has followed its pattern faithfully.

In doing so, however, it has made itself vulnerable in a number of ways.

Firstly, the stated desire to control territory and extend it has led to the obvious visible failures. In the summer of 2014 its advances and the hopeless nature of the Iraqi armed forces were so spectacular that anything seemed possible. But as military opposition hardened, it suffered a number of territorial losses, shrinking its resource base and diminishing its reputation.

Repeated airstrikes against it have shown that its infrastructure is vulnerable to attack and its captured arsenal subject to attrition.

The long-running battle for the Kurdish town Kobane on the Syrian-Turkish border has also shown that the leadership of the group can be mesmerised by the symbolic worth of territory as much as any territorial nationalist.

In the summer of 2014 its advances and the hopeless nature of the Iraqi armed forces were so spectacular that anything seemed possible.

The IS threw huge resources into the battle, yet the purely strategic value of Kobane is minimal, since IS controls the border for dozens of kilometres on either side.

The murderous obsession with territory as a symbol of political prowess has been the downfall of military campaigns in history and seems now to have gripped the IS leadership as well.

But with territory come other preoccupations. About eight million people now live in the lands nominally under the rule of IS. In the Iraqi provinces alone, the pre-war maintenance budget was $2.5bn and even with its resources, IS cannot hope to match this – especially when so much is going into maintaining the wasting asset of its military equipment.

The group is also as vulnerable as any rentier state to concerted action to block its sources of income. US led airstrikes on IS-controlled oil fields, pumping stations and mobile refineries in Syria have been taking their toll and recent Turkish government action against IS oil smuggling routes has also diminished its income.

Under such circumstances, disillusionment thrives. The recent massacres by IS of hundreds of members of the Albu Nimr tribe in Anbar province betray a certain insecurity. The wholesale massacre of a community to deter others was a gruesome feature of Saddam Hussein's statecraft. It seems to be a familiar idiom for IS as well.

This incident and reports of the assassination of leading members of the IS by shadowy organisations in Mosul indicate some erosion of the base. By taking over territory and relying on its inhabitants for support the group gained a constituency – and constituencies have a habit of making their demands known and their grievances felt.

The leadership of the IS has made a point of insisting that it should be known as the Islamic State, denouncing all previous acronyms such as ISIL, ISIS.

Ironically, it is also beginning to discover some of the problems that come with running a state, rather than simply an insurgency. Rampant inflation, dilemmas over fiscal policy, budget deficits, supply shortages, export difficulties, internal policing and external defence, as well as territorial erosion and fracturing social cohesion would suggest that whatever it calls itself, the logic of the territorial state has taken over.