By the early nineteenth century, the economic and political changes reshaping Europe were also at play in the Ottoman Empire, which stretched around the northeastern, eastern, and southern shores of the Mediterranean Sea.

Muhammad Ali, a ruthless and intelligent soldier-politician, ruled Egypt in the name of the Ottoman sultan from 1805 to 1848. His modernizing reforms (see "Western Penetration of Egypt" in Chapter 24) helped turn Egypt into the most powerful state in the eastern Mediterranean. In time, his growing strength directly challenged the Ottoman sultan and Istanbul’s ruling elite. From 1831 to 1840, Egyptian troops under the leadership of Muhammad Ali’s son Ibrahim occupied and governed the Ottoman province of Syria and Palestine, and threatened to depose the Ottoman sultan Mahmud II (r. 1808–1839).

This conflict forced the Ottomans to seek European support. Mahmud II’s dynasty survived, but only because the European powers, led by Britain, allied with the Ottomans to discipline Muhammad Ali. The European powers preferred a weak and dependent Ottoman Empire to a strong, economically independent state under a dynamic leader such as Muhammad Ali.

Faced with growing European military and economic competition, in 1839 liberal Ottoman statesmen launched an era of radical reforms known as the Tanzimat, or “Reorganization.” The Tanzimat reforms were designed to modernize the empire and borrowed from western European models. The Imperial Rescript of 1856 marked a high point of reform. Articles in the decree called for equality before the law regardless of religious faith, a modernized administration and army, and private ownership of land. As part of the reform policy, and under pressure from the European powers, Ottoman leaders adopted free-trade policies. New commercial laws removed tariffs on foreign imports and permitted foreign merchants to operate freely throughout the empire.

The turn to nineteenth-century liberal capitalism had mixed effects. On one hand, with the growth of Western-style banking and insurance systems, elite Christian and Jewish businessmen in the empire prospered. Yet the bulk of the profits went to foreign investors rather than Ottoman subjects. More important, the elimination of traditional state-controlled monopolies sharply cut imperial revenues, forcing Ottoman rulers to borrow heavily from foreign lenders.

Intended to bring revolutionary modernization, the Tanzimat permitted partial recovery but fell short of its goals. The Ottoman initiatives did not curtail the appetite of Western imperialism, which secured a stranglehold on the imperial economy by issuing loans. The reforms also failed to halt the growth of nationalism among some Christian subjects in the Balkans, which resulted in crises and increased pressure from neighboring Austria and Russia, eager to gain access to the Balkans and the eastern Mediterranean.

Equality before the law for all citizens, regardless of religious affiliation, actually increased religious disputes, which were often encouraged and manipulated by the European powers eager to seize any pretext for intervention. This development embittered relations between religious conservatives and social liberals. Religious conservatives in both the Muslim and Greek Orthodox communities detested the religious reforms, which they viewed as an impious departure from tradition. These conservatives became dependable supporters of Sultan Abdülhamid II (ahb-dool-hah-MEED) (r. 1876–1909), who in 1876 halted the reform movement and turned away from European liberalism in his long and repressive reign.

Abdülhamid II’s government failed to halt foreign efforts to fragment and ultimately take control over key Ottoman territories. By the 1890s, the government’s failures had encouraged a powerful resurgence of the modernizing impulse under the banner of the Committee of Union and Progress (CUP), an umbrella organization that united multiethnic reformist groups from across the empire. These fervent patriots, unofficially called the Young Turks, seized power in a 1908 coup and forced the sultan to implement new reforms. The Young Turks helped prepare the way for the birth of modern secular Turkey after the defeat and collapse of the Ottoman Empire in World War I.