Asian Social Science; Vol. 9, No. 4; 2013 ISSN 1911-2017 E-ISSN 1911-2025 Published by Canadian Center of Science and Education 167 Informal Cross-Border Trade Sarawak (Malaysia)-Kalimantan (Indonesia): A Catalyst for Border Community’s Development Abd Hair Awang 1 , Junaenah Sulehan 1 , Noor Rahamah Abu Bakar 1 , Mohd Yusof Abdullah 2 & Ong Puay Liu 3 1 Center for Social, Development and Environmental Studies, Universiti Kebangsaan Malaysia, Bangi, Malaysia 2 Center for Media and Communication Studies, Universiti Kebangsaan Malaysia, Bangi, Malaysia 3 Institute of Ethnic Studies, Universiti Kebangsaan Malaysia, Bangi, Malaysia Correspondence: Abd Hair Awang, Center for Social, Development and Environmental Studies, Faculty of Social Sciences and Humanities, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia: Tel: 60-3-8921-5481. E-mail: hair@ukm.my Received: January 30, 2013 Accepted: February 26, 2013 Online Published: March 28, 2013 doi:10.5539/ass.v9n4p167 URL: http://dx.doi.org/10.5539/ass.v9n4p167 Abstract Cross-border entrepreneurship activity plays an important role in the community economic development programs. The emergence of business groups and trade activities will generate employment, create wealth, contribute to tax revenue and stimulate the construction of infrastructures such as transportation. Indirectly, this will improve the standard of living in the border communities. The cross-border trade activities between Sarawak (Malaysia)-Kalimantan (Indonesia) continued to grow significantly. Although there is no formal cross-border route and Checkpoint of Immigration and Quarantine (CIQ) exists, Serikin as a small border town has developed as a Weekend Market focuses on informal trade. Indonesian traders and Malaysian consumers gathered on weekends to carry out transactions and this triggers local development. This article discusses the cross-border informal trade activities by focusing on the business participation factors and reasons for location selection, especially among Indonesian traders and spillover effects on the local communities. Keywords: community development, informal cross-border trade, entrepreneurship, spillover, mouse paths 1. Introducation The value of imports from Indonesia to Sarawak (Malaysia) was slightly reduced to MYR456.1 million in 2010 compared MYR474.0 million in 2009. However, the exports of Sarawak (Malaysia) to Indonesia reached MYR349.2 million in 2009 and continued to increase significantly (Department of Statistic, Malaysia 2010, 2011). Most of the population of Sarawak (Malaysia)-Kalimantan (Indonesia) border zone lives in villages and small towns. They are farming communities, and until 1993, the communities exchange their commodities at the border because they are being isolated from the business center (Obidzinki, Anrianto & Wijaya, 2007). Rural economic development requires a systematic planning program to create jobs and enhanced the real income of the local community (Cummings, 2002; Dahl-Østergaard, 2003; Summers, 1986). Two approaches have been used to develop rural communities. The first approach is industrial development and the second approach is self-development. Rural industrial development was implemented in Malaysia in the early 1970s through multi strategies to stimulate the economy by creating chains of upstream and downstream manufacturing, processing, and transportation activities that lead to the trading of local raw materials, products and services (Arshad & Shamsudin, 1997). The self-development approach brings along logic and scientific knowledge to farming communities to assist them on how to use their land efficiently (Abu Bakar et. al., 1977; Bradfield, 1966; Jones & Garforth, 1997). Every individual desire for a better quality of life and they appreciate a new method for solving their daily problems towards a better standard of living (Van den Ban & Hawkins, 1990). The backwardnesss of the farming communities resulted from the lack of knowledge to identify problems and alternative solution. Farmers do have knowledge but are not related to what they should have and are often influenced by the culture of the community. The community requires the dissemination and adoption of new innovation and technology (Abu Bakar et al., 1977; Seevers et al., 1997). Boone (1985) believes that the communities can be empowered by improving their knowledge and develop their minds as well as restructuring their existing knowledge. The slogans helping people help themselves and learning by doing will be included in the rural communities guiding programs (Abu Bakar et al., 1977; Mohd Nasir et al., 1984; Seevers et al., 1997). Hence, this approach emphasizes on the