CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The economic system of the world today has taken a new shape since the inception of the BRICS and they have played and still playing a very important role in the development of the world economy.

Over the last decade, the BRIC, now BRICS, term has come to the buzzing attention of the entire world. BRICS exemplify the rising supremacy of the world’s significant developing economies and their possible influence on the global economic and, gradually, political order. Brazil, Russia, India, China, South Africa, all five members of BRICS are current members of the United Nations Security Council, - Russia and China are permanent members with veto power, while the rest are non-permanent members currently serving on the council (www.un.org). The BRICS countries cover quarter of the world’s geography collectively, and more than 40% of world population lives in BRICS countries (brics6.itamaraty.gov). The BRICS are mounting swiftly, lifting people and countries out of poverty and driving the global economy.

The BRICS group started life casually when its predecessor, the BRIC bloc, was identified in the year 2001 by Jim O'Neill, a Goldman Sachs economist, as leading large and dynamic economic growth prospects for the economies of Brazil, Russia, India and China. These countries share two common characteristics, and these are a large population and an impressive rate of economic growth. In 2009, these four countries set for the first summit in Yekaterinburg where the depth and scope of the dialogs among the members about improving the global economic situation and reforming financial institutions gathered momentum. BRIC was in the urge to include one African nation in its coalition to avoid doubts as well as utilize the emerging market in Africa. Hence, in 2010, South Africa was included in the group and the group was renamed BRICS. After the Yekaterinburg Summit, five annual Summits were held (Brasilia, 2010; Sanya, 2011; New Delhi, 2012; Durban, 2013; and Fortaleza, 2014), coming to conciseness in strengthening the group into two pillars (brics6.itamaraty.gov):

(i) Coordination in multilateral fora, with a focus on economic and political governance. BRICS aiming towards reforming the structures of global governance, especially in the economic and financial fields- Financial G-20, International `Monetary Fund, World Bank - as well the reform of political institutions, such as the United Nations.

(ii) Cooperation between members in the area of finance, agriculture, economy and trade, combating transnational crime, science and technology, health, education, corporate and academic dialogue and security, among others.

This study is conducted to provide an insight on “assessment of the ‘BRICS’ on world economic development”. To achieve the objectives of this study, the paper is divided into five interconnected chapters.

Chapter one deals with the background of the study, statements of the problem, objectives of the study, significance of the study, research questions, scope and limitations of the study, research methodology and definitions of terms.

The next chapter presents the review of relevant literature which include: Overview of BRICS, Historical Background of BRICS, BRICS Cooperation, BRICS from Developing Countries to Emerging Economies, the BRICS Summits, and what Interests do the BRICS Countries Share?

Chapter three examines the impact of the BRICS on world economy and the following were discussed: Impact of the BRICS on World Economy, BRICS Relationship with the Global Economy, BRICS in Global Investment, Overview of BRICS Economy, Importance of the BRICS in the International Stage, the BRICS Financial Structure, and the BRICS Agenda and South-South Cooperation.

Chapter four deals with the problems and solutions of BRICS and the following were discussed: Problems faced by the BRICS (External and Internal Forces of BRICS Countries), Negative Forces facing BRICS countries, and Future Prospect of BRICS.

While the final chapter examines the summary of the findings, conclusion, recommendations and bibliography.

1.2 STATEMENT OF THE PROBLEM

Dayo (1999) said that without feedback uncertainty persists; feedback therefore enables the sender and receiver of the information- that is the message, to feel more confident about the accuracy of the message.

The economic system of the world today has taken a new shape since the inception of the BRICS and they have played and still playing a very important role in the development of the world economy.

The BRICS nations (Brazil, Russia, India, China and South Africa) are considered as the new building blocks of the global economy. In the background of the deceleration of the developed economies in terms of growth and economic expansion, BRICS assumed greater significance and wider acceptance as emerging super powers.

Thus, this research work aims to inquire and analyse the areas the emergence of BRICS corporation has helped to improve the economy of member countries and the world at large and to know the factors that militates against mutual and equality amongst member countries of BRICS corporation.

1.3 OBJECTIVES OF THE STUDY

The objective of the research project is to thoroughly investigate on the assessment of the “BRICS” on world economic development. Other objectives of this study include:

1. Tracing the historical development of BRICS.

2. Assessing the BRICS in relationship with the global economy.

3. Examining the BRICS bank

4. Assessing the impacts of the BRICS on world economy

5. Examining the importance of the BRICS in the international stage.

6. Identifying the problems faced by the BRICS

7. Tracing the future prospect of the BRICS

1.4 RESEARCH QUESTIONS

The key objectives of this current study were developed into a set of questions for the research project. As a result, the study addressed the following key research questions:

1. How did ‘BRICS’ originate?

2. What are the relationship with the BRICS and the global economy?

3. What are the impacts of the BRICS on world economy?

4. What are the importance of the BRICS in the international stage?

5. Are there some problems faced by the BRICS?

6. Does BRICS have any future prospects?

1.5 SCOPE OF THE STUDY

The study provides insight into the assessment of the “BRICS” on world economic development.

The study seeks to ascertain whether or not the BRICS have impacted positively on the world economy. To examine the role of the BRICS bank. It seeks to understand the problems that the “BRICS” face in carrying out their activities in the world as well as identifying the future prospects of the BRICS.

