The Ottoman agricultural output was used to achieve self-sufficiency, and a portion of it was directed towards exports.
The state allocated capital to build the fundamental infrastructure for commercial activities.
The industry met the local needs and exported goods abroad until the late 18th century.
External borrowing and foreign privileges led to the weakening, bankruptcy, and eventually the collapse of the state.
The history of Muslims witnessed a prosperous era through the Ottoman rule that lasted for over 600 years, forming an empire that spanned the globe. However, after its fall and the abolition of the Ottoman Caliphate in 1924, Muslims no longer had a unified state. Their losses became substantial, not only economically but also politically, socially, and culturally.
The Ottoman economy was unique, although it experienced some weaknesses at times, especially since the 16th century, ultimately leading to the collapse of the vast empire that carried the banner of Islam. After its fall, Muslims found themselves vulnerable in a valley of predators created by Western colonization.
The Ottomans excelled in managing the state budget, both in revenue and expenditure, relying on essential resources like Zakat, Jizya (dhimmis taxes), and Kharaj (agricultural taxes), along with additional funds from taxes and fees administered by a specialized ministry. This provided the necessary liquidity for military support and the achievement of conquests. The “Waqf” (endowment) played a significant role, particularly in supporting education and healthcare.
Examining economic activities in the Ottoman state reveals that agricultural output achieved self-sufficiency, with a portion directed towards exports. Most Ottoman lands were considered “Miriyya,” belonging to the public Muslim treasury, with citizens granted the right to lease or lend them in exchange for a fee paid to the public treasury, known as “Al-Ashar.” It is the kharaj al-Muqasama, a specific tax applied to lands depending on how much they produce. This was applied by the Prophet (peace be upon him) to the external lands of Khaybar, where their distribution was done equally.
The Ottoman system was renowned for fairness, moving away from the feudal system prevalent in Europe that promoted slavery and economic injustice. The Ottoman agricultural system relied on the “Timar” system: the grant of lands or revenues earned in exchange for service to the state. This system worked through defining the landwork structure, tenant and farmer rights, and tax regulations.
Commercial Activity
In terms of trade, despite the Ottoman society being characterized by military expertise, it did not neglect commerce. The state allocated significant capital to build the fundamental infrastructure for commercial activities. Sultans and senior statesmen themselves took an interest in promoting trade. For instance, when Orhan Ghazi conquered the city of Bursa, he immediately established a commercial market. Similarly, Sultan Mehmed the Conqueror, after capturing Constantinople, created a commercial market that still exists in present times—the Grand Bazaar in the center of Istanbul. Ottoman cities, such as Sarajevo, Thessaloniki, and others, were distinguished by their markets.
Moreover, the Ottoman state, in its policy to revive trade, cared for experienced and skilled individuals by gathering them in major cities. Istanbul, for example, attracted traders from Bursa and Cairo. Thessaloniki, too, housed Jews who had fled from the “Inquisitions” in Al-Andalus, which was one of the wealthiest centers of the Ottoman Empire with vibrant commercial activities.
Additionally, the geographical location of the Ottoman Empire played a crucial role in enhancing its foreign trade and reviving global commerce. The Ottoman Empire served as a bridge between Eastern and Western countries. To stimulate commercial activity, the Ottoman state granted privileges to foreign traders, which was the nail in the Ottoman’s coffin, especially in the 18th and 19th centuries. This policy contributed to foreign merchants receiving preferential treatment over their Ottoman counterparts. Consequently, it led to the dominance of foreign traders and non-Muslim minorities in commercial activities.
As for industry, it covered local needs and exported products abroad until the late 18th century. Notably, the Ottoman Empire achieved self-sufficiency in textiles and exported substantial quantities of them abroad. The Ottoman state was also renowned for its military industry, particularly the production of cannons. The industrial activities expanded to include the manufacturing of threads, carpets, leather goods, woodwork, ceramics, brassware, iron, knives, swords, pistols, rifles, textiles, shoes, gold, and silver.
It can be said that the industrial evolution of the Ottoman Empire went through two stages: the manufacturing stage and the traditional inherited production pattern, and the stage of the modern pattern after the Industrial Revolution in the West. The latter stage, particularly in the mid-19th century, witnessed the Ottoman Empire struggling to compete with the West, despite its efforts to encourage the establishment of large industrial institutions based on advanced Western production methods.
However, Western industrial advancement was more powerful and widespread. Western goods flooded Ottoman markets, displacing Ottoman cotton textiles with European counterparts. The Ottoman Empire turned into a supplier of raw materials for Western industries, especially cotton, silk, and wool. The weakness of the Ottoman state, exacerbated by the rebellion of Muhammad Ali Pasha (the governor of Egypt), played a role in this decline. The state also granted concessions to the West, offering more privileges to foreigners through a trade agreement in 1838. This agreement replaced customs laws that reduced the profits of foreign traders and lifted restrictions on the import of Western goods and the export of Ottoman goods.
The Major Catastrophe!
Afterwards, the major catastrophe occurred. In 1854, during the Crimean War and under the rule of Sultan Abdulmejid I, the Ottoman state began issuing long-term bonds in European financial markets. Over the next two decades, borrowing expanded by significant amounts from London, Paris, Vienna, and other places under conditions that did not consistently align with its interests. The financial crises of 1873 led to a halt in borrowing from European financial markets and forced the government to declare a complete suspension of debt repayment in 1875–1876 (during the reign of Sultan Abdulaziz I). The outstanding debt amounted to 200 million pounds sterling.
After lengthy negotiations, the Ottoman Public Debt Administration was established in 1881 (during the reign of Sultan Abdulhamid II). It aimed to exercise European sovereignty over parts of the state's finances and ensure the continuity of debt repayment, which had been reduced by about half during the negotiations.
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During the following three decades until the outbreak of World War I, a significant portion of the state's revenues was under the control of the Debt Administration and was used to repay loans. On the eve of World War I, the annual borrowing volume, as well as the existing external debt, reached unusually high proportions, which the state witnessed in the seventies of the last century.
As a result of opening the door to foreign borrowing for the first time during the reign of Abdulmejid I, more privileges were granted to foreigners, undermining the state's sovereignty. Ultimately, this led to its weakening, bankruptcy, and eventual demise in 1924.
Thus, the sun of that great empire set due to the errors of some of its sultans, despite its achievements at the height of its glory, bringing strength and glory to Muslims in the East and West. After that, our country's situation became like a herd wandering in the desert under the name of the nationalist state planned and executed by “Sykes” and “Picot.” Despite this wound and pain, hope is still attached to history repeating itself, restoring the glory and honor of Muslims.
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