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Islam,Terrorism and Jihad (20 Feb 2017 NewAgeIslam.Com)

‘Petrodollar’ Jihadism and Demonetisation: Is Terror Financing Blocked After Demonetisation?

By Ghulam Rasool Dehlvi, New Age Islam

20 February 2017

Radical Islamism or Jihadism funded with the petrodollars has been playing a sinister role in supplying arms to the militant Islamist groups the world over. Given this, it is widely believed that demonetisation in India has come as a roadblock to the ‘petrodollar jihad’ in Kashmir.In his article dated January 19, 2017, HormisTharakanan IPS officer and former chief of Research and Analysis Wing (RAW) wrote: “Demonetization continues the war on terrorism by disrupting terror funding, but with little conviction and sketchy information in its arsenal”.[1]

‘Petrodollar’ juxtaposed with radical Islamism or Jihadism is a term that was, perhaps, introduced by Fouad Ajami, a Muslim academician and writer on West Asian issues. He coined the term to candidly expose the historical interplay between the puritanical creed of "Wahhabism” and the Saudi oil—the two bases of “Petrodollar Islam”. In his article in New York Times in 2007, Ajami noted that ‘Petro-Islam’ and the Wahhabis blew in with new money as well as a new interpretation of the faith.

Indeed, terror financing is a matter of grave concern for the strategic analysts particularly those engaged with the gigantic task of counter-terrorism. Nevertheless, one can pose a research question whether this hypothesis has been subjected to rigorous data-based study or not, a key point that Mr. Tharakan seems to have raised in his observation.

Only recently, the UN Under-Secretary-General for Political Affairs Jeffrey Feltman has warned that ISIS has “sufficient funds” to continue fighting.“Although Islamic State’s income and the territory under its control are shrinking, it will try to expand other sources of income, such as kidnapping for ransom, and increase its reliance on donations as it adopts to increased military pressure”, said Feltman. He also noted that ISIS relies mainly on income from extortion and hydro-carbon exploitation, even though resources from the latter are on the decline.

On November 8, 2016, Prime Minister of India announced the demonetisation of Rs. 500 and Rs. 1000 notes. The key objectives behind this historic move, he stated, were to put an end to black money, corruption, fake currencies and terror financing.

Now when the Union Budget for 2017-18 has been presented and twomonth shave passed since the announcement of demonetization, the questions exponentially arise: is Black Money back into the Public Finance now? Is corruption no longer prevailing in the country? Are fake currencies no more seen anywhere? Most important question that should be posed to the government and the Reserve Bank of India (RBI) is whether the sources of terror financing blocked now.

Apparently, even the central government is not able to answer these questions. For the RBI recently stated that after the demonetization, Rs. 11.5 lakh crore rupees were received by the banks. But before the demonetization, there were around 15 lakh crore rupees in circulation across the country. Going by the RBI’s statement, nearly all the notes which were in circulation have come back into the banks. So where has the Black Money gone?

While the government pledged to hit the terror funds hard and curb the circulation of fake currency notes, there seems to be no definite account of such notes in circulation, as a study conducted by Kolkata’s Indian Statistical Institute revealed.

As far as terror financing is concerned, the security establishment officials were highly optimistic about the demonetization’s impact on all crimes including the terror financing. They strongly hoped that the terrorists’ finance sources would be severely hit by the move. A former Additional Secretary of the cabinet secretariat who is now affiliated with the Centre for Air Power Studies (CAPS), Jayadeva Ranade blogged on November 10, 2016:“It [demonetization] will be a blow to the main sponsors of fake currency, Pakistan and Wahhabi groups. I don’t expect them to stop but it will take some time. It is a good move, [which] hits them on many prongs. Many of their operators and sleeper cells here have fake currency. It will be a severe blow and for a few years we will get relief from this.”[2].

