Michael M. Cernea
Sometimes, development projects force people to move from their homes and communities and subject them to economic and social hardship. This happens, for example, when hydropower dams transform inhabited areas into reservoirs, highways cut through farmland, new urban infrastructure supplants densely packed dwellings, or when ports are built on the sites of fishing villages.
The relocation of displaced populations is a formidable task, both in complexity and scale. About 70,000 people will be displaced by the Narmada Sardar Sarovar dam in Gujarat, India, and 55,000 by the Cirata hydroenergy dam in Indonesia. In Shanghai, construction of a sewerage system crucial for that city will cause houses, shops, and public buildings to be torn down and 15,000 people to be relocated. In Togo, 10,000 people were recently displaced by the Nangbeto reservoir. It is calculated that about 40 projects approved for financing by the World Bank in agriculture and hydropower during fiscal 1979-85 will cause the relocation of at least 600,000 people in 27 countries.
The Bank’s policy and operational guidelines regarding involuntary resettlement are described in a technical paper entitled “Involuntary Resettlement in Development Projects,” the World Bank, April 1988.
Compulsory resettlement has probably been the most unsatisfactory component in the construction of dams throughout the world because it often impoverishes the people who are displaced, destroys productive assets, and disrupts the social fabric. Research has found that involuntary resettlement is also associated with increased sociocultural stress, morbidity, and mortality. Environmental degradation, including lost forest and grazing lands, is compounded if the site to which people are relocated cannot sustain both the population already living there and the new arrivals.
Although compulsory resettlement is not desirable and is extremely difficult to implement, projects that make it inevitable are usually of critical importance for national or regional development. When national long-term interests conflict with the immediate interests of local groups affected by such projects, the former usually prevail. Therefore, preventative and mitigatory steps taken early in the project are essential to minimize the adverse effects of forced resettlement and to reconcile conflicting interests. Because those who bear the consequences of resettlement are rarely those who receive the greatest project benefits, it is incumbent upon policymakers in borrowing countries and project planners to provide resettled populations with opportunities to re-establish and improve their previous productive potential and living standards.
Resettlement and the Bank
During the 1960s and 1970s, the handling of involuntary resettlement in development projects was often flawed by a lack of social planning and insufficient financial and technical resources. Resettlement often was omitted from the main project design and conse-quently from the project’s institutional arrangements and financing. When resettlement was regarded as falling outside the Bank’s purview, the borrower tended to delegate its implementation to second-rank agencies which usually were not adequately staffed, equipped, or funded to carry out the task.
To address the problems caused by forced relocation, the Bank adopted in 1980 a policy and specific operational guidelines. The new policy was based on lessons learned from previous relocations under Bank projects and sociological and anthropological research on resettlement. In 1986, after assessing the first six years under its new policy, the Bank issued additional guidelines to deal more comprehensively with involuntary resettlement.
Under these guidelines, both Bank staff and borrowers are required first to explore alternative development solutions to avoid involuntary resettlement. When relocation is unavoidable, efforts should be made to reduce its scale as much as possible without compromising the project’s main goals. This can be done through careful project design and weighing of possible trade-offs. For example, depending on the topography of the reservoir area, sometimes small increments in dam height and reservoir level can greatly increase the number of people affected by the larger lake area. Conversely, small decreases in height may significantly reduce this number.
The Bank’s policy explicitly states that all resettlement programs must be development programs as well, and that measures must be taken to prevent those dislocated from becoming permanently impoverished and destitute and to improve their conditions. To achieve this goal, implications of resettlement must be examined in the early stages of the project’s preparation, to avoid their emergence as a late surprise. At the same time, a range of development options must be built into a full resettlement plan. The guidelines also direct Bank staff conducting the economic analysis to question whether the overall project benefits outweigh the adverse effects of involuntary resettlement. In calculating the total project cost, economic losses caused by taking people, lands, and forest out of production should be considered, as should the cost of measures necessary to rebuild and improve the economic base of the relocated groups.
Problems are not purely economic, but social and cultural as well. Sociological research has demonstrated that dislocation also dismantles community and kinship support networks that sustain work and living standards. People subjected to relocation feel powerless and alienated, lose cultural cohesion and are prone to becoming dependent. Therefore, the approach to resettlement operations should deal with economic, technical, cultural, and socio-organizational factors in an integrated manner. The key characteristic of the Bank’s policy is a shift from a welfare-like approach, limited mainly to cash compensation, to a development-oriented, integrated approach that can help settlers rebuild a self-sustainable production base and habitat.
