The insurgency in Iraq is encountering a major obstacle, but not due to Saddam's capture, or the prospect of an upcoming trial; these will not significantly alter the course of an insurgency that already suffers from a number of congenital weaknesses. Insurgencies require a few key elements for survival: popular support, money, weapons, and a safe haven for planning activity. In Iraq, money is perhaps the most important tangible element - it's required for the purchase of weapons, supplies, and the payment of men willing to carry out attacks on Coalition forces.
Today the old Iraqi form of currency - often called the Saddam dinar - expires. A substantial portion of the Iraqi insurgency's funding is thought to come from the Hussein regime's stockpile of cash, in the form of old Saddam dinars and counterfeit bills. In order to avoid the demonetization of their hidden wealth, the remaining elements of the regime will have to exchange their Saddam dinars for the new dinars at Coalition-controlled banks. Needless to say, it would be very awkward for any of the remaining Baath-party loyalists to show up at a bank to exchange millions of dollars worth of Saddam dinars. Even bank managers sympathetic to the insurgency would be compelled to report such a transaction.
Leaders of the insurgency, thought to be Baath-party loyalists, pay young male Iraqis and possibly jihadists from outside Iraq anywhere from $150 to $1000 per attack. This is a considerable amount of money in a country where the average monthly household income is less than $80. Saddam's capture with 750,000 U.S. dollars further emphasizes the importance of cash to this insurgency.
General John Abizaid, the commander of all Coalition troops in Iraq, was quoted in the Financial Times as saying, "In most of the cases of direct-fire engagements that our troops have, they find very young men who have been paid to attack our forces." Recently these attacks have concentrated on military convoys delivering money to banks, including the massive attack at Samarra on November 30, where Iraqi guerrillas ambushed American troops delivering new dinars. These types of ambushes have taken place at least six times in the past several weeks, excluding the Samarra attack. If insurgency leaders do not find a new source of money, they will no longer be able to pay their forces.
Because of the underlying ethnic conflict between the minority Sunni Arabs and the rest of Iraq, and their perceived loss of power since the fall of Saddam, this insurgency is not going to disappear overnight. It is instead being transformed by a lack of money and battlefield casualties as the coalition develops its counterinsurgency tactics. The insurgency will evolve into a mafia-type organization where politically motivated attacks will be supplanted by criminal fundraising activities.
The insurgency will be forced to resort to organized-crime-style methods: bank robbery, protection rackets, kidnappings for ransom, and extortion. International terrorism is another financing option for the insurgency; there are reports that al Qaeda is shifting its funding priority from Afghanistan to Iraq. Both Iran and Syria historically have funded terrorist movements as well.
Chronic instability in the Sunni/Baathist triangle also will discourage foreign investment, affecting economic development. Most likely, very little foreign investment will find its way into the dangerous and lawless Sunni Arab homeland. Iraq will eventually experience an economic rejuvenation, but if the violence is not controlled, the Baathist triangle will continue to suffer joblessness and poverty. This situation could give rise to a vicious cycle of violence, reduced economic opportunity, and poverty-induced despair.
The U.S. is altering its strategy accordingly - the military is launching new operations targeting the financiers and paymasters of the insurgency, who finance bomb workshops and pay mercenaries. Major General Charles Swannack, commander of the 82nd Airborne Division, was quoted in the Financial Times as saying, "The main architecture, the financiers, the ones who provide IEDs [improvised explosive devices], the ones who provide munitions, the capabilities, we've got to start taking out that level, and that's where we need better intelligence."
These new efforts are just beginning to develop. The First Armored Division's Operation Iron Justice is an anti-smuggling and anti-corruption drive aimed at breaking financial links to Baghdad's insurgent groups. This division will go after smugglers of cooking fuel, gasoline, and other items. A number of other divisions are launching similar efforts to cut off insurgency funding.
In time, the insurgency in Iraq will resemble a particularly violent form of thuggery - something our military is not trained for, and is unsuited to deal with. Fighting this transformed insurgency will be more like dealing with the mafia tactics of Al Capone than the resistance of the Viet Cong. A national Iraqi police force trained to handle this battle will become the decisive factor. The best way to accomplish this goal is to send law-enforcement agencies that have experience with the mafia to Iraq, such as the FBI or Italy's Carabinieri, a force that specializes in urban policing and was instrumental to defeating the Italian mafia.
Despite presidential candidate and retired general Wesley Clark's comment that the war in Iraq is a "$150 billion mess," and Al Gore's declaration that it was a "catastrophic mistake," Saddam's capture is more proof that the democratic transition in Iraq is progressing well. America is developing new methods and tactics to defeat an unpopular and increasingly criminal Iraqi insurgency. The U.S. will drive that insurgency out of existence by hitting it where it hurts the most: the pocketbook.
Dana R. Dillon is a senior policy analyst in the Asian Studies Center at The Heritage Foundation, a Washington-based public policy research institution. Melissa Parham is a fellow there.
First appeared on National Review Online.