Analysts say the end of the self-proclaimed caliphate’s territorial rule ‘does not mean the end of ISIL’.

Three years ago on Wednesday, ISIL leader Abu Bakr al-Baghdadi stood at the pulpit of Mosul’s Grand Al Nuri mosque, which was destroyed last week amid fighting between the armed group’s fighters and US-backed Iraqi forces, and announced the creation of a Sunni caliphate.

While ISIL proceeded to balloon in size – at its peak it covered territory across Iraq and Syria roughly equivalent to the size of the United Kingdom – it has lost nearly 47 percent of its territory since January, according to Conflict Monitor by IHS Markit, a security and defence observer.

Experts say that despite being seemingly on the brink of military defeat, the group’s widespread ideology will be much harder to erase and may re-emerge in other manifestations.

“The structure of ISIS is destroyed, but the underlying forces are not – they are being worsened,” Rami Khouri, senior fellow and professor at the American University of Beirut, told Al Jazeera, using a different acronym for ISIL.

“The rise of ISIS is a sign of deeper problems,” he said.

Though it is unclear how ISIL may re-establish itself, some believe that poor economic conditions and volatile war-torn areas are the basis for the emergence of such groups.

Khouri said that unless underlying regional issues such as unemployment, human rights abuses and political repression are addressed, the group’s ideology will continue to attract the disenfranchised and politically excluded.

The self-declared caliphate is an offshoot of al-Qaeda in Iraq, which in 2006 became known as the Islamic State of Iraq (ISI). The movement, led by key al-Qaeda figures in Iraq, played a large role in fuelling a sectarian war in the country.

The 2003 US-led invasion of Iraq had devastating effects on the social and economic fabrics of the country. After deposing the late Iraqi president Saddam Hussein, the US ordered the dismantlement of Iraq’s army and banned the Sunni Baath Party from government under the de-Baathification law.

The Baath party had been in power for 40 years and, under the law, many Iraqis who were party affiliates lost their jobs. Consequently, an estimated 400,000 people became marginalised in Iraqi society.

By placing Nouri al-Maliki as prime minister, a Shia politician who during his tenure targeted and marginalised Sunnis and Kurds, the US occupation led to a sectarian war, resulting in the displacement of more than one million Iraqis between 2006 and 2008.

ISI was driven out of the capital, Baghdad, and into Iraq’s second largest city of Mosul, as well as Diyala and Al Anbar. In Mosul, they established military cells and made the city their operations hub. In the ensuing years, they carried out several deadly attacks in Baghdad and its surroundings, targeting Western-allied tribal leaders and US military posts.

And in 2010, Baghdadi became ISI’s leader following the death of his predecessor.

By 2012, Baghdadi had mandated his affiliates to establish a branch in Syria’s northeast region amid a fractious civil war, where the branch was first known as Jabhat al-Nusra, led by Abu Mohammed Al Julani.

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When Baghdadi announced the dissolution of Jabhat al-Nusra and the integration of its members into ISIL, which stands for Islamic State of Iraq and the Levant, Julani refused the order, creating a clear divide between the two groups after a series of defections.

From Syria’s eastern province of Deir Az Zor to Iraq’s second largest city of Mosul, the self-declared caliphate managed over the past three years to create a de facto state with various municipal centres.

Rising out of the chaos in Iraq and into Syria, ISIL managed to establish its presence over drained, vulnerable, war-torn areas – paramount conditions through which armed groups gain further military power.

Yet, the caliphate structure that is now crumbling was “never a serious idea”, said Khouri – instead, it is the ideology that predates the group that may resurface.

Similarly, Columb Strack, senior Middle East analyst at IHS Markit, believes ISIL is only one manifestation an ideology that has existed for “decades”.

“The same ideology will inevitably emerge,” Strack told Al Jazeera.

“The sectarian nature of the conflicts in Iraq and Syria, fuelled by the rivalry between Iran and Saudi Arabia, is strengthening the Sunni jihadist ideology,” he said.

