"If Isis’s “caliphate” were a state, it would be a country of the poor. Most Syrians in the territory are struggling to get by on about $115 a month"
In doing so, he made his capital Al-Raqqa. Raqqa presents a unique case to show just how effective economic policy is.
Once resting in a profitable spot between Iraq and Syria, it is now sustained by the people whom the ISIL fight. In retrospect, Al-Assad's guiding hand was cold, but competent. Since sustaining the switch from Assad to Baghdadi, the residents must hold three currencies. General utilities running for a few hours is more of a desire than a daily expectation, because the ISIL guard state-built facilities while government workers sustain the city. Government workers are paid by the Syrian (Damascus) and Iraqi government. In fact, the most integral workers in Raqqa, as well as the basal utilities integral to running a tiny city (much less a state), are all paid for, built and/or hired by the Syrian or Iraqi governing bodies. Come pay day, they gather three types of currency and make the trek to Damascus or Baghdad. While life has become more difficult, it has remained similar enough that the ISIL public policy can be analyzed.
Thus, there are fairly stringent economic policies, and some have interesting implications. Take, for example, the above figure of $115 a month for the average Syrian (Raqqans are ostensibly poorer) and now deduct that by 50%. That $57.50 goes to the ISIL for protection money, though the organization in Syria reaps $1m/day via extortion and gas money. The ISIL takes all petroleum and oil in exchange for promises not to kill employees nor destroy utility buildings. The first medical university of Raqqa opened because the ISIL killed every doctor that helped Shia soldiers. This is basically a Labor supply ceiling that combines a floor of free aid sent by humanitarian groups.
The tax line can almost be seen as economic re-distribution if one looks at the soldiers - standing uselessly at gates, checking passports, taking money and whatnot - as the furthest left tail of the distribution. It leads to traders and entrepreneurs, even with a 2.5% revenue tax and a 10% tax on exporting cargo (might as well sell it in Raqqa), being tentative to engage in business with the ISIL. Most interesting is that when there are no militants around to watch, the prices of fuel to bread - set by the state - reach exorbitant levels due to severe supply limits. With labor and commodity supply limits, it is interesting to note how the people constrained by the quasi-limited economy still engage in free market principles, even when faced with deadly repercussions. In fact, farmers bereft of real farming equipment, when offered subsidized farming necessities for food purchasing rights by the soon-to-be starving ISIL, refused to engage in private transactions with the ISIL on the grounds of selling the food in strongholds like Raqqa at free market prices (which are also substituted for barter-economies).
Baghdadi is taking the "social welfare" and dividing it/moving it to the "dead weight loss (to welfare)" triangle in that what should be social welfare has been driven as far down (aka price point near the top) as possible to leverage the entire triangle to be given to the ISIL in some form or another. In macromarket terms, the civilians are resisting by choosing, in the face of a Caliphate once again, to eschew monarchism for democratic foundations.
http://www.ft.com/intl/cms/s/0/b2c6b5ca-9427-11e4-82c7-00144feabdc0.html#axzz3WCy6po3E
http://english.alarabiya.net/en/webtv/reports/2014/03/04/Food-prices-skyrocket-in-Syria-s-Raqqah.html
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