Economics

Trade is an activity which has been pursued since the dawn of human civilization and is an indispensable part of the modern day economic system. Being able to play an increased role in the global trade has is one the factors that has changed the fortunes of many under-developed countries and help the substantially reduce the development gap (Catch-up) with the developed world. Inspite of this, trade between African economies remains low and this dissertation seeks to answer this question and look at the possible steps that can be taken in order to rectify the situation. For instance, the dissertation will examine whether or not trade needs to be created (by specialisation and diversification) in order to late create instrument which can boost trade as a tool for achieving regional integration. The dissertation will focus mainly on the dynamics of regional integration and examine whether trade agreements have been effective for African countries in general and SADC (South African Development Corporation) in particular and look at the case of Namibia in SADC as a way of illustrating the key concepts.

Conceptual Foundation of the Research
This study intend to analyse the role of SADC for its countries members by using Namibia as case study and see if its situation are similar or different to others members in order to boost intra-trade among African which is very low. It use the actual situation of Namibia to measure the effect of SADC over its participants and access it effectiveness as a regional organisation and discover the SADC limitation as result of members conditions.The research will examine and use the following main concepts and variables as a means of answering the research question- Concept trade creation and diversion- A set of hypotheses from the theory of regional integration or econometric evaluations - Gains from exchange- Gains from specialisation- Comparative advantages- Pattern of trade - ModelConcepts as the above are paramount importance to accomplish this analysis and arguably explain the emergence of trade cooperation not just in Africa but the world itself.

Background
The very low trade among Africans countries is an endemic situation in the the continent. This lack of trade can be pointed out by some literature as one reason for their prevailing underdevelopment and economic stagnation. Trade, as means of exchange of goods and service, is of paramount important for any country. Trade can be especially beneficial in situations where there isnt an equal distribution of natural resources and can serve as a precursor to the a formation of regional integration as an attempt to further these exchanges. However, the distribution and the gains attained form regional integration is many time questionable (for instance in case of the North American Free Trade Area (NAFTA) it has been argued that gains of the regional cooperation have been tilted heavily in favour of USA).

However, trade creation as one non-monetary effect of regional integration can increase transaction among the participating members as a result of reduction of customs duties. This increase in transaction can have a spiral effect which stimulates countries economies and their growth (arguably in the case of ASEAN).

Foroutan and Pritchett (1993) show in their study that the actual share of Sub Sahara Africa (SSA) imports plus exports was slightly higher than model prediction (model of the determination of trade flows) trade among African countries still undeniably low and hasnt shown signs of growth. Hence, this raises the question of efficacy of trade for the African countries in general and SADC in particular. The inspection into African literature and SADC showed the surprising affirmation that developing countries sees integration under different perception from those of developed ones. While third countries use integration as an instrument to reach economic development (industrialisation), developed nations on the other hand see integration as a way boost relative growth performance by fasting growth on poorer members than richer one. This certainly has led me to question whether the right approach is being use by developing country to implement and see regional integration. This issue is extremely important and lends itself to several questions such as whether regional integration more important than trade itself Or regional integration should result from a need to enlarge an existent pattern of trade According to literature (Distribution of gains...) one of the problems with SADC countries and most Africa is the dependence in raw material exportation to developed countries (to sustain their economies), the lack of industrial diversification or inexistence of industries which redirect their import to developed nations as the only way to fulfil their need for manufacture and industrialised goods. And this can be pointed as the reason for South African huge comparative advantage over others SADC members. Yet with such low level of industrialisation and diversification among SADC is quite justifiable that trade among SADC is so small. For instance 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. As there isnt too much option inside the region for South Africa for industrialised product demand it must follow pattern of others SADC members and import them from developed countries. While due to its advanced industrial level compared to others it can behave as developed country as main source of import for many countries in the region.

Therefore the creation or diversion of trade as long as it leads to increase the term of trade among SADC countries if not for all Africa is of crucial importance for SADC and Africa as direct affect by this conditionals and for the world as all as it also bear the cost of African underdevelopment by high immigration flow, increased welfare cost as in the case of UK. By using then the concept of trade creation and diversion an analyse of SADC will be done in order to see the benefit that to members countries by using Namibia as case study and see if Namibia condition is extended to others SADC countries in order to allow a generalisation of SADC effect of its members and if it has improve their condition. And finally see if the creation of regional is more important than diversification of goods t trade which force country to trade independent existing means of trade or no as infrastructures, institutions, etc. Obviously the importance of infrastructure, sound policies or institution is not in cause but whether there is utility for this instrument if there is no diversification or goods to trade.

Aims of the Research
In the context of the background and aims of research explained previously this research expects to illustrate the role SADC has played as economic regional integration for its members  and examine the following questions (making use of the main concepts mentioned previously)- Why SADC doesnt play the intended role in practical terms.- What benefit has it brought to countries states- By using Namibia as a case study it is intended to see what role SADC as an economic regional integration.- What benefit and drawback has Namibia acquired by join in SADC- Analyse either Namibia conditionals can be extended to others countries members.- Why SADC doesnt play the intended role in practical terms with Namibia.

A number of different research techniques will be employed to answer the research questions.
Methodology The collection of secondary data (either qualitative or quantitative) will serve as the main source of knowledge to about concepts which are relevant for this analyse represent one of the main methodology which will be used along this dissertation. Consequently the consultation of electronic library, the library, internet, etc will be strategic point of collection for secondary data. The use of Namibia as case study will also figure as one of the method use to do this work as well as evaluation of Namibias pattern of trade which guide me to an exploration of graph, table, etc. Additionally the use of SADC work as a sample which cans either be area sampling or size sample which shows a fair representation of the population (Africa) by manifest most of them a low intra-trade reason to lead to this study. Finally as an inexperience research a consult with more experienced person will be of crucial for my project specially an expert in trade, therefore a constant consult it my supervisor is primordial for the accomplishment of this study to understand concept, table and graph.

Conclusions Expected Outcomes
This research aims to produce a useful and practical analyse of SADC under the perspective of gains generation to increase the actual trade and hope that it may a practical use for SADC improvement. It is hoped that the information or conclusion drawn from this analyse can add value to SADC in particular as well as Africa and the world in general as a way to improve theories for economic regional failure of Africa and as externality alleviate burden on countries outside Africa. Lastly, I also hope that this analyse be of particular use for Namibia as a source of my case study and can fulfil the ultimate state in the aims exposed above to carry out this research.