Few issues are closer to President Obama’s vision of the global future than his convictions about reducing the role of nuclear weapons in U.S. national security strategy. Less than three months after entering office, in a major speech in Prague, he put forward an ambitious nuclear agenda, declaring that the United States (as the only state ever to employ nuclear weapons in warfare) had a “moral responsibility…to seek the peace and security of a world without nuclear weapons.”

Seven years later, despite the administration’s having advanced other goals in non-proliferation policy, the larger vision of a nuclear-free world remains very much unfulfilled. But President Obama apparently hasn’t given up. In late May, he became the first American president to visit Hiroshima, where the United States first employed a nuclear weapon in warfare. In his speech, the president declared that “nations like my own that hold nuclear stockpiles…must have the courage to escape the logic of fear and pursue a world without them.” Moreover, as President Obama approaches his final six months in office, senior officials are purportedly deliberating additional policy changes that they believe could be undertaken without congressional approval. As Deputy National Security Adviser Ben Rhodes said in a June 6 speech at the Arms Control Association, the president remains intent on advancing his “Prague agenda” before leaving office.

According to recent press reports, the policy options under consideration include U.S. enunciation of a nuclear “no first use” doctrine. Such a step would represent a profound shift in U.S. policy. Non-nuclear states living in the shadow of nuclear-armed adversaries have long relied on U.S. security guarantees, specifically the declared commitment to employ nuclear weapons should our allies be subject to aggression with conventional forces. They have based their own national security strategies on that pledge, including their willingness to forego indigenous development of nuclear weapons.

Northeast Asia presents a clear contradiction between President Obama’s non-nuclear aspirations and existing circumstances.

These issues bear directly on the credibility of U.S. guarantees to allies in Europe and Asia, with particular relevance in Northeast Asia. Since the end of the Cold War, the content of the U.S. extended nuclear deterrence pledge has already narrowed. Washington has long deemed any use of nuclear weapons a matter of absolute last resort. Since the early 1990s, Washington has also enunciated an unambiguous distinction between employment of conventional and nuclear weapons, including the unilateral withdrawal of all tactical nuclear weapons deployed on the Korean peninsula. 

The Obama administration itself has also moved closer to limiting nuclear weapons use exclusively to deter another state’s first use of such a weapon against the United States, its allies, and partners—in fact, the 2010 Nuclear Posture Review declared that this was a “fundamental role” of the American nuclear arsenal. At that time, it also pledged to “work to establish conditions” under which it was safe to adopt universally a policy where the “sole purpose” of U.S. nuclear weapons was to deter a nuclear attack by an adversary. The implication of such a “sole purpose” policy would be that North Korea need not fear American nuclear retaliation if it mounted only a conventional attack against South Korea. 

Whether it is “no first use” or “sole purpose use,” Northeast Asia presents a clear contradiction between President Obama’s non-nuclear aspirations and existing circumstances. The Republic of Korea and Japan (the only state ever subject to nuclear attack) confront the reality of a nuclear-armed North Korea. Pyongyang continues to enhance its weapons inventory and the means to deliver them. It also regularly threatens Seoul and Tokyo with missile attack, potentially armed with nuclear weapons. 

[A]ny indications that the United States might be wavering from its nuclear guarantees would trigger worst-case fears that the United States, above all, would not want to stimulate.

Both U.S. allies are therefore strongly opposed to a U.S. "no first use" pledge, and would likely have deep concerns about a sole purpose commitment. Though the United States possesses a wide array of non-nuclear strike options in the event of a North Korean attack directed against South Korea or Japan, any indications that the United States might be wavering from its nuclear guarantees would trigger worst-case fears that the United States, above all, would not want to stimulate. At the same time, choosing not to issue a "no first use" pledge should not in any way suggest that the United States favors nuclear use, which would play directly into North Korean propaganda strategy. Rather, the United States should not preemptively remove the nuclear option, especially when North Korea is in overt defiance of its non-proliferation obligations and is single-mindedly intent on a building a nuclear weapons capability.

The Obama administration must therefore balance its clear desire to advance a non-nuclear legacy with Northeast Asia’s inescapable realities. Enunciating a "no first use" doctrine or a sole purpose commitment in the administration’s waning months in office is a bridge too far. Though the United States can and should engage South Korea and Japan in much deeper consultations about extended deterrence, it cannot put at risk the security of allies directly threatened by attack from a nuclear-armed adversary. 

The next U.S. president will have to square this circle. In the meantime, the Obama administration should do all that it can to plan for the road ahead, even if it means policy pledges that might not be as visionary as it would prefer. 

Young people in Northeast Asia have become famous around the world for their creativity and consumer flair: K-pop and the Korean Wave, fancy smart phones and IT entrepreneurism, high-end fashion, obsession with plastic surgery, and web-based social networks. Political activism and participation are not the first two words that pop into one’s head when we think of young East Asians. 

But in recent years, youth in Hong Kong, Japan, South Korea, and Taiwan are leading political movements and asserting their interests onto the national political agenda. Although the specific issues of political concern differ, they are motivated by a common fear of economic decline for their generation, a rejection of political marginalization, and a moral awakening that their governments and the older generations are endangering their future, including democracy. 

Since 2014, young Japanese took up the issue of national security policy and the democratic process and became new defenders of the peace Constitution. They passionately opposed the Legislation for Peace and Security (aka Collective Self-Defense law), which Prime Minister Shinzo Abe’s government put before the Diet to permit Japan’s Self-Defense Forces to engage in military action outside Japan and in the aid of allies. The leading organization, Students Emergency Action for Liberal Democracy (SEALDs), used peaceful means to stage multi-faceted challenges—via street protests, songs, livestream broadcasts, humor, as well as slogans deliberately marked in the English language—to what they viewed as fundamentally unconstitutional and a violation of the democratic process. Most of Japan’s constitutional scholars agreed with them.

