ADB and the Japan Special Fund, financed by the Government of Japan, are providing a combined $2.5 million in technical assistance grants to strengthen management and institutions involved in overseeing the flow of people and goods across borders. Boosting links will also help reduce poverty along border areas and encourage increased regional integration.

Existing border links between Indonesia and Papua New Guinea, as well as between Indonesia and Timor-Leste are handicapped by a lack of resources, management capacity, and infrastructure, as well as institutional and policy constraints, which have hindered growth in trade, tourism and other services.

“Assistance for building capacity to establish systems, protocols and methods to provide border management services and to facilitate cross-border trade, investment, transport and tourism is a first step in preparing the countries to participate in economic corridor activities with their neighbors,” said Sungsup Ra, Director, Pacific Strategy and Special Operations, in ADB's Pacific Department.

The grants will be used for training and equipment to raise the capacity of border management, trade, tourism and infrastructure agencies to adopt international best practices in customs, immigration, quarantine and security, and to identify trade flows and opportunities. The project is expected to grow the value of trade in goods and services between Papua New Guinea and Indonesia, and Timor-Leste and Indonesia, by at least 10% per annum.

The project is also linked to a regional technical assistance initiative covering Brunei, Indonesia, Malaysia and Philippines, which is looking at the potential for increased cooperation and cross border trade and services in archipelagic areas of Southeast Asia.

The Japan Special Fund, is providing a $1.5 million grant, while ADB is providing $1 million from the Regional Cooperation and Integration Fund, under the Regional Cooperation and Integration Financing Partnership Facility. The facility, administered by ADB, was set up in 2007 to support activities which help foster increased regional links. Papua New Guinea and Timor-Leste will provide in-kind support equivalent to $200,000, for a total project cost of $2.7 million.

ADB is the executing agency for the project which will be implemented over 2 years, with an expected completion date of March 2012.