How BRICS Impacts the South African Economy Using Macro-Economic Indicators - Example

The paper "How BRICS Impacts the South African Economy Using Macro-Economic Indicators" is an outstanding example of a macro & microeconomics capstone project. This chapter is the opening chapter of the dissertation. It provides an insight into the background of the study, the fundamental essence of this chapter is to set up a framework for the rest of the discussions and provide an outline for the rest of the chapters of this dissertation.Background of StudyMost countries around the world seem to have some kind of resentment towards an American-led global economic order.

Many countries have criticized the Bretton-Woods system which was set up after the Second World War to foresee the affairs of countries around the world and ensure that nations participate in a global order on the basis of their economic productivity within a Capitalistic framework. However, the inherent feature of the American-led Bretton-Wood system was that it sidelined the former Soviet Union (now Russia), China and other nations of the Third World (developing countries of today). Hence, the structures of the Bretton-Woods arrangement and its related institution sideline these countries to-date and even though they are economically powerful today, most of the leading nations have a limited representation in the present international orderBRIC (Brazil, Russia, India and China) was formed as an acronym put forward by Jim O’Neill in 2001.

O’Neill was the chairman of Goldman Sachs’ Asset Management unit and he used this to refer to a group of emerging markets that could rise to the level of top economies around the world. Afterwards, BRICS held a series of high-level diplomatic summits and this commenced in 2006. Afterwards, there were numerous agreements and treaties were formed which sought to improve the bargaining power in global affairs. South Africa was adopted into BRIC and the name was converted to BRICS. The interest in BRICS is steeped in the fact that it involves emerging countries that were traditionally excluded from the global order.

Hence, the new prospects in relation to population growth and economic growth make it a major target for businesses around the world. It is estimated that GDP in these four countries will rise from 43% of the world’s GDP in 2015 to 55% of the world’s GDP in 2025. This will mean GDP in BRICS is estimated to rise at an average of $2 trillion per annum over this period and it is expected to rise significantly over the years.