<p>This is an implausible scenario for a country of any size, the problem being how the imported goods would be paid for.  An individual retailer might pay for its imported goods out of income from sales to other residents of the country.  But for the country as a whole this would not work: there has to be sufficient income <em>from foreign sources</em> to pay for its total imports. The only exceptions would be if the country were running down its assets, or borrowing from abroad, neither of which could continue indefinitely.</p>

<p>In theory the required income could come from a) re-export at a profit of imported goods, and/or b) sales of imported goods at a profit to incoming tourists. However, even with clever marketing, it seems unlikely that (a) could be achieved on any scale if it involves no physical processing to add value, in competition with foreign suppliers operating by more direct routes. So far as (b) is concerned, even if the country has natural tourist attractions (eg scenery, heritage), to bring in many tourists would require "tourism infrastructure" (transport, hotels, etc) that is not normally considered part of "retail".</p>

CC BY-SA 3.0
2016-06-22T12:49:09.003Z
2016-06-22T12:49:09.003Z
Adam Bailey
<p>Can a country's economy,where everything is imported from other countries, solely depend on the income from its retail industry?</p>

CC BY-SA 3.0
2016-06-22T11:17:04.247Z
By "everything is imported", do you just mean that the country imports all its goods?  Do services feature in your scenario?
Adam Bailey
CC BY-SA 3.0
2016-06-22T11:58:44.700Z
@AdamBailey For example, we can sustain a house doing retail business; buy the goods, sell in higher price,and get the profit. Is it possible in a large scale like for a country? Can a country be sustained based only on retail industry (where say every citizens have their own retail business (and nothing else); they import goods from other countries and sell among themselves)?
NisH
<macroeconomics><gdp><international-trade><international-economics>
How does an import driven economy function?
NisH
# How does an import driven economy function?

(Asked by: username_0 on 2016-06-22)

Can a country's economy,where everything is imported from other countries, solely depend on the income from its retail industry?

**Tags:** macroeconomics, gdp, international-trade, international-economics
> **Comments:**
> **username_1**: By "everything is imported", do you just mean that the country imports all its goods?  Do services feature in your scenario?  
> **username_0**: @AdamBailey For example, we can sustain a house doing retail business; buy the goods, sell in higher price,and get the profit. Is it possible in a large scale like for a country? Can a country be sustained based only on retail industry (where say every citizens have their own retail business (and nothing else); they import goods from other countries and sell among themselves)?  

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## 1 answers

### Answer by username_1 on 2016-06-22. Score: 0 | Accepted answer

This is an implausible scenario for a country of any size, the problem being how the imported goods would be paid for. An individual retailer might pay for its imported goods out of income from sales to other residents of the country. But for the country as a whole this would not work: there has to be sufficient income *from foreign sources* to pay for its total imports. The only exceptions would be if the country were running down its assets, or borrowing from abroad, neither of which could continue indefinitely.

In theory the required income could come from a) re-export at a profit of imported goods, and/or b) sales of imported goods at a profit to incoming tourists. However, even with clever marketing, it seems unlikely that (a) could be achieved on any scale if it involves no physical processing to add value, in competition with foreign suppliers operating by more direct routes. So far as (b) is concerned, even if the country has natural tourist attractions (eg scenery, heritage), to bring in many tourists would require "tourism infrastructure" (transport, hotels, etc) that is not normally considered part of "retail".


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