All protesters, young and old, condemned the CSD measures as a way for Japan to do what Article 9 of the Constitution forbids: engage in offensive military action without amending the Constitution. Many called it the “war law.” Not only college students but those in middle school and high school participated in protests and meetings while still in their school uniforms. Teens Stand Up To Oppose War Law (T-ns SOWL) is their main organization. In late August 2015, at the height of the protests across Japan, over 120,000 people held their rally in front of the Diet building while tens of thousands more gathered in other cities. In the mass gatherings, the SEALDs slogan, “What does democracy look like? This is what democracy looks like,” reverberated. Young people were drawing attention to themselves as practitioners and protectors of Japanese democracy, as opposed to the older Abe establishment in the government and the Diet. Although their protests did not stop the passing and enactment of the bill (March 2016), Japanese youth continue to oppose the government’s penchant to increase Japan’s military capabilities and posture. Their weakness, however, lies in having no institutional structure of leadership and influence. This reflects SEALDs’ belief in horizontal political participation and organizing, in itself a political stance in a society that is hierarchical and hyper-organized.

In Korea, President Park Geun-hye’s conservative Saenuri Party was projected to be the overwhelming winner of South Korea’s legislative election on April 13, 2016 as no pundits or surveys predicted the opposition Minjoo Party to emerge as the victor. But in a stunning twist, the Minjoo Party gained a single seat advantage over the ruling Saenuri Party and secured a liberal majority with an additional 44 seats from two minor opposition parties. This surprise outcome was not credited to the success of the opposition, but instead largely attributed to the increased turnout of voters in their twenties and thirties who are frustrated by socioeconomic conditions and the political status quo. Leading up to the election, university student bodies and various youth groups mobilized young voters to go the polls, which resulted in a 13 percent increase among 20-year-olds since the last election. Once labeled as a politically detached generation, South Korea’s youth sent a loud and powerful message that they have had enough.

On May 20, 2016, Taiwan inaugurated Tsai Ing-wen, its first woman president, and completed its third democratic transfer of power. In February, following the January 2016 elections, Taiwan’s opposition Democratic Progressive Party (DPP) became the majority party in the Legislative Yuan for the first time. While the Kuomintang, the conservative ruling party, was predicted to lose the executive, the losses in the Legislative Yuan validated the growing progressive movement that had been initiated by students in March 2014.

Meanwhile, in Hong Kong, student activist groups have mobilized beyond mass demonstrations, such as the Umbrella Movement of fall 2014. Angered by the setback to political reform and expanded citizen participation in choosing their leaders, the young students have organized into formal political parties, looking ahead to the September 2016 Legislative Council (LegCo) elections. Similar to the student groups in South Korea, the younger generation in Taiwan and Hong Kong has concluded that their voices are not only important, but necessary in determining their political and economic futures.

Why now? Why have younger activist movements emerged or gained ground recently?

Like their counterparts in South Korea, Taiwan, and Hong Kong, Japanese youth were affected by a series of political, legal, and economic events that decreased their trust in their respective governments and increased their sense of vulnerability and insecurity. The most prominent catalyst was the Fukushima nuclear plant disaster of March 2011. It generated a rash of citizen activism, including investigation and documentation teams, increased opposition to nuclear power plants, and lawsuits against the Japanese government and the Tokyo Electric Power Company. Because so many of the victims were children and youth, the political action was particularly poignant. Parents of the nearly 400,000 children residing in the Fukushima area at the time of the power plant melt-downs began organizing in April 2011.

One group sued the Koriyama City government, demanding that it provide financially and logistically for the affected children to reside and attend school in safe areas. Two years later, their lawsuit failed as the Sendai High Court ruled against the plaintiffs, stating that radiation levels are safe enough, even for children, and that families should pursue evacuation if they wish, at their own cost. The 400,000 or so children (up to 18 years of age at the time of the accident) will be required to get tested for radiation-related health effects for the rest of their lives because children are known to be more vulnerable to radiation than adults. As of April 2016, citizens were disappointed again as their injunction against the reopening of two reactors at a nuclear power plant in Kagoshima Prefecture was overturned by the Fukuoka High Court. Young and old alike have joined together to oppose nuclear energy in Japan.

Young people also resent the expansion of non-regular employment and the Worker Dispatch Law, which decreased the labor rights and protections of dispatched or temporary workers since its inception in 1985. The global economic crisis of 2007-09 highlighted young people’s economic vulnerability as jobs became harder to obtain and those in temporary arrangements, with no seniority in age and experience, were easily laid off. The 2012 revision of the Dispatch Law prohibited the employment of a temp for more than three years in certain job categories was another blow to young people, who worry that they will face “lifelong dispatch.” SEALDs also warns against the economic hardship on many Japanese, including young adults, when the proposed consumption tax of 10 percent kicks in come April 2017: “If the consumption tax is increased without rebuilding the system of redistribution centered on social security, the wealth gap will continue to widen.”

For South Korea, signs of frustration began to brew in 2013 when a hand-written poster at the elite Korea University circulated around the internet. Written in the form of a letter, the poster conveyed frustration against perceived social injustices (e.g. 4,213 workers were dismissed for protesting the privatization of the state-owned Korea Railroad Co.), which reverberated beyond the student population. Most striking was the poignant criticism of the lack of youth representation in government and young people’s sense of repeated neglect by the older political establishment. The letter was a sobering reminder that today’s youth feel they have little say in shaping their own futures.

This political wake-up call was amplified following the government’s inadequate handling of the Sewol ferry tragedy in spring 2014 and the Middle East Respiratory Syndrome outbreak (MERS) in spring 2015. When reports revealed that state collusion with the shipping industry led to lax maritime regulations and that the government had failed to distribute time-sensitive information about MERS, an enraged public demanded accountability for the tragic loss of innocent lives. The sinking of Sewol killed 304 passengers out of 476 on board, most of whom were high school students. This wave of public distrust and resentment triggered a larger outcry against the lack of transparency and corruption in both government and businesses.

