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Countries with Traditional Economy

Common examples of countries with traditional economy include Bhutan, Haiti, and Papua New Guinea. The traditional economy is the oldest economic system known to man. It is a system in which individuals rely on trade by barter rather than the use of money to purchase the goods that they need. In this system, the economy largely depends on the products that can be produced or obtained from the environment, communal bonds, and meeting individual or household needs. Due to these distinct traditional economy characteristics, every economy in existence today began as a traditional economy and evolved over time into other systems.

Currently, there are very few countries with a traditional economy, this is because most countries have moved away from this economic system and embraced other economic systems such as free markets, socialist, command, or mixed economies. Instead, traditional economies are more readily found in rural communities in different parts of the world. In this article, we shall look at both communities and countries with traditional economies.

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Traditional economy definition

A traditional economy may be defined as an economic system characterized by producing goods and services to meet individual and communal needs rather than profit-making. It differs from socialism which shares this feature of not seeking profit by having the exchange of goods and services through the barter system. Usually, the production, distribution, and exchange of goods and services are done using laid-down patterns that have been used for centuries and passed down from one generation to the next.

In a traditional economy, the questions of how to produce, for whom to produce, and in what quantities to produce are answered based on long-standing customs and traditions. This kind of economy is often found in underdeveloped or developing countries or communities which depend on older economic activities such as farming, hunting, gathering, and cloth weaving for their survival. Children born in a traditional economy usually inherit the jobs that their parents do.

For instance, if one’s parents are farmers, their children grow to become farmers too. This is because the parents are expected to pass down all that they know and have learned from the previous generations before them. Due to this early exposure, most individuals in a traditional economy are often highly skilled in their inherited line of work.

Countries with traditional economy
Countries with traditional economy

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Which countries have a traditional economy?

All countries in existence today started out as traditional economies before evolving. Countries that currently have traditional economies or at least have some parts of their citizens still adopting a traditional economy include Papua New Guinea, Haiti, and Bhutan. Additional countries with traditional economies include the Democratic Republic of the Congo, Australia, Greenland, Canada, Tanzania, Kenya, Argentina, Chile, and Brazil.

Read about: Free enterprise examples of countries

Examples of countries with traditional economy

  1. Haiti
  2. Papua New Guinea
  3. Bhutan


Haiti is perhaps the most commonly cited example when discussing countries with a traditional economy. Although the country’s economy is highly regulated by the government which tilts it more towards a command economy, the fact that a significant portion of the population (about 50%) works in agriculture and the low levels of modern healthcare and other infrastructure makes most parts of the country a traditional economy. Traditional farming methods, such as small-scale subsistence farming and the cultivation of staple crops like rice, corn, beans, and sugarcane, are prevalent.

According to a report by the Worldbank, about 96% of Haitians are vulnerable to natural disasters such as earthquakes, hurricanes, and floods. This vulnerability is one of the traditional economy cons faced by individuals that depend on the environment for their survival. Informal markets and local trade play a crucial role in Haiti’s traditional economy with many people engaging in small-scale entrepreneurship and informal businesses, such as selling goods in local markets or street vending.

In recent years, efforts have been made by the government of Haiti to attract foreign investment, promote industry and manufacturing, and improve infrastructure. Through the U.S. – Haiti bilateral cooperation, the United States has made efforts to provide substantial humanitarian assistance in the country to enable the most vulnerable Haitians to better meet their basic needs in health and nutrition. They have also made efforts to support economic growth, enhance democracy, poverty reduction, and promote respect for human rights. These efforts are gradually transforming the traditional economy of Haiti.

Papua New Guinea

Another country with a traditional economy is Papua New Guinea. The country occupies the second-largest island in the world and is prone to tidal waves, volcanic activity, and earthquakes. This, combined with the rugged terrain and high cost of infrastructural projects has greatly hampered the rate of infrastructural development. BBC reports that over 80% of the population live in rural areas with many living in isolated mountainous regions that are dependent on subsistence agriculture and do not have a monetary economy. Due to the traditional economy, daily life in the country is centered around family with traditional practices such as fishing, hunting, gathering of timber, and farming being the major occupations.

