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p. 54 of 79 BACK | NEXT Foreword Abbreviations Glossary 1. Introduction 2. The Resettlement Plan in the Project Cycle 3. Resettlement: Key Planning Concepts 4. Consultation and Participation 5. Socioeconomic Information 6. Relocation 7. Income Restoration 7.1 Issues in Income Restoration 7.2 Income Restoration Programs 7.3 Income Restoration in the Project Cycle: Key Action Points 7.4 Checklist: Income Restoration 8. Institutional Framework 9. Monitoring and Evaluation Selected Reading List Appendix 1: The Bank's Policy on Involuntary Resettlement Appendix 2: Sample Terms of Reference for Full Resettlement Plan Appendix 3: Resettlement Policies in Selected DMCs Appendix 4: Resettlement Monitoring: Sample Formats for Monthly Progress Reports

Handbook on Resettlement: A Guide to Good Practice : 7. Income Restoration

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7.2. Income Restoration Programs

Resettlement programs aiming to prevent impoverishment, restore incomes, and build viable communities are normally of two main types. First, land-based resettlement programs provide resettlers with enough land to regain and build farms and small rural businesses. Second, nonland-based resettlement strategies include activities such as occupational training, employment, directed credit, small business and enterprise development for job creation. The resettlement program may include elements of both types.

Common problems in developing income restoration programs include:

• non-titled APs are legally ineligible for compensation;
• compensation for productive assets is not based on replacement costs;
• inadequate replacement land and poor land quality;
• lack of skills needed for income-generating programs;
• inadequate budget for income restoration programs;
• lack of institutional and technical capacity to plan and implement micro-projects for income generation; and
• neglect of vulnerable groups in income restoration programs.

Some of the problems stem from lack of appropriate policies, others relate to institutional and financial constraints. In many countries, replacement land is hard to find, and a "land-for-land" strategy has remained a difficult policy to implement.

However, in some World Bank-funded projects in PRC, India, Thailand, and Pakistan innovative approaches (e.g., Land Purchase Committee, Land Consolidation and Land Banks) have yielded some results. The Jamuna Bridge Project provides scope for resettlers or their representatives to find agricultural land themselves in order to gain the additional land purchase grant.

Nonland income-generating options should be considered after a realistic assessment of potentials through market, social, and financial feasibility analysis. These options might be particularly appropriate to APs located in urban fringe areas, who were formerly agricultural producers. Such income-generating options include:

• directed credit for small businesses and self-employment;
• skill development through training;
• assistance in finding openings in government and private enterprises; and
• preference for APs in project-related employment.

Another innovative approach for generating new employment opportunities for APs can be created by establishing a community development fund, to be controlled and administered by the APs. With some technical assistance from the resettlement agency and NGOs, APs can identify and prioritize income-generating programs to meet the needs of the market and their preferences.

Income restoration programs may require support and services for three to five years before they become viable. Project management may need to implement both short- and long-term strategies for restoring APs income. Short-term income restoration strategies are for immediate assistance during relocation and may include:

• compensation for land, structures, and all other lost assets is paid in full before relocation;
• house construction grants and relocation subsistence allowances are paid for the full duration of the period of disruption and re-establishment;
• free transport or costs of removal and re-establishment for relocation;
• subsidized inputs for agricultural, fisheries, and livestock production for the first two or three years or until income levels are restored;
• temporary or short-term employment in civil construction activities at the resettlement or project construction sites; and
• special assistance, as appropriate, to vulnerable groups such as women, indigenous people, the aged, and the disabled.

Long-term income restoration strategies involve land- and nonland-based economic activities that will provide a sustained source of income over a longer period of time and to enable restoration, or better still, improvements in APs standard of living. These strategies may consist of both project-sponsored programs (for example, purchase of replacement land, employment, training and various inputs for income generation) and establishing linkages to local or national economic development and employment programs in the project area (e.g., poverty alleviation programs in PRC, integrated rural development programs in Bangladesh, India, and Pakistan, and Small Farmers Development Programs in Nepal). There are also various kinds of rural credit and micro-enterprise programs managed by NGOs in many DMCs.

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