Mounting frustrations from the younger generation culminated in the creation of “Hell Joseon,” a satirical phrase and an online community named after the country’s “hellish” economic conditions and the class-based society of Joseon, Korea’s former kingdom before Japanese colonization. The phrase is used to describe a grim society where social mobility is impossible, only the privileged are immune from the plight of unemployment, and immigration is the only way out. The popularity and wide circulation of this term led to a public debate about the hardships of Korean society, prompting even politicians to use the term during the 2015 National Assembly inspection of government offices. Naturally, both the term and its implications made its way into the campaign trails, as evidenced in the prioritization of domestic issues in candidates’ platforms for the 2016 general election.

In Taiwan, the younger generation burst onto the political scene in March 2014, when a group of activists stormed and occupied the Legislative Yuan for twenty-three days. The occupation, known as the “Sunflower Movement,” was the culmination of the growing frustration with Taiwan’s economic climate coupled with the younger generation’s political upbringing in a democracy. The student occupiers focused on the Cross-Strait Service Trade Agreement (CSSTA), which, to them, embodied both economic and security perils created by the then-president Ma Ying-jeou’s practice of political thaw and tighter economic ties with mainland China. The protesters viewed the benefits of the CSSTA as biased favoring big corporations but hurting small-to-medium enterprises. Additionally, these young occupiers felt that under the KMT, Taiwan’s worsening economy was becoming more dependent on the Mainland. They feared that Beijing was taking advantage of these agreements as a means to leverage its power over the island, which would make China’s ultimate goal of reunification all the easier.

Hong Kong’s political reform process, which was initiated prior to Britain’s handover of the territory back to China in 1997, has garnered more attention in recent years due to upcoming milestones. Since the reversion, China has taken gradual steps to ensure Hong Kong’s political system adheres to the Basic Law, which is the mini-constitution that protects “one country, two systems”, the guiding principle for China’s sovereignty over the territory, at least until 2047. As outlined by a 2007 PRC National People’s Congress Standing Committee (NPC-SC) decision, Hong Kong residents would be able to choose the chief executive by means of “universal suffrage” for the 2017 election.

However, China’s interpretation of “universal suffrage” differed from the definition pursued by the pan-democratic political camp in Hong Kong. When an August 2014 NPC-SC decision outlined that the Hong Kong public could only choose between two to three candidates, who would be selected through a screening committee biased towards Beijing, high school and university students felt particularly deceived. Several veteran pan-democratic activists had already formed the “Occupy Central” movement, which adhered to non-violent, consultative, civil disobedience norms. Without a representative government, demonstrations have become the go-to way for Hong Kong people to voice their opinions. So, following this tradition, young activists decided to move beyond the “Occupy Central” methods when they boycotted class in September 2014, and thus, launched the three-month mass demonstration known as “the Umbrella Movement.”

What is driving these movements? Economic factors or political values?

In all four cases, economic factors including youth unemployment, job insecurity, low wages, and social inequality are critical motivators driving the younger generation’s political actions. The youth unemployment rate in South Korea hit a record high of 12.5 percent in February, which is three times the overall unemployment rate, and about one-third of those who are employed hold temporary jobs. In Taiwan, between 2014 and 2015, youth unemployment averaged 12.9 percent, reaching a high of 14 percent in August 2014. Even for those with jobs in South Korea, real wages have not increased commensurate with the country’s economic growth. Over the past five years, the annual average increase in real wages was only 1.34 percent, barely half the average economic growth rate of 2.96 percent. The unemployment rates among Japanese youth are lower (8 percent in 2011 declining to 6.5 percent in 2014), but a large number of young Japanese with jobs consider themselves as temporary, contract or part-time workers. What’s startling is that the Japanese government “Survey of Employment of Young People” (ages 15-34) in 2014 found that a whopping 40.3 percent of the respondents stated that their “main source of income” comes from parents. In addition, a recent survey by the Japanese branch of the U.K.-based Big Issue Foundation, which assists the homeless, found “77 percent of the nation’s low-income unmarried youths live with their parents mainly for financial reasons.”^[1] Even if these young folks have not launched their version of “Hell Nippon,” they certainly would sympathize with their Korean counterparts’ fears of economic uncertainty and worries about social marginalization through extended infantilization.

Inequality also is manifested in access to affordable housing, with both Taiwan and Hong Kong experiencing exorbitant real estate markets. In Taipei, the ratio of median housing price to median annual household income hit 15.7 in 2014, thus coining the phrase that you’d have to neither eat nor drink for 15 years to afford housing. In Hong Kong, 180-square-foot “mosquito apartments” can cost $US 517,000. Housing prices have steadily increased in South Korea as well, where the average price of an apartment is roughly $10,000 per 35 square feet. 

But compounding these economic disappointments is young citizens’ disillusionment with their respective governments. Since 2013, when President Park Geun-hye took office, Freedom House has downgraded South Korea’s score from the highest at #1 for political rights to #2 in 2014 and 2015. Its overall freedom score slipped from 1.5 to 2.0. Specifically, the report emphasized the “increased intimidation of political opponents of President Park Geun-hye and crackdowns on public criticism of her performance following the Sewol ferry accident.” Additionally, President Park’s administration has been plagued with controversies from the start, with charges of election meddling in her favor by the National Intelligence Service, a divisive debate over state-sanctioned history textbooks, which her administration has spearheaded Additionally, her administration’s arbitrary use of the controversial National Security Law to restrict freedom of speech and freedom of association reminded many Koreans of the pre-democratic Korea under the control of her father, the late President Park Chung-hee.

Like their peers in South Korea, the younger generation in Taiwan has only known a democratic Taiwan, so unlike their parents’ generation who lived under an authoritarian regime, they now seek a higher standard of governance and fairness and accountability from political institutions. But, the democracy they know is a young democracy, one trying to overcome, but still prone to, corruption, unfair practices and deep partisan divides. So, when they see problems in their democratic institutions, such as opacity in passing the CSSTA bill, they regard themselves as protectors of Taiwan’s democracy, justified in opposing the government and articulating their criticism.