Surpluses are exchanged by barter or through gift-giving. Most economic activities are accompanied by rituals to ensure success and this tradition has been passed down through generations. Dance and music are an inherent part of these rituals and also serve as marks for different celebrations such as initiation to adulthood, the birth of a new child, peacemaking, death, etc. Although the country has a government headed by the head of state, governor-general, and prime minister, the country’s constitution upholds traditional communities and villages as a viable part of society. It, therefore, recognizes the importance of these traditional communities and villages in enhancing local and national community life.

Previously, the social system of the Papua New Guinea highlands created separate sleeping quarters for men and women. The men slept in men’s houses while the women and children slept in garden houses. This system has been upheld for centuries, but the recent influences from foreigners are gradually eroding several cultural practices in this traditional economy.


Another traditional economy country is Bhutan. This country has preserved its cultural heritage, traditions, and environment through the years due to its isolation from the rest of the world. The economy is based on the sale of hydroelectricity to neighboring India, agriculture, weaving, and forestry. Agriculture employs over 55.4% of the population and comprises subsistence farming and animal husbandry. This is usually done in the country’s fertile valleys and savannah regions. Due to its largely preserved natural environment, tourism is a thriving industry. The government charges a $200 sustainable development fee from tourist daily and requires them to engage the services of tour guides.

The level of infrastructural development is still low due to the expensive cost of development and the mountainous nature of the country. As is common in all traditional economies, skills are usually passed down from parents to their children. Households own property and inheritance is usually allocated to a person’s female offspring. This is based on the Bhutanese tradition that male children should work to establish themselves and gain personal property. An example of a tradition that has been upheld in the country is arranged marriages among acquainted families.

Additional countries with traditional economies

  1. Argentina and Chile
  2. Brazil
  3. Tanzania and Kenya
  4. Democratic Republic of Congo
  5. Australia
  6. Greenland and Canada

Argentina and Chile

Although both Chile and Argentina are typically not classified as countries with a traditional economy, the Neuquén provincia of west-central Argentina and the central valley of Chile where the Mapuche people reside largely have a traditional economy. The Mapuche people comprise 3 groups; the Mapuche, Picunche, and Huilliche who speak the Mapudungun language. These people have farming, fishing, hunting, cloth weaving, and animal rearing as their major occupations. Males are often involved in hunting, fishing, farming, and animal rearing while females are involved in cloth weaving, farming, and housekeeping.

The name, Mapuche is translated as the people of the land; they live and have their sustenance from the land. Hence, typical Mapuche buildings are devoid of floors as the people appreciate the need to be constantly in direct contact with the soil. The Mapuche live in isolated villages with each village overseen by a chief (Cacique). Individual wealth was often measured by the size of the llama herd a person has. Farming was done collectively by the community and the harvest was usually shared by households based on their size.

The Mapuche people became famous for their resistance to the Spanish from the 16th to the 18th century when various Mapuche villages came together to form economic, military, and political alliances to protect themselves and their land from inversion. The Mapuche have also struggled against Chilean domination. Over the years, some Mapuche have migrated to urban areas such as Santiago and Buenos Aires for economic opportunities. However, those that still reside in the rural areas largely maintain a traditional economy to date.


Brazil is another country with a traditional economy due to the presence of the Indians that inhabit the Amazon rainforest. As with all other traditional economies, skills are taught to children from an early age to aid them in effectively coexisting with the wild animals found in the forest environment while sustainably using its products for their survival. They believe that animal spirits inhabit all things, hence when they hunt, fish, or farm, they do so with respect for the spirit of the rainforest and all that dwells within it. Shamans are seen as spiritual guides and intermediaries with the spirit world.

Amazonians were once nomadic, living temporarily in a particular settlement and moving on to a new one once the available resources there get depleted. However, the colonization of land and the interest of foreign investors and the government in tapping some of the resources of the forest has forced a large percentage of the Amazonians into a sedentary lifestyle. Thus, most native Amazonians now live in protected areas in settled villages either deep in the forests or by the rivers. Traditional houses are communal structures that may house between 100-400 individuals and are mainly made from straw, bamboo, and wood. Decision-making is through group discussions where everyone has a say.