Syria’s civil war, now in its seventh year, has killed more than 450,000 people, forced more than five million civilians to flee the country, and has internally displaced more than six million people. What started with anti-government protests in Syria’s major cities escalated into a bloody civil war involving various factions, conflicting in religion, ethnicity, and political objectives.

Foreign armed support from leading powers such as Russia, the US and Iran has only exacerbated the reality on the ground. Diplomatic efforts to end the crisis have also failed, paving the way for ISIL’s temporary expansion in the region.

“Once the Islamic State [ISIL] is defeated militarily, the vacuum will be filled by other similar groups, principally offshoots of al-Qaeda … which will once again be an attractive alternative to Iraq’s Sunni Arabs who are being marginalised by the Shia-dominated government and growing Iranian influence,” said Strack.

The group has suffered major territorial losses, and currently controls well under half of the territory it did at its peak in mid-2014, according to Conflict Monitor.

Currently, the battle against ISIL, now in its final stages, is centred on the group’s last two urban strongholds: Mosul in Iraq, and Raqqa, the group’s self-proclaimed capital in Syria.

ISIL is expected to be militarily defeated by the end of the year, according to Strack. Its territory has been reduced to a number of “small isolated pockets” in Iraq and to “a narrow strip of towns and villages” in Syria’s Deir Az Zor.

The caliphate’s rise and fall has been characterised by “very rapid inflation, followed by a steady decline”, Strack added. ISIL’s attempt at capturing Iraq’s Ramadi and Syria’s Palmyra in May 2015 was a major turning point, which marked a “strategic overreach”, he explained.

Moreover, Strack said that ISIL’s attempt to retake Ramadi and Palmyra after being forced out left the strategic Tal Abyad border crossing, “the gateway from Turkey to Raqqa”, under-guarded. This resulted in the loss of most the group’s territory along Syria’s northern border with Turkey.

The Syrian Kurdish YPG, which capitalised on the opportunity, proved itself a strong fighting force and quickly became the US’ main ground partner in the fight against ISIL.

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Much of ISIL’s weaponry was accumulated as the group swept across Iraq and took over unguarded military stockpiles.

“Decades of free-flowing arms into Iraq meant that when IS took control of these areas, they were like children in a sweet shop,” said Oliver Sprague, Amnesty International’s arms programme director, in a statement.

Last month, the US government audit said the military failed to monitor more than $1bn worth of arms transfers to Iraq and Kuwait.

Although the arsenal is supplemented by the group’s own production of munitions, it is also likely to have purchased weaponry on the “illegal arms market” via middlemen, said Strack.

According to the United Nations, about 2.6 million Iraqis have fled the country since the beginning of the crisis in January 2014, when ISIL took over vast swaths of land. Three million internally displaced people currently reside in camps away from their homes.

It is difficult to predict what ISIL’s next steps will be. The group remains active as it shifts further east in Syria to cities also under the oil-rich Deir Az Zor province.

The US-backed campaign to recapture Raqqa may be effective, but ISIL might continue to govern areas beyond its current remaining strongholds.

What poses a challenge at this point is the ability of the recognised state institutions to govern areas reclaimed from ISIL over the past three years, according to Professor Ranj Alaaldin, visiting fellow at the Brookings Institute in Qatar’s capital, Doha.

“The end of the so-called caliphate does not mean the end of ISIS,” he said.

“ISIS could splinter into different groups or align themselves with other extremist groups,” he added, which would create a real challenge against security forces.

Alaaldin pointed out that, currently, there is no “political and humanitarian strategy or framework for the day after ISIS”.

Without efficient resources to rebuild the destruction in Iraq and Syria, Alaaldin said that it will be challenging to “stabilise the country, implement good governance initiatives and give people jobs and basic services”.

Experts predict that the group will also retain the ability to mobilise and plan underground, dispersed attacks via cells based around the world.

But ISIL is “not the most important problem of the region”, said Khouri, explaining that mismanagement, corruption and the lack of political participation in the Middle East are the real obstacles facing the region.

“Will new government systems be just as bad? That’s the real challenge,” he said.