The young Japanese of SEALDs profess a similar purpose: “We believe it is absolutely essential for [sic] opposing the current government to establish a unity of opposition parties and its supporters who share liberal values such as constitutionalism, social security and peace diplomacy. This unity will create a new political culture which encourages citizen’s political participation and revitalizes representational democracy.”^[2]

Economic frustrations in Hong Kong have coalesced into a political pursuit toward a more representative and democratic political system. In particular, for the millennial generation, the year 2047 – when the one country, two systems agreement expires – is not a distant date in the future as it was for the creators of the Basic Law in the 1990s. Therefore, the young activists believe they should help set the parameters and pace of the political reforms they deem necessary to achieve a society they envision and that they, not their elders, will have to lead.

Implications for the future? Forerunner of divisive generational politics?

With the September 2016 legislative council (LegCo) and 2017 chief executive elections approaching, Hong Kong’s student groups have begun to organize beyond demonstrations into political parties. Joshua Wong, one of the student leaders during the Umbrella Movement, launched the Demosisto party, which plans to run several candidates in the LegCo elections, and calls for a referendum on one-country, two-systems and on self-determination after 2047. Other new parties led by young activists have taken even more extreme stances, such as the Hong Kong National Party, which calls for Hong Kong independence. The upcoming challenge for the new political parties, however, is that the pan-democratic camp is fractured, while the pro-Beijing establishment camp has remained more-or-less unified. As witnessed in the failed political reform bill in June 2015, which, as Richard Bush argues, could have provided a narrow path for a pan-democratic candidate, Beijing can ride out a political deadlock in Hong Kong. But, the younger generation in Hong Kong feels that they have little time to waste in implementing political reforms. The greatest challenge ahead of Hong Kong will be finding a way for the moderate and radical sides of the pan-democratic camp to compromise and unify.

The “Sunflower Movement” helped ignite the pan-green coalition in Taiwan, leading to demoralizing defeats for the Kuomintang (KMT) Party in both the local elections of November 2014 and presidential and legislative elections of January 2016. In addition to the DPP gaining a majority in the Legislative Yuan, the New Power Party, which emerged directly from the Sunflower Movement, won five legislative seats, making it the third largest party in Taiwan. During her inauguration speech on May 20, 2016, President Tsai Ing-wen focused on a wide range of domestic issues, and even spoke directly to young people, vowing to help change their current predicament through a new model of economic development “based on the core values of innovation, employment and equitable distribution.”

In reference to cross-Strait relations, Tsai did not say what Beijing wanted her to say, which means Taiwan can expect some economic and strategic blowback from the Mainland. In particular, if Beijing punishes Taiwan via economic tools, then that could derail Tsai’s plans to help pull young people out of their economic rut. So, while it’s tempting to say the Taiwanese youth movement succeeded in getting on the national agenda through the recent election, the Tsai administration has many hurdles to jump in order to fully achieve the movement’s objectives.

While Tsai has time to consider and clear the political hurdles, President Park is poised for a rough run in the final stage of her term as she faces a formidable progressive bloc in the new legislature. Political commentators are already discussing the prospects of a progressive-led Blue House in 2017 and what this would mean for ROK foreign policy, especially toward North Korea. But beyond the immediate policy implications, the generational divide that emerged so starkly in the recent election may portend significant changes for South Korean politics. What was noteworthy in this election was the role of the People’s Party, a new minor opposition that offered an alternative choice for young voters disillusioned by the traditional two parties. Led by an unassuming yet popular figure vowing to tackle the old establishment, the People’s Party managed to win a higher percentage (26.7 percent) of the popular vote than the Minjoo Party (25.5 percent) and contributed to a progressive majority despite concerns over vote-splitting. In fact, this third party only split regional loyalties, receiving a significant amount of the proportional votes from regions traditionally tied to the two major parties.

Northeast Asia is a region with the fastest-ageing population and the lowest birth rates in the world. It is possible that young people will increasingly find themselves at the bottom of an upside-down pyramid, holding up or held down by the size and weight of the older generations. The latter will form the majority of voters with the capacity to choose leaders and policies that support or undermine the interests of the younger generations. Youth today need to prepare for and practice greater political participation now if they are to lead their respective societies into the depths of the 21st century. Most likely, generational politics will become a sharper and more potent force in northeast Asia. 

Editor’s Note: This blog post is part of a series on the 2015 Financial and Digital Inclusion Project (FDIP) Report and Scorecard, which were launched at a Brookings public event on August 26. Previous posts have highlighted five key findings from the 2015 FDIP Report and explored groundbreaking financial inclusion developments in India. Today’s post will compare financial inclusion outcomes and opportunities for growth across several Asian countries included in the 2015 Report and Scorecard.

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Of the 21 countries ranked in the 2015 Financial and Digital Inclusion Project (FDIP) Report and Scorecard, no countries in Asia placed in the top 5 in the overall ranking. However, all of the FDIP Asian countries have demonstrated progress within at least one of the four dimensions of the 2015 Scorecard: country commitment, mobile capacity, regulatory environment, and adoption of traditional and digital financial services.

This blog post will dive into a few of the obstacles and opportunities facing FDIP countries in central Asia, the Middle East, and southeast Asia as they move toward greater access to and usage of financial services among marginalized groups. We explore these countries in order of their overall score: Turkey (74 percent), Indonesia (70 percent), the Philippines (68 percent), Bangladesh (67 percent), Pakistan (65 percent), and Afghanistan (58 percent). You can also read our separate post on financial inclusion in India, available here.

Turkey: Clear economic advantages, but opportunities for enabling regulation and greater equity remain

Turkey is one of the few upper-middle income countries in the FDIP sample, ranking in the top 5 in terms of gross domestic product (GDP) measured in US dollars. Turkey’s fairly robust banking infrastructure contributed to its relatively strong adoption rates: As of 2013, the International Monetary Fund’s Financial Access Survey found that Turkey had about 20 bank branches per 100,000 adults (the 4^th highest density rate among the 21 FDIP countries) and about 73 ATMs per 100,000 adults (the 2^nd highest density rate among the FDIP countries).

