Is the Experience of Other Countries in SADC Broadly Similar or Different from Namibia
In March 2004, the SADC executive secretary announced a tactical plan that set out a time frame for the economic integration of the region. Some of the outlined measures included the creation of a free trade area by 2008 the establishing of a SADC customs union as well as the implementation of a common external tariff by 2010 establishing of a SADC central bank and the preparation for a single SADC currency by 2016 creating a SADC regional development fund as well as self-financing mechanism by 2005 a common market by 2012.
SADC focus was on the trading agreement among the different countries that had joined it. Currently the trading industry is not improving as expected in the African countries and it has become an alarming situation.
Literature Review
Trade is a means of exchanging goods and services and is of paramount importance to any country. This is because countries do not have equal distribution of resources and trading is a means of equalizing the resources and these eventually result in a widespread formation of regional integration. However, the distribution of these resources and the equality is questionable. In 2004, the combined Gross Domestic Product for Southern Africa was about 296.4 billion. South Africa being the regions most developed country had a GDP of 213.1 billion which was more than double the combined GDP of the other Sothern African countries. Trade creation is one of the non-monetary effects of the regional integration that should increase the transaction among the participating members due to the reduction in the custom duties. The increase in transactions should have a spiral effect that stimulates all the countries economies as well as their growth. Studies show that the actual share of Sub Sahara Africa imports and exports were slightly higher than model prediction trade. Trade among African countries is still low and has not shown any signs of growth (Foroutan Pritchett 1993).
There is a question of whether the trade agreements have been effective in the African countries especially the SADC. According to African literature and research done about SADC, developing countries have a different perception of integration as compared to developed countries. Third countries use integration as an instrument to reach economic development or industrialization while developed nations perceive integration as a way of boosting performance by improving and concentrating on the poor community. Another approach in the studies done is considering which is more important between integration and trade in developing countries.
According to studies done, one of the problems with SADC countries as well as other African countries was the dependence on raw material exportation to the developed countries. This is done to sustain their economies. Developing countries lack industrial diversification or there is inexistence of industries. This results to redirecting their imports to developed nations as a way of fulfilling their needs for manufactured and industrialized goods. And this can be pointed out as the major reason why South Africa is way ahead of majority of the other member countries of SADC. Trade among the SADC members is very minimal and this is justified by the low levels of industrialization and diversification among the countries. For example South Africa has the traditional trade structure of a developing country in its total trade but in intra-regional trade it is similar to a developed country. South Africa does not have options when it comes to industrialized product demand so it has to follow the patterns of developing countries and import from developed countries. This means that the creation or diversion of trade which leads to increase of terms of trade among SADC countries is very important.
By using the concept of trade creation and diversion, an analysis of SADC will be done in order to see the benefits that are acquitted to the members. This will be done using Namibia as the case study. The study should be able to determine whether the conditions of Namibia are extended to other SADC countries allowing a generalization of the SADC effects on its members. The study should also determine whether there are any improvements in the countries when they are members of SADC. The study should also help identify which of the two is more important creation of regional trade or diversification of goods for trade which eventually would force countries to trade independently. There is importance of infrastructure, sound policies and institution but would they be as important if there was no diversification and trading of goods. The study should identify the reason why the trading levels in African countries are low. This study focuses mainly on regional integration.
Main Aims and Objectives of the Study
According to the review done previously, SADC has played a major role in various aspects of the economy of developing countries. The aim of this study is to highlight the role it has played in economic regional integration for its members. It should also highlight the reasons why SADC does not play the intended roles that have been stipulated on paper but not in practical terms. In 2004, there were stipulated roles of what the SADC should help the members to attain but most of those plans have not been fulfilled. There are benefits that the members of SADC have gained and this study should stipulate them. Using Namibia as the case study, through the study one should be able to see the benefits as well as drawbacks it has experiences due to this membership in the SADC. There should be analysis in weather the conditions of Namibia could be extended to the other members of SADC.
Definition of the Research Problem
Using Namibia as the case study, the study intends to analyze the role of SADC in the countries that are members. There are benefits and setbacks of being a member of SADC but the question is whether there is equalization of resources if the conditions in Namibia can be compared to other countries that are members and appear to be similar. This study should also show the effectiveness of SADC and the limit it has as a result of the conditions in its member countries.
The Main Concepts and Variables of the Study
The main concepts of the study are trade creation and the diversification of resources among the countries that are members of SADC. There should be a set of hypotheses from the theories of econometrics as well as regional integration. The concepts from the gains due to the exchange of goods and services as well as the gains from specialization should be identified. There should be a way of presenting the comparative advantages of the countries being members of SADC. The patterns of trade should be put into consideration as it was earlier identified that the perception of economic integration in developing countries is different from developed countries. There should be use of economic models. In order to accomplish the analysis the above concepts and variables are very crucial.
Methodology or Research Method
There are two types of data required in this study quantitative and qualitative data, which could be collected as primary or secondary data. Putting into consideration the concepts above, the main source of data will be collected as secondary data throughout this dissertation. Consequently the consultation of electronic library, internet will be the strategic point of collecting secondary data. There should be use of graphs and tables to evaluate Namibias pattern of trade. There should be the use of SADC work as a sample, either area sampling or size sampling which should show a fair representation of the population which is Africa. As an inexperienced researcher, it would be wise to consult with experts of trade, and my supervisor to ensure accuracy and success in this project.
Expected Outcome of the Study
Expected outcome of the study involves producing a useful as well as practical analysis of SADC under the perception of the gains generated to increase the actual trade. The production of a study that may be of practical use for the improvement of SADC is important such as the information and conclusions draw could add value to SADC and its members. The study should help improve the theories for economic regional failure of Africa and come up with ways to alleviate the burden in developing countries. This study should be of particular use to Namibia since it is used as the case study.