THE REASONS BEHIND THE RESORT OF OTTOMAN EMPIRE TO FOREIGN DEBT AND THE FIRST FOREIGN BORROWING

Authors : Binhan Elif YILMAZ

Pages : 186-199

View : 13 | Download : 9

Publication Date : 2002-11-01

Article Type : Research Paper

Abstract :There are several reasons which caused Ottoman Empire to resort to foreign debt in the 19th century. Income deficiency of the Empire was caused by the financial crisis which began in the mid-period of the 16th century and continued throughout the 17th and 18th centuries. Besides, unfavourable results of various wars, capitulations, commercial treaties which led the Empire to colonolization, insufficiency of tax revenue and the consumption pattern prevalent at domestic markets constituted the internal and external factors which led the Empire to pile up foreign debt. Undoubtedly, the over accumulation of financial capital in European countries had also been effective in triggering foreign-debt policies of the Empire. As the result of such developments, the Empire borrowed at foreign markets for the first time in 1854, and very shortly after that, the financial system of the Empire went into bankruptcy
Keywords : Ottoman Empire, foreign dept, capitulations, financial bankruptcy