Roles are generally assigned based on gender with women running the house, cooking, caring for the children, and growing food crops some plants such as vegetables, corn, beans, and manioc. Hunting and gathering are major occupations for Amazonian men. They hunt using bows and arrows, spears, or blowguns and gather edible plants from the wild. Activities like fishing are considered a communal duty with every member of the family being an active participant in the fishing process. They fish traditionally using plant-based poisons to stun the fish.

Despite the evolution of the country around the Amazon forest, some indigenous tribes are still uncontacted. This means that they have not had any contact with people outside their tribe and still maintain their traditional way of life.

Tanzania and Kenya

Additional countries with traditional economies are Tanzania and Kenya. These countries have a traditional economy in northern Tanzania and southern Kenya along the Great Rift Valley on semi-arid and arid lands where the Masai people reside. During the slave trade era, the Maasai people stood firm against slavery and lived alongside most of the land’s wild animals. The society is largely egalitarian as slaves are not kept. They are historically nomadic people that rely on resources that are available in their immediate environment. The Masai diet consists of raw milk, blood, meat, and honey.

Houses (Inkajijik) are loaf-shaped or circular and made from a combination of mud, dung, and sticks. These houses are usually enveloped by a circular fence (Enkang) to protect the people and their livestock from wild animals. Inkajijik is usually constructed by women while Enkang is constructed by men. Cattle rearing is the main occupation and cattle are the primary source of food.

Maasai society is firmly patriarchal and males within the same age group get initiated to adulthood by way of circumcision during the same open-initiation period. They move from one age class to the next with each class lasting about 15 years. Decision-making in the community is left to the elder Maasai men. The Maasai believe that burial is harmful to the soil, hence they do not bury their dead. Instead, they leave them out in the field to be fed on by scavengers; burials are strictly reserved for great chiefs.

Due to modernization and the infiltration of the Western way of life in Tanzania and Kenya, a considerable number of Maasai people have migrated to urban towns; leaving the nomadic lifestyle behind and embracing a sedentary lifestyle and other kinds of occupations aside from cattle rearing.

Democratic Republic of the Congo

Congo is another country that has a traditional economy prevalent in its eastern part where the Mbuti and Bantu people live. They have resided in the Ituri Forest for over 2,000 years, maintaining the cultural, traditional, and economic practices of their ancestors. The Mbuti people who are also referred to as Bambutu comprise the Sua, Aka, Efe, and Mbuti who are traditionally nomadic hunters and gatherers. The tropical rainforest provides their basic needs of food, fresh water, firewood, and clothing. The Bantu people are traditionally farmers that engage primarily in shifting cultivations. They are more stationary as they live in villages.

Hence the Mbuti and Bantu people form an economic bond where they exchange goods amongst themselves through the barter system. The Mbuti bring diverse forest products such as edible mushrooms, Bananas, firewood, medicinal plants, bushmeat, thatching, and construction materials which they exchange with the Bantu or Sudanic for maize, potatoes, and other cultivated crops.

The Mbuti people do not have a formal council of elders or village chief, instead, they have some form of democracy where disputes are settled through general discussions. Dance, mime, and music serve as a means of religious expression and also reinforce accepted values. Hunting is carried out using trap nets, spears, or bows and arrows. They value family bonds that last throughout a person’s lifetime as they move from one settlement to the next, hunting and gathering as a group and sharing the animal or collected fruits amongst themselves.


Before the colonization of Australia by the British, it was one of the countries with a traditional economy sustained by the Aboriginal Australians. The Aboriginal people comprise First Nations peoples of Australia’s mainland and islands, speaking over 200 different Aboriginal languages. This traditional economy was deeply rooted in cultural practices that were dependent on the land as the people aimed to maintain the delicate balance between human needs and the preservation of nature. Through primitive agricultural techniques of controlled burning and selective harvesting of crops, Aboriginal Australians actively shaped their landscape to promote the growth of certain plants, encourage animal populations, and enhance resource availability.