Indeed, India’s people expected that demonetization would be a strong move to crash down the funding sources of terror emanating from the global fountainheads of Wahhabism into various parts of this country. Most notably, the global Wahhabi networks, in name of largesse, immensely funded petrodollars to the religious, educational and other charitable institutions in India.

In the year 2016, NDTV, an Indian TV channel ran a two-part show on “Saudi Islam in India and Money Trail”. The channel scrutinised the records of funds pouring in to promote Saudi-style Salafist Islam in India and particularly its influence in Kashmir. It analysed FCRA data for the last 3 years to find how many Wahhabi NGOs in India have received funds from Salafist Islamic charities spawning the world over.  According to this detailed report, the largest amount of Salafist funds came from UAE with Rs. 51 crores, followed by the UK with Rs. 36 crores, while Rs. 23 crores came from Kuwait and Rs. 10 crores from Canada. Surprisingly enough, funds from Saudi Arabia in this period come much less than in the past years. It was Rs. 4.5 crores only.[3].

It cannot be denied that the immense financial largesse donated by the global Wahhabi channels, whether granted by institutional or private donators, has been pursuing an ulterior motive of religio-political penetration in the region. In pursuit of jihad in Afghanistan, Saudi government then, furthered its political end—expansion of Wahhabi madrasas and seminaries financially supported by the Saudi petrodollars, as Pir Mohammad Mollazehi has noted in his research work “Salafi Tendencies in Pakistan”. [4].

In Balochistan and Khyber Pakhtunkhwa, the foreign financial aid was granted to Wahhabi madrasas to implant the Wahhabi ideology as an antidote to the age-old Rishi-Sufi tradition in the region. Also, the Wahhabi petrodollars were lavishly spent in supply of arms to rebel and militant groups in Kashmir. For this purpose only, numerous charitable institutions were created. They were actually meant to provide funds for the jihadists. To achieve this goal, the global terrorist who is now captured in Pakistan, Hafiz Muhammed Saeed established Markaz al-Da’wah wal-Irshad in 1986 with funds from Arab countries. The Guardian gave a detailed account in its report “US embassy cables: Lashkar-e-Taiba terrorists raise funds in Saudi Arabia”. [5].

It is interesting to note that the Markaz al-Da’wah wal-Irshad was later split into twins: Lashkar-e-Tayyiba (LeT) and Jamaat-ud-Da’wah (JuD). But more staggering is the latest news: Jamaat-ud-Da’wah has now rebranded itself with the new name of “Tehreek Azadi-e-Jammu Wa Kashmir”. It took place shortly after its chief Hafiz Saeed was put under house arrest and a crackdown launched on the organisation's activities, as a noted website, Firstpost reported. [6].

In view of the deep-rooted terror financing in Kashmir, one hoped that demonetisation would particularly curb the terror’s sources of funding in the valley where the ilk of Hizb-ul-Mujahidin collects huge donations from Pakistan and then route them into the State through hawala operators. However, the latest news from Kashmir in this regard does not augur well. Recently, new currency notes have been found from the terrorists who were killed in Kashmir encounters. To many, this incident alone is sufficient enough to nullify the government’s loud claim to hit the terror financing hard by the sword of demonetisation.

Several confirmed sources unravelled the truth about the circulation of Fake Indian Currency Note (FICN) which is smuggled via the land, sea and air routes. The trend in circulation of FICN is principally from Pakistan to West Asian countries and Bangladesh. Also, it is from Gulf countries to Nepal, Myanmar, Thailand, Malaysia and Sri Lanka. FICN is further smuggled into India from these countries, as a security analyst, Shantanu Mukherjee hinted in his Firstpost article. [7].

Recently, several media outlets reported that scores of black money was found in different parts of the country.  This has come as a shock to the nation and the people. Even several TV channels which heaped praises on the demonetization are now highly critical of the decision, as the key objectives are yet to be achieved.

Although illegal betting and Hawala channels seem to suffer a temporary setback, however, the terror elements in Kashmir and other parts of the country are devising new methods to overcome the current roadblock.

