Consequences Of Terror Incidence Towards Bilateral Trade Flows

The essence of this dissertation is to ascertain how the threat of terrorism in the Southern African Development Community(SADC)has weakened trade relations with many other trading partners.The research will therefore foster to determine the level of economic damage that is being caused by terrorism with regard to international commerce development within the region.The SADC region is made up of sixteen independent countries which joined at different period of time.Established in 1992,SADC is committed to Regional Integration and poverty eradication within Southern Africa through economic development and ensuring peace and security.In other words,the Southern African Development Community(SADC)is an inter-governmental organisation whose goal is to promote sustainable and equitable economic growth and socio-economic development through efficient productive systems,deeper co-operation and integration,good governance and durable peace and security among sixteen Southern African Member States.Terrorism is one impending factor that could hinder the development of a country as an incessant incidence of terrorism will be scarier and hinder the encouragement of economic development in areas of its occurrence.Following acts of terrorism in the region,the African continent,and the wider world,SADC remains concerned about threats to the social and economic development and security of its Member States.The SADC region has trade relations across different countries,many of which are advanced countries based on economic progress measure in the level of per capita income.This research has proposed to ascertain if the negative level of terrorism with respect to the regions trade is selective of economic development level of trading partners.This research is designed to effectively provide improved solution on the issues that are central to the academic exercise and the central discussion of the research.Both the descriptive statistics and empirical analyses will be outlined hand-in-hand in this dissertation.The empirical analyses will be tested with 104 selected countries,SADC region inclusive.That includes the 16 SADC countries and its 88 other trading partners.The 88 trading partners were selected on the basis that these are the highest trading partners with the SADC region and therefore were the most relevant and significant countries to include in the empirical analyses.The essence of which is to ensure all-inclusive outcome in the analyses.The samples will be segregated by regions as well as by level of economic development.The regions that will captured in this research includes Africa,Asia,Europe,North America,South America,Australia and Oceanic regions.Based on economic development,the samples will be segregated following the world bank differentiation of countries' income level;low-income countries,Medium-income countries and high-income countries.All separations are in line with the essence of this research work.To achieve the empirical essence of the dissertation,an appropriate methodology was carefully selection and employed for generation of inferences.The research employed a gravity model approach for analyses and Poisson Pseudo Maximum Likelihood(PPML)together with pooled OLS was used for trade analyses.Though pooled OLS was also used,PPML technique was preferred for interpretation.Adequate fixed effects were captured during estimations.With respect to analyses on the effect on economic growth,terror incidence was integrative in a neoclassical growth model and was estimated with Autoregressive Distributive lag(ARDL)method-due to its robustness and stability in panel estimation.The outcome of the research work has proved that the increasing number of terrorism in a particular country could deter the progress of international commerce.Invariably,international business will flourish more in a peaceful environment.The results revealed that there is a negative effect from terrorism on bilateral trade flow in SADC region.This negative effect has been a hindrance on trade between the region and its international trade partners.it further revealed that developed countries are more sensitive to response to terror incidences likewise countries within the Europe region.By and large,terrorism also negatively influence economic development of the region.The actions of the terrorists are always coordinated and may have occurred,as it always does,across borders.With alliance within the region,there will be that coordinated effort from the security agencies in the respective countries of the region.This will also facilitate the sharing of arms and ammunitions to fight terrorism in the region.In Africa,South Africa is the major supplier of arms and ammunitions and their membership of SADC could as well,be an added advantage to all the community members as it will facilitate the sales of such arms to all the security of the needed member countries.In so doing the arms will also be used for the security of the alliance as whole.