According to the World Bank’s Global Financial Inclusion (Global Findex) database, about 57 percent of adults in Turkey had an account with a mobile money provider or formal financial institution as of 2014. Turkey’s performance on the adoption dimension of the 2015 Scorecard contributed to its tie with Colombia and Chile for 6^th place on the overall scorecard.

With that said, Turkey received lower mobile capacity and regulatory environment scores, ranking 16^th and 17^th respectively. Although Turkey’s smartphone and mobile penetration levels are quite robust, a limited mobile money provider landscape, combined with a lack of regulatory clarity surrounding branchless banking regulations (particularly agent banking), constrained Turkey’s scores in those categories.

Nonetheless, there is promising news for Turkey’s financial inclusion environment. In 2015, Turkey assumed the G20 presidency and has renewed its focus on financial inclusion in association with this transition. Turkey’s 2014 financial inclusion strategy is one example of the country’s commitment to advancing inclusion.

To date, financial inclusion growth in Turkey has been limited, as evidenced by the results of the 2011 and 2014 Global Findex. However, if the country’s stated commitment translates into concrete initiatives moving forward, we can expect to see accelerated financial inclusion growth. This will be critical for facilitating access to and usage of quality financial services among the nearly 60 percent of women in Turkey without formal financial accounts. Reducing the approximately 25 percentage point gap in account ownership between men and women — one of the highest gender gaps among the 21 FDIP countries — should be a key priority for the country moving forward.

Indonesia: High mobile money potential, but enhanced awareness needed to drive adoption

Recent changes to Indonesia’s regulatory environment have facilitated a more enabling digital financial services ecosystem, although there is still room for improvement in terms of reducing supply-side barriers. Increasing mobile money awareness could help leverage Indonesia’s strong mobile capacity rates to increase access to and usage of formal financial services. However, moving from a heavily cash-based environment to greater use of digital financial services will take time: A 2014 InterMedia survey in Indonesia found that although 93 percent of bank account holders could access their accounts digitally, 73 percent preferred to access their accounts via an agent at a bank branch.

The differing mandates of Indonesia’s new financial services authority, Otoritas Jasa Keuangan (OJK), which focuses on branchless banking (specifically agent banking) and Bank Indonesia, which focuses on electronic money regulation, may have created some confusion regarding the regulatory environment. Solidifying the country’s financial inclusion strategy and clarifying the roles of the various financial inclusion stakeholders could provide opportunities for greater coherence in terms of financial inclusion objectives.

OJK’s recent branchless banking regulations have led to several positive changes within the regulatory environment. For example, these regulations enabled financial service providers to appoint individuals and business entities as agents and to provide simplified customer due diligence requirements. The 2015 FDIP Report highlights in greater detail some possible improvements to the branchless banking and e-money regulations.

On the mobile capacity side, Indonesia tied for the second-highest score on the 2015 Scorecard. Indonesia is one of the few countries where mobile money platform interoperability has been implemented, allowing different mobile money services to “talk” to one another in real time. Indonesia also boasted the third-highest 3G network coverage by population among all the FDIP Asian countries, as well as the third-highest unique subscribership rate among these countries. However, only about 3 percent of adults were aware of mobile money as of fall 2014, according to the InterMedia survey.

In terms of adoption, the 2014 Global Findex found that women in Indonesia actually had slightly higher rates of account ownership than adults in general, although there is still significant room for growth across all adoption indicators. Given Indonesia’s strong mobile capacity ranking, increasing awareness of mobile money services could drive growth in the digital finance sector. Clarifying existing regulatory frameworks and removing some remaining restrictions regarding agent exclusivity and other agent criteria could further boost financial inclusion.

Philippines: Strong commitment, but geographic barriers have inhibited scale

The Philippines tied with Bangladesh to garner 15^th place for adoption, which contributed to the country’s overall ranking (also 15^th place). In both Bangladesh and the Philippines, about 31 percent of adults had an account with a mobile money provider or formal financial institution as of 2014. According to the 2014 Global Findex, the percentage of women with formal financial accounts was about 7 percentage points higher than the overall percentage of adults with accounts — a rarity among the 21 FDIP countries, which generally exhibit a “gender gap” in which women are less likely to have formal financial accounts than men.

The Philippines’ efforts to foster financial inclusion earned it the second-highest country commitment and regulatory environment rankings among the FDIP Asian countries. The Bangko Sentral ng Pilipinas (BSP), the Philippines’ central bank, has issued a number of circulars providing guidance regarding electronic money and allowing non-bank institutions to become e-money issuers. The BSP also has the distinction of being the first central bank in the world to create an office dedicated to financial inclusion. Most recently, the BSP launched a national financial inclusion strategy in July 2015.

On the mobile side, according to the GSMA Intelligence database, as of the end of the first quarter of 2015 the Philippines had the highest unique mobile subscribership rate among the FDIP Asian countries, as well as the second-highest rate of 3G network coverage by population among these countries.

In terms of mobile money, the Philippines is home to two of the earliest mobile financial services products, Smart’s Smart Money and Globe’s GCash. It also boasts the second-highest rate of mobile money accounts among adults in all the FDIP Asian countries, according to the 2014 Global Findex.

There is still significant room for improvement in adoption of traditional and digital financial services in the Philippines. The country’s geography has posed a challenge with respect to advancing access to financial services among the dispersed population. While the extent of banking infrastructure has improved over time, as of 2013 610 out of 1,634 cities and municipalities did not have a banking office, and financial access points remained concentrated in larger cities. Expanding agent locations and facilitating interoperability could enhance mobile money adoption, mitigating the consequences of these geographic barriers.  

Bangladesh: Rapid growth, but high unregistered use and low adoption overall

While Bangladesh performed strongly on the country commitment and mobile capacity dimensions of the 2015 FDIP Scorecard, it received one of the lowest adoption rankings among the FDIP Asian countries. According to the Global Findex, about 31 percent of adults age 15 and older had an account with a formal financial institution or mobile money provider as of 2014. Indicators pertaining to the country’s rates of formal saving, credit card use, and debit card use all received the lowest score.

