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Can the private or public sector provide the conditions necessary to mitigate the impoverishment associated with relocation caused by induced development in indigenous communities? This article studies the impacts generated by the construction of a hydroelectric dam on the social development, health, and culture of the Pehuenche Indians in Alto Bío Bío, Chile. Dam construction resulted in the resettlement of 77 indigenous families from their ancestral lands to two new communities. The mitigation program has provided the affected families better material conditions, with a new house, potable water, and a sewage system. Unfortunately, the process does not contemplate the immaterial aspects, creating a situation of greater vulnerability and social exclusion. Among the impacts observed are the community's lack of selfdetermination, community atomization, irregular practice of traditional ceremonies, alcoholism, and a feeling of incapacity with respect to change.