BEIRUT ��Islamic State says its 2-year-old caliphate has become "more manifest than the sun in the middle of the sky."
However, a video the militants released last week belied the facts on the ground. Its territory is shrinking, finances are dwindling, and the attempt at governance that distinguished it from other jihadist groups is failing, according to a report by IHS Conflict Monitor published Sunday.
"They have to justify that they've lost territory with big wins and the way they can get big wins and make the headlines is by launching big attacks against civilians, not just in Iraq and Syria, but also further afield, including Europe," Columb Strack, lead analyst for the IHS Conflict Monitor, said in an interview.
Islamic State declared a caliphate straddling Syria and Iraq after capturing Mosul, Iraq's biggest northern city, in June 2014. Since then, extremists linked to the group have proliferated and murdered hundreds of people in Ankara, Beirut, Brussels, Paris and elsewhere, in addition to Iraq and Syria. The risk of further such attacks leads U.S. and European governments to say that Islamic State still poses a major terrorism threat despite losing ground.
Under attack from U.S.-backed forces dominated by Kurdish fighters, the caliphate shrank by 12 percent in the first six months of this year after losing 14 percent in 2015, the IHS report said. As of July 4, Islamic State controlled about 26,000 square miles in Iraq and Syria, it said.
The group, which boosted funding with illegal oil sales and extortion, has also suffered a decline in revenue. Monthly income fell to $56 million as of March from about $80 million in mid-2015 and has probably decreased another 35 percent since then, IHS said.
The militants, meanwhile, killed more than 350 people people since late May with coordinated blasts in the Syrian coastal cities of Tartus and Jableh, a truck bombing in Baghdad's Karrada area, a hostage-taking in Bangladesh and three suicide bombs in one day in Saudi Arabia. The Turkish government blames Islamic State for attacks at its main international airport in Istanbul that killed at least 47 people in late June.
"They're going back to what they know and they're going back to what they can do very well," Strack said. "They're emphasizing the broader, global scale of their endeavor as opposed to just the governance project that they set up in Iraq and Syria."