Resettlement as a development effort in itself can succeed only if it is backed with institutional means and mobilizes the resources both of those affected and of the state. To move from policy to practice, the objectives of relocation must be embodied in technically and socially sound resettlement plans that are adequately financed. Such plans must contain provisions for fair and equitable compensation, physical transfer, and housing, but their backbone is a development package providing a set of economic opportunities for the settlers, through project-funded activities.
These could include land reclamation, irrigation, modified cropping patterns for increased agricultural production, orchard schemes, reforestation, job creation, vocational training, access to off-farm employment, and other kinds of lasting income-generating activities. Differences between landowners, tenants, landless or urban and peri-urban dwellers who are relocated must be taken into account so as to tailor the assistance to specific options available for re-establishing these groups, through either land-based or employment-based strategies. Such an approach is neither easy nor cheap, but it is probably the only one that effectively reconciles the needs of the individuals adversely affected with the wider needs and development goals of the country or region.
Experiences and pitfalls
Public concern has recently been heightened by involuntary resettlement operations that have run into major problems. To identify what specifically goes wrong and to find solutions, one needs to examine the early stages of such operations, when recurrent patterns of faulty approaches lead to bad results.
Difficult as it certainly is, involuntary resettlement should not be regarded as unmanageable. In fact, a great deal about resettlement processes can be predicted. This is so because, as social scientists point out, the impact of resettlement is sufficiently severe that people respond to it by using a rather small and relatively predictable number of coping strategies. The main ways in which affected persons of different backgrounds respond to different stages in the relocation process is not only a matter of interest to social scientists, but also allows planners to address, in sequence, the various phases from initial preparation to the final incorporation of resettlers at the new site.
A review of resettlement experiences in various countries, some under Bank-financed projects, reveals a number of pitfalls during the early stages that inevitably produce unsatisfactory results. Eliminating such pitfalls should go a long way towards halting and reversing negative trends and outcomes in relocation.
One problem is that the number of people needing to be resettled is chronically underestimated. In a hydropower project recently submitted for Bank financing in East Africa, the borrower’s data indicated that only 400 families (2,000 people) resided in the reservoir area. However, the study required by the Bank, and conducted by an independent team, concluded that the indigenous farming population to be moved out of the reservoir area numbered at least 15,000. In a project in Kenya (Kiambere Hydroelectric Power), the initial population estimate also more than doubled following a more thorough field review. The borrower’s preparation report for a project in Asia used 15-year-old census data, underestimating the affected population by 80 percent.
Old or incomplete social surveys, the failure to extrapolate population growth rates to the year of actual relocation, the difficulty of tracing on the ground the boundary of the future reservoir, and an inclination to play down the difficulties to be faced by a proposed project can all lead to understating the scale of dislocation. If such undercalculations go undetected, it is easy to imagine the problems that arise in mid-course when the correct population size is discovered and there are no resources to cope with it.
Another shortcoming that afflicts many projects is an engineering bias. Many consulting firms that conduct advance studies for construction of dams tend to concentrate on engineering aspects exclusively, leaving the social planning to someone else. Implicit in such neglect is an assumption that resettlement is feasible and that its cost will not have a bearing on the future of the project. Such logic can jeopardize the project’s approval or implementation. This recently happened in Pakistan where a consortium of consultants did not include in its feasibility report for a major dam a plan for resettling 80,000 people. As a result, approval of the project has been delayed, hinging mainly on resettlement issues.
Resettlement is also chronically underfinanced. Inadequate recognition of resettlement issues at the preparatory stages of a project leads to incomplete design, which in turn results in underfinancfng. Incomplete costing of the losses caused by dislocation and of the investment costs for adequate resettlement produces enormous project difficulties or disastrous relocation. For example, in a Bank-financed irrigation project in Andhra Pradesh, India, the local land acquisition agency responsible for calculating land compensation for displaced residents valued their land much below the fair market value. Besides producing an artificially lowered budget for resettlement, the undervaluation prompted many affected farmers to take their grievances to court. The Andhra Pradesh courts decided in hundreds of cases in favor of the farmers and ruled that the compensation offered by the agency must be increased by 200-400 percent.
Clearly, what are termed “cost overruns” often are the by-product of underfinancing in the initial stages of a project. Therefore, focusing planners’ attention on the financial and economic implications of resettlement early in the project cycle will result in more precise costing. It also will prompt borrowers to examine carefully the alternatives to resettlement early in the design phase, thereby arriving at acceptable and realistically financed relocation programs.