1.6 SIGNIFICANCE OF THE STUDY

This work found out more about the strategies the BRICS have used and are still using to boost their economies as well as that of the world at large. Also, to know the need for more countries to recognize the need for them to join the BRICS corporation. This paper will help the policy makers in these nations and the world in identifying the way forward towards the growth of the world economy. It also will help improve the understanding of the problems faced by the BRICS and the way out.

It will be relevant in assisting governments, individuals, businessmen, organizations and students in understanding the impacts the BRICS are making on the world economy. It will provide relevant materials for students and other researchers undertaking similar research in various Universities and Research Institutes in both Developed and Developing Countries.

1.7 LIMITATIONS OF THE STUDY

In pursing this investigation and study, lots of impediments and obstruction were encountered as the research progressed. All these impediments brought about a conspicuous clause with the research work. They include, limited availability of relevant materials, time constraint and financial conditions.

A. LIMITED MATERIALS: This study is based on information gathered from articles from newspapers and TV channels, journals of past researchers, government corporate reports on the ‘BRICS’, internet sources, archives, etc., but the study would have been more effective if the research was carried out in any of these countries. As a result of these limitations this essay relied on books, journals and article written by scholars.

B. TIME CONSTRAINT: Time was also limited to the researcher in carrying out the study effectively and efficiently. Time constraint was experienced under dual stages. One was with the sample under population study. They either schedule appointment that they cannot meet up with or complain of limited time within their work though they are willing to respond.

In addition, the other was with the researcher. The research is being carried out within limited semester time table, which include the understudy of other aspect of the course being read. This created a situation of not rescheduling meetings for more comprehensive interviews as may have been required.

C. FINANCIAL CONDITION: Financial condition prevailing within the economic system was a serious impediment. This includes transportation fare to and from school to the case organizations. Also that of extracting the essential information either through printing or photocopying of relevant materials. Finance, thus contributed immensely to limit the entire scope of the research.

Although all these obstructions were envisaged and experienced, efforts were made to carry on with the research to achieve the expected and desired result.

1.8 RESEARCH METHODOLOGY

Research methodology deals with the different ways or methods the researcher applied in order to carry out the research as well as the instrument used for gathering the data. Various types of research methodology are:

 Experimental Research

 Historical Research

 Descriptive Research

 Survey Research

 Case Research

 Correlational Research

 Ex- post- facto Research

Experimental Research

This is the type of research that directly attempts influence a particular variable and for establishing cause and effect relationships. It is the type of research where the researcher looks at the effects of at least one independent variable on one or more dependent variables.

Ex-Post Research

Ex- post-research is otherwise called casual-comparative research. It is a type of research that is used for investigating possible cause and effect relationships through the observation of an existing conditions or events that had already happened and searching backwards in time to trace the plausible causal factors.

Historical Research

Historical research is the type of research that focuses primarily on past events and occurrences. It is the type where certain aspects of the past are studied by:

 Perusing relevant documents of the past

 Examining relics

 Interviewing individuals who lived during the time under study

After collecting relevant information following the three steps above, attempt is then made to reconstruct what happened during the time under investigation.

Case Studies

A case study is the type of research where an entity such as one individual, one classroom, one school, one local government, one state etc, is studied. The entity under investigation is referred to as a case. Case study is a means of gaining valuable and at times detailed insight about the case being studied.

Survey Research

This is the type of researcher where the researcher is interested in the opinions of a large group of people about a particular topic or issue and goes out to ask his subjects questions relating to the issue of interest.

Correlational Research

This is the type of research where the researcher is out to investigate the possibility of relationships between two or more variables without influencing or manipulating any of the variables.

The type of research methodology used in this research to gather data and relevant information is the historical research and the study will adopt descriptive method of data collection. This will involve the collection of materials

TABLE OF CONTENT

PAGE

TITLE PAGE i

CERTIFICATION ii

DEDICATION iii

ACKNOWLEDGEMENTS iv

ABSTRACT v

RESUME vi

TABLE OF CONTENTS vii - ix

CHAPTER ONE: INTRODUCTION

1.1 Background of the study

1.2 Statement of the problem

1.3 Objectives of the study

1.4 Research questions

1.5 Scope of the study

1.6 Significance of the study

1.7 Limitations of the study

1.8 Research methodology

1.9 Definition of Terms

CHAPTER TWO: LITERATURE REVIEW

2.1 Overview of BRICS

2.2 Historical Background of BRICS

2.3 BRICS Cooperation

2.4 BRICS from Developing Countries to Emerging Economies

2.5 The BRICS Summits

2.6 What Interests Do the BRICS Countries Share?

CHAPTER THREE: IMPACT OF THE BRICS ON WORLD ECONOMIC DEVELOPMENT

3.1 Impact of the BRICS on World Economy

3.2 BRICS Relationship with the Global Economy

3.3 BRICS in Global Investment

3.4 Overview of BRICS Economy

3.5 Importance of BRICS in the International Stage

3.6 The BRICS Financial Structure

3.7 The BRICS’ Agenda and South-South Cooperation

CHAPTER FOUR: PROBLEMS AND PROSPECTS OF BRICS

4.1 Problems faced by the BRICS

4.2 External and Internal Forces of BRICS Countries

4.3 Negative Forces Facing BRICS Countries

4.4 Future Prospect of BRICS

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary

5.2 Conclusion

5.3 Recommendation

Bibliography