Bangladesh has a robust mobile landscape, with fairly strong unique mobile subscription rates — as of the first quarter of 2015, it was tied with Indonesia for the third-highest unique mobile subscribership rates among the FDIP Asian countries, after the Philippines and Turkey. This mobile coverage is combined with a multiplicity of mobile money providers (although a 2014 InterMedia survey noted that nearly 90 percent of active mobile money customers used the bKash mobile money service).

Awareness of mobile money as a service in Bangladesh is very high, although understanding of the concept is less prevalent — in 2014, about 91 percent of respondents in an InterMedia survey were aware of at least one mobile money provider, although only about 36 percent were aware of mobile money as a general concept.

Unregistered use of mobile money accounts is high. While about 37 percent of adults had a mobile money account or bank account or both as of 2014, according to the InterMedia survey, only about 5 percent had registered mobile money accounts, while 4 percent had active, registered mobile money accounts (meaning an account that is registered and has been used in the previous 90 days).Transitioning to registered accounts will help enable individuals to connect with more extensive financial services, such as receipt of government payments.

Overall, adoption of mobile money and the expansion of agent locations have been increasingly rapid in Bangladesh — as of 2014 Bangladesh was one of the fastest growing markets in terms of total accounts globally. Over 60 percent of respondents in a 2013 InterMedia survey stated that they “fully” or “rather” trusted mobile money. Moving forward, increasing financial capability might help individuals feel more at ease registering their accounts and using them independently of an agent.

Pakistan: Public and private sector initiatives advance inclusion

Pakistan ranked 7^th in terms of the percentage of adults with mobile money accounts among the 21 countries, achieving the highest percentage of all of the Asian FDIP countries. Yet there is significant room for growth — as of 2014, only about 6 percent of adults had a mobile money account.

The State Bank of Pakistan (SBP) has clearly expressed its commitment to advancing financial inclusion, which earned the country a commitment score of 100 percent. The SBP developed Branchless Banking regulations in 2008, with revisions in 2011. These regulations were explicitly intended to promote financial inclusion. More recently, the country’s National Financial Inclusion Strategy was launched in May 2015. In terms of quantitative assessments of financial inclusion, the SBP tracks supply-side information on branchless banking in its quarterly newsletters.

Recent public and private sector initiatives may help advance mobile money adoption. For example, a re-verification initiative for SIM cards was mandated by the government and initiated earlier in 2015. Mobile network operators have been promoting registration of mobile money accounts since the biometric re-verification process is more intensive than the identification requirements needed to register a mobile money account.

Earlier, in September 2014, the EasyPaisa mobile money service decided to eliminate fees related to money transfers between Easypaisa account customers and cash-out transactions for a set period. As of April 2015, the number of person-to-person money transfers had increased by about 2500 percent.

Still, barriers to financial inclusion remain. A 2014 InterMedia survey noted that while distance was less of a barrier to registration than previously, distance did affect the frequency with which users engaged with mobile money services. Therefore, expanding access points could further facilitate use of mobile money. Increasing the number of registered accounts could also provide individuals with more opportunities to engage with financial services beyond basic transfers — the InterMedia survey found that as of 2014, about 8 percent of adults were over-the-counter mobile money users, while 0.3 percent were registered users.

Afghanistan: Commitment to improving infrastructure and adoption

Instability and systemic corruption in Afghanistan over the past several decades have damaged trust in formal financial services and limited the development of traditional banking infrastructure. In addition to having one of the lowest levels of GDP among the 21 FDIP countries, as of 2013 the Financial Access Survey found Afghanistan had the lowest reported density of commercial banks per 100,000 adults. Even among individuals who can access banks, adoption of formal accounts is constrained by a lack of trust in formal financial services.

On the mobile side, Afghanistan has fairly widespread 3G network coverage (over 80 percent of the population, according to the GSMA Intelligence database), which helped boost its mobile capacity ranking to 2^nd place. However, Afghanistan received the lowest score possible for each of the 15 adoption indicators. According to the 2014 Global Findex, financial account ownership as of 2014 was at about 10 percent of adults, and financial account ownership among women was at only 4 percent. Tracking gender-disaggregated data at the national level could help the government better identify underserved populations and target financial solutions toward their needs.

The government has made an effort to promote financial inclusion and digital financial services. For example, Da Afghanistan Bank committed to the Alliance for Financial Inclusion in 2009, and the Republic of Afghanistan is a member of the Better Than Cash Alliance. In 2008, the Money Service Providers Regulation was issued, with amendments instituted a few years later pertaining to e-money. The Afghanistan Payments Systems, which is still being fully operationalized, aims to allow payment service providers such as mobile network operators to connect their mobile money systems.

While several mobile money options are available, adoption of these services is low. According to the 2014 Global Findex, about 0.3 percent of adults had a mobile money account. Implementing interoperability across platforms might help increase the utility of mobile money services for consumers, and as in Turkey, developing specific agent banking regulations could provide clarity to the sector and drive innovation.

By expanding financial access points, educating consumers about traditional and digital financial services, and monitoring providers to ensure consumer protection, Afghanistan’s regulatory entities and financial service providers may be able to better reach underserved populations and inculcate trust in formal financial services.

2014 was a relatively friendless year for the Democratic Republic of Korea (DPRK or North Korea). It publicly lost its best friend and patron, China, to its erstwhile nemesis, the Republic of Korea (ROK or South Korea), when Presidents Park Geun-hye and Xi Jinping celebrated their growing friendship at the July summit in Seoul. Recently, retired PLA General Wang Hongguang wrote in the Chinese language site of Global Times, which is closely linked to the Chinese Communist Party, that China tired of cleaning up North Korea’s “mess” and would not step in to “save” North Korea if it collapses or starts a war.[1] And there is a vigorous debate in Beijing on whether the DPRK should be treated on a “normal” basis with China’s interests as the sole guide and purpose or be treated as a special case needing China’s indulgence and protection.[2] Since the Sony hack of November, North Korea has been under tighter scrutiny, both real and virtual, by Seoul, Beijing and Washington, accompanied by tighter sanctions in the new year. Bludgeoned by global condemnation of its atrocious human rights record, Pyongyang’s pariah status has intensified. Only Russia has been warming up to North Korea out of its own economic and political self-interest.

