Sample Exam Questions 


Outline the factors which have led to the increasing globalisation of the world's economy and assess the social effects this has had in LEDCs.


   Globalisation can be defined as the way in which individual nations are becoming connected to each other and, in the process, reliant on each other. This process has been caused by a variety of factors and the social impacts on people and society as a whole have been very wide ranging.

One factor that has led directly to the connecting of different countries has been the development of improved technology and communications. Almost the whole world is now linked by telephone and internet lines for instance allowing a rapid spread of ideas between nations thus contributing to a globalisation of the economy – services and products are now available across the globe because of this change.

   An improvement in transport systems has also caused globalisation. Economies of scale have allowed many transport operations to radically reduce in price. Bulk carriers and containerisation have allowed exports to become cheaper – and this has resulted in an increase in world trade. Therefore countries around the world are able to trade with each other and the economies of separate nations become interlocked. In Ecuador for instance more than 2 million are directly involved in the banana business – the bananas are shipped overseas and Ecuador is the biggest supplier in the world.

   Trade blocs have further resulted in economic globalisation. The EU is one example of a trade bloc and is the most complex and highly developed. Its members which are increasing in number regularly benefit in free trade between themselves and the EU may decide to trade on preferential terms with other countries. The EU alone is responsible for more than 39% of global imports; this demonstrates the way in which trade blocs have increased world trade and consequently the globalisation of economic globalisation. Trade blocs can also influence decisions made in other countries; the Korean company Lucky Goldstar invested in Newport Wales at a cost of £1.7 billion to take advantage of being within the EU and therefore receiving preferential treatment.

   Finally, the development of TNCs has been extremely important in causing a globalisation of economic activity. Whereas factors such as better communications and improved transport have encouraged economic globalisation this is a direct example of the cause. Many companies have shifted production units overseas to benefit from a cheaper labour force, reduced land costs and less stringent environmental pollution controls. Nike, an American company, now produces all of its shoes and products in LEDCs, RICs and NICs for such reasons. Many of Nike’s subcontractors are located in Indonesia (around 40% in 1997), but production is also increasing in countries such as Vietnam (0% in 1995; around 10% of total production in 1997). This allows Nike to source out the cheapest production, demonstrating how globalisation has been caused; one company will invest in several countries overseas.

   The social effects of globalisation can be seen on a variety of scales in LEDCs – nationally, locally and within the family.

   Globalisation has caused important social changes within families. Many of the jobs provided by TNCs are factory work which is offered to the local women. The wages paid by TNCs are usually greater than the national average. The average wage in a Nike factory in Vietnam for instance is $54 a month, three times the national average of 18$ a month; consequently the traditional roles of women are changing as they leave the home during the day and often earn more than their husbands. Traditional society and the gender roles therefore are changing due to globalisation. With the advent of higher wages, further social changes are evident within the family; consumer goods such as televisions may be purchased for instance. On a more negative side many see economic globalisation as a social threat – workers are often subjected to poor working conditions although it is true to say conditions in many factories such as those owned by Nike are improving.

   Social improvements have taken place at a local level in those areas surrounding the factories. The multiplier effect has set in as more factories have opened, creating a demand for labour and consequently a rise in wages. With more spending power, services and a general growth in shops and business nearby occurs. This is a social improvement as more services will change the life style of the local people and increased wages reduce poverty – almost have of the people have risen from abject poverty in Vietnam for instance.

   Finally, on a national level, society may change as a whole. As globalisation occurs, and Americanisation of society takes place – this is particularly true in South Korea for instance where McDonalds and Coke are now well known brands. With more foreign investment, the government is able to make many social improvements for its people – such as better healthcare and schools. In China, now a NIC, over half now enter higher education.

   In conclusion then, globalisation has been caused by a variety of factors and has a very diverse range of social impacts in LEDCs.