Another pitfall that adversely affects the outcome of resettlement is the tendency to ignore the host population and put excessive pressure on the environment. In a project preparation report submitted for Bank financing by an Asian country, the plan called for three or four displaced villages to be consolidated into one existing village outside the reservoir area. The combined residents of the relocated villages numbered 1,500-2,000 people. They, with 6,000-8,000 head of livestock, were supposed to fit within the existing perimeter of the receiving village, which was already at capacity with its 300 people and their own livestock. Such propositions spell quick impoverishment and economic, social, and ecological disaster for newcomers and hosts alike. These plans were corrected, but the fact that they could come out of a planning office shows how rudimentary relocation planning still is in some countries. Corrective measures at the early stages of project planning prevent resettlement from becoming an unmanageable task.
Solving the problems
To ensure consistency between Bank policy and project design and implementation, the Bank’s appraisal methods and internal review specifically for projects with resettlement components have been considerably tightened. Moreover, new and more creative approaches to resettlement are being introduced, with more careful preparation, specialized sociological analysis and supervision, and more adequate financing through Bank and local funds. Very effective among these new approaches proves to be the involvement of non-governmental organizations (NGOs) which have a strong interest in resettlement matters, generally have a good knowledge of the local situation, express resettlers’ needs and defend their rights. In Karnataka, India, for instance, the resettlement plan for a project to be financed by the Bank has been largely prepared by MYRADA, a local NGO contracted by the state government to prepare the relocation plan.
To support early resettlement planning, the Bank enables borrowers to use funds under a project preparation facility. A special type of project—the technical assistance project—also can be used to improve the quality of preparing and planning for resettlement. For instance, in the Lesotho highland water engineering scheme, the feasibility studies are financed by a technical assistance project approved in 1987. Such assistance makes possible detailed social planning studies on resettlement long before project appraisal and allows identification of development alternatives for the resettlers.
The conventional way of treating resettlement has been as a secondary social component of an infrastructure project. A better approach to avoiding the pitfalls and effectively addressing the social, economic, and environmental aspects of resettlement is to design a full-scale resettlement project to be paired with the project for the new infrastructure. Such an approach appears warranted in the event of large-scale displacement. It also integrates the re-establishment of the resettlers with the development of the host population under the unified framework of a regional development approach.
The first full-scale Bank project of this type was approved in November 1987. The Brazil-Itaparica resettlement and irrigation project provides for the resettlement of 45,000 people being displaced by the flooding of the Itaparica reservoir at the border between Bahia and Pernambuco states. The principal project objective is to maintain and eventually improve the displaced population’s current living standards. The project, for which the Bank provided a loan of $132 million, will introduce irrigation to some 8,000 hectares of farmland, establish agricultural
production support services, assist in housing, develop rural infrastructure, water supply, education, sanitation and health services, rural electrification, and support the urban resettlement of four affected townships.
Another project illustrating this new approach to relocation was recently appraised by the Bank for the Narmada Sagar dam in Madhya Pradesh, India. The twin projects—one for the dam, one for resettlement—allow a comprehensive treatment of resettlement. The resettlement project will finance reforestation of about 80,000 hectares to replace the 41,000 hectares of forest land that will be lost in the new reservoir. This is part of a larger development package that includes land improvements, land re-allocation, irrigation, and social services.
Another way that the Bank is improving its effectiveness in dealing with resettlement is by using the expertise of sociologists and anthropologists to prepare, appraise, or supervise resettlement components. Over a period of 18 months, during 1986-87, the Bank sent staff sociologists and anthropologists and specially contracted social scientists for 45 project missions specifically to assess resettlement issues. This constitutes a substantial increase over any similar period in the past and has directed more attention in the borrowing countries to the socio-cultural aspects of population resettlement. The results are enhanced standards for such operations.
Reluctance on the part of the borrower to give adequate attention to resettlement aspects of projects may require dialogue between the Bank and the borrower at the policymaking level. Sectoral lending is also an effective means for funding adequate resettlement. Recent sector loans negotiated by the Bank with Mexico and Brazil for the hydropower sectors included resettlement-oriented provisions not present in similar loans in the past. Such provisions aim at establishing sector-wide criteria for resettlement operations and make investments in energy infrastructure conditional on investments in the socioeconomic re-establishment of those displaced.
Formidable as the resettlement tasks are, recent experience shows that new approaches can be devised that should deal more effectively with such processes than before. If development objectives are achieved, resettlement will add to, rather than subtract from, a project’s long-term benefits. Learning from experience and generalizing the new approaches could help to reverse the negative social and environmental effects and gradually improve the quality of resettlement operations.