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First and foremost, the dire situation of the Ottoman Empire was not a reason not to join the war, but mostly a cause for joining it.
The Ottoman Empire entered the war due to their attack against the Russian fleet, but that attack was not decided by the Government as a whole but by a faction of officers. If the Government had had complete control over the military, it could have stopped them. The weakness of the Government allowed the pro-war faction to throw the Empire into the war.
Now, apart from this technicality, let's try to see the rationale1 of that faction:
The Ottoman Empire did not need to triumph over industrialized powers
. It only needed to help some industrialized powers (Germany) to win over others (France, UK, Russia)2. Note that even smaller powers (Bulgaria, Romania) joined the war when it looked like the tide was favorable.
Since the Crimean War, the Ottoman Empire had kept its independence (even at the cost of most of the European part of it) due to the balance of power in Europe. The war was going to shatter that balance of power, and the Empire was still too weak to resist whoever would win the war if they wanted to take over the straits (Russia) or take away Irak or Palestine (UK) or worse. Neutrality had its own risks, too.
About which side to chose, it was pretty clear.
For centuries Russia had been pushing for an exit to the Mediterranean through the Bosphorus; in the past France and (mainly) the UK had countered that as part of the Big Game but now they were together with Russia.
The UK supported Egypt, who was a former Ottoman province, and also had a foothold in Kuwait.
OTOH, neither Germany nor Austria-Hungary had any objective that affected the Ottoman Empire (being focused in Russia and English and French colonies). And relationships with Germany were good due to economical and military interchanges.
In Autumn 1914, the Germans had severely beaten the Russians at Masurian Lakes and Tannenberg, and occupied a significant portion of the most industrialized regions of France. The "this war will be over by Christmas" motto was still believed and German victory seemed to be, if not imminent, very probable.
And, to be fair, the Ottoman Empire did not did that bad itself. While some of them were helped by the overconfidence of Entente officers and politicians, the Ottoman did inflict some severe defeats to their enemies (Gallipoli, Kut). It did lose some ground to the Russian and British armies, but kept fighting and resisting almost until the end of the war.
1 There are often other motives (like internal politics), not all of them completely rational (personal and organizational rivalries, prejudices, etc.) that can also influence decision making, but those are harder to pinpoint.
2 As Mussolini said when he declared war on France and UK despite being completely unprepared: "I only need a few thousand dead so that I can sit at the peace conference as a man who has fought." And, if you are in the winning side, that is not as absurd as it sounds (Romania was completely defeated yet it was later awarded large territorial gains).
Upvote:12
Machiavelli opined in "The Prince" that if there were two powerful combatants, and you didn't join one of them, you would end up the "prey of the victor." If you pick a side and it wins, you will share in the spoils. If your side loses, "you become companions of a defeated fortune that may rise again." More to the point, Turkey was strategically placed, being able to offer or deny access to Russia via the Dardanelles, and that was all the "weapon" she needed.
When war broke out, with the British and the Russians on the same side, Turkey was torn between her historical friendliness toward Britain and her traditional hatred toward Russia. It was basically neutral toward Germany, and had a distrust of the Austrians and the Italians. But Italy dishonored its alliance with Germany (and later joined the British side), and Austria was fighting the Russians, and sometimes "the enemy of my enemy is my friend."
The Germans looked like they were winning, when Turkey entered the war in late October, 1914. They had raced across northern France before being stopped at the gates of Paris. In the east, they had just slaughtered two Russian armies near Tannenberg and the Masurian Lakes.
The "last straw" affected the Turkish navy, which had heretofore been pro-British because it used mainly British built ships. A naval minister named Winston Churchill held back two battleships, purchased by Turkey, for Britain's own use. The Germans sent two smaller ships, one of them a battlecruiser, escaped from Austrian ports, across the Mediterranean to Constantinople, and made them a gift to the Turks for use against the Russians in the Black Sea. This last act swung public opinion to the side of Germans, and caused Turkey to enter the war on Germany's side.