So was the slogan of hitting the terror financing nothing short of a political gimmick? An iota of doubt was created after the government started digressing from its clearly stated objectives behind the demonetisation. Of late, it has shifted the focus to the development of a cashless economy in a bid to veil the real issues. Now major attention is paid to promote only a ‘cashless India’. Finance Minister has announced to provide facilities to those who go in for cashless transactions.

But Demonetisation does not seem to be a strong blow to the terror outfits booming and mushrooming on the petrodollar-funded radical Islamism. It might be only a winning proposition for the merchants and banks managers grossly involved in black marketing of the new currencies.

Tellingly, there are security experts who theorise that it is quality of counter-terrorism, rather than currency crackdown, that can prevent terrorism. Former special secretary of the Cabinet Secretariat, Government of India, wrote in his opinion-piece in The Indian Express: “Finally, it is the quality of our CT machinery which prevents terrorism and not our currency. The joint ambush by the anti-talks ULFA and NSCN (K) in Pengari, Assam on November 19 killing three army Jawans is a clear indication that terrorists would strike with or without demonetisation. Thus “ending terrorism through demonetisation” will remain only a political slogan.” [8].

(1)        Tharakan, Hormis. “Attacking the finances of terrorism with demonetization?”,The Indian Economist.

theindianeconomist.com/attacking-finances-terrorism-demonetization/ (last access: 17 February, 2017).

(2)        Ranade, Jayadeva. “Demonetisation will hit terror financing hard”, on the web 10 November 2016.

brighemantmahajan.blogspot.in/2016/11/demonetisation-will-hit-terror.html(last access: 17 February, 2017).

(3)        Jain, Sreenivasan. “Controversial Texts, Mystery Funds: On The Trail Of Saudi-Style Islam In India”, NDTV,25 September, 2016

ndtv.com/video/news/news/controversial-texts-mystery-funds-on-the-trail-of-saudi-style-islam-in-india-432595 (last access: 17 February, 2017).

(4)        Mollazehi, Pir Mohammad. “Salafi Tendencies in Pakistan”, Iran Review Jun 10, 2008.

iranreview.org/content/Documents/Salafi_Tendencies_in_Pakistan.htm (last access: 17 February, 2017).

(5)        “US embassy cables: Lashkar-e-Taiba terrorists raise funds in Saudi Arabia”, The Guardian on the web 5 December 2010

guardian.co.uk/world/us-embassy-cables-documents/220186(last access: 17 February, 2017).

(6)          “After Hafiz Saeed's arrest, Jamaat-ud-Dawa renames itself TehreekAzadi Jammu and Kashmir”, Firstpost on February 17, 2017firstpost.com/world/after-hafiz-saeeds-arrest-jamaat-ud-dawa-renames-itself-tehreek-azadi-jammu-and-kashmir-3266270.html(last access: 17 February, 2017).

(7)        Mukharji, Shantanu. “FICN and terror-financing: New considerations in view of demonetization” Firstpost Nov, 14 2016


(8)        Balachandran, Vappala. “Black Money And Terror”, Indian Express, November 23, 2016



Ghulam Rasool Dehlvi is a regular columnist with www.newageislam.com He is a scholar of classical Arabic and Islamic Sciences, cultural analyst and researcher in Media and Communication Studies at Centre for Culture, Media & Governance, Jamia Millia Islamia and can be reached at grdehlavi@gmail.com

URL: http://www.newageislam.com/islam,terrorism-and-jihad/ghulam-rasool-dehlvi,-new-age-islam/‘petrodollar’-jihadism-and-demonetisation--is-terror-financing-blocked-after-demonetisation?/d/110139

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  • Very informative article. Wahhabi money pouring into our subcontinent has to be stopped by whatever means necessary. That money is poison for us.
    By Ghulam Mohiyuddin - 2/20/2017 10:35:55 AM

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