Do people displaced by development need more than financial compensation? Evidence from Bangladesh

Motivation Millions of people worldwide have been forcibly displaced by development projects. Bangladesh is no exception: development projects have already displaced thousands. Although those displaced are usually compensated financially, the amounts are often too small to restore their livelihoods. This has led to complementary support, such as benefit‐sharing, rebuilding and rehabilitation of livelihoods, and resettlement with development. Purpose The study assessed the sufficiency of paid compensation in the Jamuna Multipurpose Bridge (JMB) resettlement project in order to demonstrate the need for alternative supports to complement the compensation processes to reconstruct displaced people's livelihoods. Approach and methods Households affected by the JMB project were surveyed to answer a questionnaire. Professionals and officials of the implementing agencies and key informants were interviewed. The results were compared with other better cases reported in the literature. Findings The monetary compensation offered to those displaced by the JMB was not enough to resettle, restore, or reconstruct displaced people's livelihoods. As a result, most of the displaced people’s livelihoods have remained unreconstructed; many faced impoverishment. The respondents' felt that the compensation paid did not cover their loss. The absence of alternative solutions for coping with the limitations of compensation left persons affected by the project much worse off than before. Policy and implications Livelihoods of displaced people can be protected by taking measures to avoid impoverishment. In addition to ensuring that compensation is commensurate with losses, introducing benefit‐sharing — through transfers of shares of revenues, or paying a rent for land taken over — can provide additional and consistent income. Community‐supportive systems and policies in resettlement plans should be adopted. Bangladesh should legislate to legally back benefit‐sharing resettlement policies, with penalties for non‐compliance. Funding agencies such as the World Bank, the ADB, and international and national NGOs should also act to ensure that development projects do not continue to impoverish displaced people.