In the Ottoman Empire Turkish nationalists took control before the war began. They drove out Greeks and Armenians who had been the backbone of the business community, replacing them with ethnic Turks who were given favorable contracts but who lacked the international connections, credit sources, and entrepreneurial skills needed for business. The Ottoman economy was based on subsistence agriculture; there was very little industry. Turkish wheat was in high demand, but transportation was rudimentary and not much reached Germany. The war cut off imports except from Germany. Prices quadrupled. The Germans provided loans and supplied the army with hardware, especially captured Belgian and Russian equipment. Other supplies were in short supply; the soldiers were in rags. Medical services were very bad and illness and death rates were high. Most of the Ottoman soldiers deserted when they had the opportunity, so the force level shrank from a peak strength of 800,000 in 1916 to only 100,000 in 1918
When the war broke out in 1914, the Ottoman Empire already suffered from an external debt of 140 million pounds. It also had a predominantly agrarian economy and was perhaps the least industrialized of the belligerent countries. The 1913 Ottoman Industrial Census showed that within the borders of what became modern Turkey, there were only 600 manufacturing establishments with ten or more workers. Manufacturing was largely based on artisanal forms and the empire was heavily dependent on imports of manufactured goods, which was made much more complicated by the war.
The war’s outbreak created a panic in the Istanbul market and disrupted government finance, resulting in the postponement of debt payments, the implementation of special war taxes (tekalif-i harbiye) and requisitions, and a significant reduction in salaries for civil and military officials.
The empire’s limited rail network not only created major problems for troop supply and movement, but also for food distribution. Transportation problems caused by inadequate railway worsened after the Russian navy bombed the coal works on the Black Sea coast and intercepted transport ships. The Ottomans now had to import coal from Germany in order to run their trains.
Harsh winters, the 1915 locust invasion, and other natural disasters also reduced food supplies. By 1916 wheat production had fallen by 30 percent. State policy at its best provided short-term relief; at its worst, it aggravated shortages and suffering among soldiers and civilians. The state attempted to establish supply agencies to provide the public with some basic items such as bread, but these efforts spun out of control, especially in Istanbul. The “system of war agriculture” had a limited effect. The 1916 Agricultural Obligations Law made those few existing large corporations in urban areas responsible for cultivating specific amounts of land. The law also required all farmers to cultivate a minimum amount of land based on the number of oxen they owned. The government asserted the authority to force citizens to work on farms facing labor shortages due to mobilization. In some instances, the army organized women’s battalions to serve in the agriculture industry. A Ministry of Provisioning was created, but only in the last year of the war.