The Tragedy of Otranto took place on 28 March 1997 when the Albanian ship Kateri i Radës sank in a collision with the Italian corvette Sibilla in the Strait of Otranto and at least 84 Albanians, aged 3 months to 69 years, lost their lives. The emigrants had been part of a large migration of Albanians to Italy during the 1997 Albanian civil unrest, that began after the collapse of several large-scale pyramid schemes. To prevent the unauthorized entry of migrants into Italy, the Italian Navy set up a procedure to board Albanian vessels whenever encountered, implementing a de facto blockade.

In 1997, widespread civil unrest struck Albania due to economic problems in the country, that were caused by the collapse of pyramid schemes. Due to the large quantities of money robbed from the government to fund the schemes, the Democratic Party's government collapsed in January 1997. More than 2,000 people were killed in the conflict until its end in August 1997. The creation of a new government came as the revolutionaries surrounded Tirana. Various other sources also describe the violence that ensued as a rebellion or even a civil war.