Is there any sizable country with good intentions for the region that is not giving up or beating up on North Korea? Is there any country Pyongyang likes and possibly even trusts? Mongolia stands out as the sole candidate, and it is friendly with both the East and the West.

Since the 2000s, Mongolia has played an increasingly constructive and steady role in in its bilateral ties with the DPRK and in its promotion of peace and cooperation in Northeast Asia. President Tsakhiagiin Elbegdorj, who visited Pyongyang in 2013, was the first head of state to reach out to the DPRK since Kim Jung Un assumed power and helped author the “Ulaanbaatar Dialogue on Northeast Asia Security,” which held its first meeting in June, 2014. It is a unique forum that combines official (track one) and unofficial academic/think tank/NGO (track two) participants, on a variety of important regional issues. The goals are to decrease distrust among nations and increase cooperation and peace. Both the DPRK and the ROK (Republic of Korea or South Korea) were represented at the inaugural meeting, as were the United States, China, Russia, Japan, and some European nations.

The UB Dialogue, as a consultative mechanism, has the potential to bring together policymakers, international organizations such as the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), and civil society entities and facilitate a range of initiatives related to economic cooperation; military transparency; environmental issues; non-traditional security threats; regional stability, cultural and educational exchange among the participants, including the two Koreas. These are official agenda items and goals of the UB Dialogue. With the Six-Party Talks nearly defunct and inter-Korean relations unable to address regional issues that affect the peninsula, Mongolia may be able to serve as a “Geneva or Helsinki of the East” as some observers have suggested.

Mongolia’s expanding global presence

Mongolia is uniquely positioned as the only country in Northeast Asia that enjoys good relations not only with North Korea but also South Korea, the United States, China, Russia, and Japan.

Mongolia’ relations with the United States, Canada, and Western Europe have steadily improved and deepened since the late 1980s. In recent decades, both Democratic and Republication administrations in Washington have enjoyed mutually warm and collaborative relations with Mongolia. President George W. Bush was the first sitting U.S. president to visit the country in 2005; he thanked the Mongolians for sending troops to join U.S.-led forces in Iraq and Afghanistan and for supporting anti-terrorism initiatives. Former Secretary of Defense Donald Rumsfeld also visited in the same year. In 2007, President Nambaryn Enkhbayar visited Washington to co-sign the Millennium Challenge Corporation Compact with President Bush. The next (and current) leader, President Elbegdorj, met U.S. President Barack Obama at the White House in 2011, as did the first civilian Minister of Defense, L. Bold. Vice President Joe Biden included Mongolia on a three-country Asia visit in August, 2011; China and Japan were the other two. A year later, Secretary of State Hilary Clinton took her turn in Ulaanbaatar. The most recent visit by top-level U.S. officials to Mongolia was by Secretary of Defense Chuck Hagel in April 2014.

Mongolia’s pursuit of the “third neighbor” policy allows the country to develop cooperative relations with the United States, Western Europe, ASEAN nations and others partly as “an air pocket” from its economic and security reliance on Beijing and Moscow. The softer side of this diplomatic push has been demonstrated by Ulaanbaatar’s membership in the Organization for Security and Cooperation in Europe and its previous chairmanship of the Community on Democracies.”[3]

Western experts on Mongolia applaud the way the country has developed a unique “peacekeeping niche” that facilitates participation in UN peacekeeping activities, international anti-terrorism measures, and humanitarian actions. For its small population of about three million, Mongolia takes on a heavy load of peacekeeping activities, ranking 26^th on the UN’s list of contributing nations.[4]

Since 2003, Mongolia annually hosts the “Khaan Quest” peacekeeping exercises for the purpose of tactical advancement and capacity building for its Mongolian Armed Forces (MAF) and for the improvement of regional confidence building. Although the United States and NATO play prominent roles, the Quest has attracted more diverse participants over the years so that by 2012, the number of interested parties expanded to include representatives from China and India as well as an array of developing nations such as Vietnam and Cambodia. These exercises are acknowledged as gatherings devoted to strengthening international cooperation and interoperability on peacekeeping initiatives around the world.[5]

On the economic side, Mongolia has been diversifying its external relations, with the maintenance of sovereignty and the related desire to reduce its overwhelming dependence on China as important goals. Expansion of economic relations is driven in part by a desire to participate in and benefit from global standards investment funds, and market access is a national priority. In that context, Mongolia’s relations with the West have been constructive and collaborative. For example, in 2013, the United States Trade Representative Michael Froman and Mongolia's Minister for Foreign Affairs, Luvsanvandan Bold, signed the Agreement on Transparency in Matters Related to International Trade and Investment between the United States of America and Mongolia. The Agreement commits the parties to provide opportunities for public comment on proposed laws and regulations and to publish final laws and regulations in Mongolian and English in order to facilitate access, openness, fairness, and procedural coherence in international trade and investment between Mongolia and other countries. “Additional commitments address the application of disciplines on bribery and corruption.” This type of administrative and legal modernization and the incorporation of measures to prevent and correct corruption are exemplary measures that could be helpful to the DPRK and other countries that are unfamiliar with or lagging in appropriate frameworks for doing business with diverse international actors.

Maintaining sovereignty between giants

China and Russia have vied for influence over Mongolia for many decades, from the time when Mongolia was in the Soviet sphere in influence to the present. Although 89 percent of foreign trade in 2013 was with China and Russia provides about 75 percent of Mongolia’s gasoline and diesel fuel and much of its electricity, Ulaanbaatar is assertively broadening and deepening its economic interests with the two big neighbors, especially greater transportation access and cheaper costs (vital to the landlocked nation), participation in the development of the New Silk Road corridor, and the construction of a Russian oil and gas pipeline through Mongolia that reaches China. All three countries have mutual interests and investments in developing Mongolia’s well-endowed mining industry.

