ISIS just passed a major milestone, but the group looks a lot different than it did 2 years ago

REUTERS/Thaier Al-Sudani

ISIS's "caliphate" has survived for two years.

The terrorist group has been able to hold on to some of the territory in Iraq and Syria that it first seized in 2014, when its rampage across the Middle East shocked the world.

But since then, ISIS's self-declared caliphate — the increasingly fractured swath of territory it controls and rules as an Islamic emirate — has shrunk. The group — aka the Islamic State, ISIL, or Daesh — has attracted thousands of fighters, local and foreign, with its message of "remaining and expanding," but it hasn't been able to make good on its promise of world domination.

Days before ISIS's two-year anniversary of the declaration of its caliphate, the group suffered another blow. It officially lost control of the first major city it seized: Fallujah, Iraq.

ISIS maintains control over its major bases in Syria and Iraq — Raqqa and Mosul, respectively — but local forces backed by a US-led coalition are preparing to launch offensives on those cities as well.

"This is definitely the death knell of ISIS's territoriality as it was once known," Daveed Gartenstein-Ross, a counterterrorism analyst and senior fellow at the Foundation for Defense of Democracies, told Business Insider. "The caliphate as it was is gone. They're not going to be able to hold anything like the territory they did before."

ISIS is now looking to project power in other ways.

Rather than encouraging foreigners to travel to the caliphate and join ISIS's state-building project, ISIS leaders have issued public statements encouraging supporters to stay home.

These calls to action have inspired "lone wolf" attacks in Western countries carried out by ISIS supporters who plan their own attacks without any coordination with the group itself.

"The smallest action you do in their heartland is better and more enduring to us than what you would if you were with us," ISIS spokesman Abu Mohammad al-Adnani said in an audio message released last month. "If one of you hoped to reach the Islamic State, we wish we were in your place to punish the Crusaders day and night."

Switching from state-building to more traditional terrorism is one way for ISIS to survive and stay relevant, Gartenstein-Ross said.

REUTERS/Thaier Al-Sudani

Lone-wolf terrorism is also more difficult to prevent, making it likely that even as ISIS continues to lose territory, the group will continue to project power through terrorist attacks on Western targets.

CIA director John Brennan said at a Council on Foreign Relations event on Wednesday:

"The FBI has a real challenge because there are individuals who could be in their home or have no interaction with other people but will be on the internet and will be shaped and influenced by what they're seeing in terms of this narrative.

"[They] will decide on their own, maybe with a spouse or maybe with others or maybe alone, to carry out an attack. And if they get their hands on a weapon or the explosive material, they can do great damage before the signatures that are traditionally associated with traditional terrorist groups are seen."

It doesn't appear that ISIS has given up its territorial aspirations just yet, though. The group has been looking for other opportunities for territorial expansion and has established presences in some far-flung countries, including Bangladesh, Albania, the Philippines, Kosovo, and Indonesia.

It's unclear whether ISIS has a plan to seize territory in these countries the way it has in the Middle East. So far, ISIS's attempts to build out its caliphate have run into trouble.

ISIS saw some initial success in Libya, where it was able to gain control of the coastal city of Sirte. The group has established several thousand fighters in the country and begun to build out the infrastructure of a state in Sirte, implementing its harsh version of Islamic Sharia law and establishing "media points" to distribute its propaganda.

Sirte was said to be ISIS's "back-up capital," a place where ISIS could base its operations if it lost Raqqa or Mosul.

But those plans have mostly fallen apart. Libyan pro-government forces have retaken parts of Sirte, and the US has been aiding in the fight by carrying out airstrikes in the country.

REUTERS/Thaier Al-Sudani

The Combating Terrorism Center at West Point noted in a report earlier this year that ISIS has struggled to expand into parts of Libya that are contested by other militias.

Still, the decline of the caliphate doesn't necessarily spell the end of ISIS.

Shadi Hamid, a senior fellow at the Brookings Institution, noted in his recent book, "Islamic Exceptionalism," that while ISIS's territorial rule likely isn't sustainable in the long run, the group's legacy will remain with us long after the caliphate crumbles.

He wrote: "Even if it were destroyed tomorrow morning, the Islamic State would still stand as one of the most successful and distinctly 'Islamist' state-building projects of recent decades."

ISIS's project also transcends state-building. Amid upheaval in the Middle East, especially in Syria, where the civil war still rages and seems far from resolution, there lies fertile ground for extremist ideology to fester. Part of ISIS's success is based in the group's marketing itself as a protector of disenfranchised Sunnis, who are endangered by Syrian President Bashar Assad's forces in Syria and government-backed Shiite militias in Iraq and Syria.

"As the Shia militias have been advancing, they've engaged in sectarian depopulation," Gartenstein-Ross said. "The Sunni grievances are not going away."

Cole Bunzel, a PhD candidate in Near Eastern studies at Princeton University who previously worked for the US Department of Defense and now writes about extremist groups, noted earlier this month that the "cycle of Islamic State decline and revival" could "simply recur" as long as the ideology lives on.

"America's victory will once again prove illusory," Bunzel wrote. "If America seeks to claim real victory, it will have to eliminate an 'entire generation' of caliphate supporters the world over."

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