FOREIGN INVESTMENTIN THE

OTTOMAN EMPIRE

International Trade and Relations

1854-1914

V. NECLA GEYIKDAGI

TAURIS ACADEMIC STUDIESan imprint of

I.B.Tauris PublishersLONDON • NEW YORK

CONTENTS

List of Tables viiList of Illustrations viiiAcknowledgements ixForeword xPreface xii

1 THE PRE-NINETEENTH-CENTURY OTTOMANECONOMY 1

Economic Mentality 4Economic Disintegration 5Why could the Ottoman Economy not Industrialize? 8Attempts to Industrialize in the Nineteenth Century 17Foreign Influence on Ottoman Economic Thought 18The 1838 Anglo-Ottoman Trade Convention 21The Impact of Trade Agreements on Trade and Industry 24

2 FOREIGN CAPITAL: BORROWING 29

First Attempts at Borrowing 30The Persistence of Financial Crisis and Foreign Loans 32The Road to Bankruptcy 35The Ottoman Public Debt Administration 41The Distribution of Foreign Debt by Country 47

3 FOREIGN CAPITAL: DIRECT INVESTMENTS 53

Motives for Foreign Direct Investment 53Capital-Exporting Countries 55

vi FOREIGN INVESTMENT IN THE OTTOMAN EMPIRE

4 THE DISTRIBUTION OF FOREIGN DIRECTINVESTMENT BY SECTOR 7A

Railways 75Banks and Insurance Companies 100Ports and Docks 108Urban Services 111Mining 119Industry and Trade 126

5 FOREIGN INVESTMENT POLICY ANDPOLITICAL RISK 135

The Ottoman Attitude towards Foreign Capital 137

Political Risk 146

6 CONCLUDING REMARKS 159

Notes 169Bibliography 199Index 211