Al-Qaeda 'faces funding crisis'

Al-Qaeda is in its worst financial state for years, the US says

Al-Qaeda is in its worst financial state for many years while the Taliban's funding is flourishing, according to the US Treasury.

Senior Treasury official David Cohen said al-Qaeda had made several appeals for funds already this year.

The influence of the network - damaged by US efforts to choke funding - is waning, he said.

The Taliban, meanwhile, are in better financial shape, bolstered by Afghanistan's booming trade in drugs.

According to Mr Cohen, the al-Qaeda leadership has already warned that a lack of funds was hurting the group's recruitment and training efforts.

ANALYSIS Gordon Corera, BBC Security Correspondent After 9/11 much emphasis was placed on dealing with terrorist finance, since it was something tangible that governments could try to tackle and was far easier than the bigger challenge of dealing with the ideology that sustains terrorism. But do groups like al-Qaeda need money? Terrorist attacks are not in themselves expensive. Estimates vary but 9/11 might have cost around half a million dollars, the 2004 Madrid bombings $10,000 and the London attacks of 7 July 2005 only a few thousand. However, al-Qaeda does need resources to operate effectively - for instance its leaders will be paying off local villagers and tribes to ensure their location is not revealed. So restricting the money flow can make it harder for them to operate.

"We assess that al-Qaeda is in its weakest financial condition in several years and that, as a result, its influence is waning," Mr Cohen said from Washington.

But he added that as the organisation had multiple donors who were "ready, willing and able to contribute" the situation could be rapidly reversed.

However, the assistant secretary for terrorist financing said that the Taliban were in a better financial position, despite efforts to control the movement's cash supply.

The US administration's Special Envoy to Afghanistan, Richard Holbrooke, has said that the Taliban get most of their funding from private benefactors in the Gulf.

The many sources of funding for the Taliban make it more difficult to intercept and interrupt money flows, Mr Cohen said.

He also noted a trend in militant organisations turning to criminal activities to finance themselves.

Hezbollah, he alleged, is involved in making and selling illegal copies of music and computer software, as well as cigarette smuggling.

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