Similar to the Mbuti people of Congo, the Aboriginals were predominantly hunter-gatherers that had an in-depth knowledge of the forest around them. This knowledge was passed on from one generation to the next and it facilitated their ability to hunt animals and gather fruits from the Australian forest. Due to the presence of desert regions in the country and the seasonal availability of resources, there was a need to balance the population with the available resources. Thus, Aboriginal groups practiced a nomadic or semi-nomadic lifestyle, moving in accordance with the seasonal availability of resources. They had a sufficient understanding of the natural cycles, migrating to different regions to take advantage of various food sources and water supplies.

The need to balance population with resources meant that they lived in small groups but aggregated into large groups when the seasons permitted due to the availability of food. This time of aggregation was characterized by the sharing of food, resources, and knowledge; ensuring that everyone had access to what they needed. It was also an opportunity to engage in various social and religious activities thereby fostering a sense of reciprocity, interdependence, and social cohesion within Aboriginal societies.

Trade and economic exchange between different Aboriginal groups were common practices and was done through the barter system. Goods such as ochre, stone tools, ceremonial objects, and other items of cultural significance were exchanged between different aboriginal tribes.

Greenland and Canada

Greenland and Canada are additional countries with traditional economies, this is due to the presence of Inuit who inhabit the arctic and subarctic regions of these countries. The Inuit are highly dependent on and adapted to the extremely cold snow- and ice-bound environment which is typical of the arctic regions in which they live. Due to this extreme weather, vegetable foods are almost nonexistent and trees are scarce. They wear very thick clothing made of caribou furs to protect themselves from the extreme cold.

The Inuit people live in semisubterranean houses built from sod or stone over a whalebone or wooden framework or in snow-block houses, known as Igloo in the winters. They live in animal-skin tents during the summer.

The Inuit implement a traditional economy based on fishing, gathering, hunting, and native craft production. These people use the products obtained from these economic activities for their sustenance and barter surpluses with their neighbors or occasionally sell them to outsiders.

They also have a cooperative communal way of life which encourages the sharing of resources among each other. This helps them to survive the long harsh winters. Various species of whales, caribou, seabirds, seals, walruses, and fish are the major food sources. Thus, the typical Inuit meal is high in protein and fat. Other components of the meal may comprise plant stems, seaweed, berries, tubers, and roots that were available in their environment.

For decades, the Inuit teach their kids how to survive in the harsh Arctic, passing the knowledge gained from one generation to the next through oral history. This means that older Inuit are the knowledge repositories of the community and are often consulted about several issues. Set patterns of life are followed with the 3 widely defined patterns being: what has to be followed (maligait), what has to be done (piqujait), and what has to be avoided (tirigusuusiit).

In recent years, the Inuit people have faced considerable challenges due to global warming, causing the shrinking of their communities. The major means of transportation which used to be dogsled have also been largely replaced by snowmobiles. Urbanization, language erosion, and economic inequalities when compared to other individuals within parts of Greenland and Canada that are not Inuits communities are additional challenges faced by this traditional economy example.

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Is the US an example of a traditional economy?

The United States is not wholly a traditional economy. However, some parts of the state of Pennsylvania where the Amish people are found is an example of a traditional economy. Despite the evolution of the world around them, the Amish people have generally not accepted the tools and advancements of the digital revolution.

They still use the horse and buggy as a means of transportation and carry out their farming and other economic activities in a way that preserves the environment through the sustainable use of resources. Amish children commonly inherit their parent’s line of work and end formal education at grade 8. Additionally, some Inuit people who also maintain a traditional economy are found in the state of Alaska.

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Countries with traditional economy are numerous. This is because although most countries in the world today have adopted other economic systems, several communities within these countries still operate a traditional economy. In traditional economies, economic activities are often based on customs, traditions, and longstanding practices. They typically involve subsistence farming, hunting, gathering, weaving, fishing, bartering, and local trade.

Some countries with traditional economies include Haiti, Bhutan, and Papua New Guinea. Other countries that have some parts of their citizens maintaining a traditional economy include the Democratic Republic of the Congo, Australia, Greenland, Canada, Tanzania, Kenya, Argentina, Chile, and Brazil. These countries comprise places that are home to the Inuit, Maasai, Amazonians, Mapuche, Mbuti, Bantu, or Aboriginal Australians.