But being sandwiched between two giants means Mongolia has to be prudent in preserving its sovereignty and independence, and Ulaanbaatar has done so in practical ways, balancing the two large powers’ interests with its own. The 2010 National Security Concept’s “One-Third Clause” sets a clear limit on the proportion of foreign direct investment from any one country: one-third. Legislation limits (foreign) state-owned companies from gaining control of strategic assets. And as numerous bilateral security and military cooperation agreements link Mongolia with China and Russia, UB has strategically and legally created elbow room for its autonomy. The government’s National Security and Foreign Policy Concepts outline a specific policy of not allowing foreign troops the use of its territory. Such preservationist measures to maintain sovereignty and independence in economic and security terms would be welcome examples to a North Korea which zealously prioritizes national sovereignty.

Mongolia and the Korean peninsula

Mongolia’s potential role as a non-nuclear peace broker in the region was further evidenced by its successful hosting of DPRK-Japan negotiations since 2012, which have yielded bilateral progress on longstanding abduction issues. In March 2014, Ulaanbaatar hosted the first-ever reunion between the parents of one of the abductees, Megumi Yokota (whom North Korea claims is dead), and her daughter, son-in-law, and their child who live in North Korea. Mongolia also served as a neutral venue for high-level talks on normalizing Japan-DPRK relations back in September 2007 as part of the Six-Party Talks framework. Asia Times reported that “arranging this recent meeting reflected Ulaanbaatar's ‘contribution to satisfy regional stability in Northeast Asia’ and how it could play a role in deepening understanding and normalizing DPRK-Japan relations.” President Elbegdorj's administration took particular care in staging the negotiations, including the use of the official state compound in Ikh Tenger as the meeting place. According to Alicia Campi, an American expert on Mongolia and the author of the AT article, Ikh Tenger was requested by the North Koreans.[6]

Mongolian President Elbegdorj is often described as an activist head of state, both for his focused efforts on developing Mongolia internally and advancing the country’s role and contributions internationally. One of his main foreign policy priorities is to promote regional economic integration and cooperation and peace and security. Dialogue and trust-building, two key components of his approach, coincide with ROK President Park Geun-hye’s emphasis on trustpolitik and the proposed Northeast Asia Peace and Cooperation Initiative (NAPCI). Both NAPCI and the UB Dialogue seek to chip away at distrust among Northeast Asian countries and increase collaboration and cooperation through multi-layered activities, including mutually reinforcing Track 1, 1.5 and 2 gatherings. Both emphasize multilateral cooperation on non-traditional security issues and people-to-people exchanges as ways to help build trust and resolve regional problems step by step. NAPCI held a track 1.5 forum in October 2014 in Seoul. In sharp contrast to its reaction to the first UB Dialogue of June that year, the DPRK flatly rejected the invitation to participate in the Seoul dialogue and criticized NAPCI as a cover for pressuring Pyongyang to relinquish its nuclear program and for reunification by absorption.[7]

There is no reason why the Ulaanbaatar Dialogue and NAPCI cannot be complementary and mutually reinforcing. Given that trust in inter-Korean relations is non-existent while Mongolia has gained deeper trust with both Koreas over the past two decades, NAPCI activities could benefit from Mongolia’s unique position in its relations with the DPRK. Ulaanbaatar potentially can serve as a neutral meeting ground, literally and metaphorically, for Pyongyang and Seoul. Moreover, given that the NAPCI seeks to maintain a cooperative relationship with other multilateral bodies and places emphasis on complementarity and inclusiveness, working with and supporting successful rounds of the UB Dialogues would be a principled move on the part of South Koreans. Moreover, engagement with North Korea through the UB Dialogue most likely represents an easier path to increasing inter-Korean trust than bilateral efforts and even easier than the NAPCI. South Korea’s domestic divisions and bitter left-right infighting tend to weaken the government’s position in approaches to the North. Seoul’s military standoff and competition with the North, its alliance with the United States, and participation in international sanctions regimes all cause suspicion in Pyongyang. In short, Seoul’s complex list of concerns and goals, some of which are contradictory to the spirit and practice of trust-building and cooperation with North Korea, create difficult conditions for progress through NAPCI alone.

In addition to lacking this baggage, Mongolia has unique standing with both North and South. It is a former Soviet satellite state that asserted full independence in 1990, and it is notable for successfully transitioning from a communist state to a vibrant democracy without civil war or bloodshed. President Elbegdorj’s 2013 speech in Pyongyang contained strong enunciation of the tenets of liberty. At the elite Kim Il Sung University in Pyongyang, he addressed students with these bold words: "No tyranny lasts forever. It is the desire of the people to live free that is the eternal power." And the Mongolian government has been keeping its border open to North Koreans who risk the arduous journey out of the DPRK and has permitted its airlines to transport them to South Korea.

Additionally, Mongolia has become a model of economic modernization and prosperous participation in the global economy. Although it faces some economic imbalances, its GDP rate was sky-high at 11.7 percent in 2013. There are good lessons to share with North Korea, and President Elberdorgj has made it clear that Mongolia would be very willing to work with the DPRK on economic development, IT, infrastructure, the management of mining precious earth resources and refineries. The two countries also engage in a worker exchange program, affording DPRK citizens the opportunity to breathe the air of freedom and to be exposed to South Korean television programming while they reside in Mongolia.

In recent years, Mongolia has pursued multiple types of people-to-people activities involving North Koreans, including academic exchanges, northeast Asian mayoral forums, and women’s parliamentary exchanges including female leaders from both Koreas. In June 2015, the second Track 2 conference of the UB Dialogue will convene in Ulaanbaatar with scholars from across the region and the United States with the theme of “Energy, Infrastructure, and Regional Connectivity.”

Sports and cultural initiatives in the past years have included international boxing matches in Ulaanbaatar with boxers from the DPRK, ROK, Mongolia, Russia and China. In 2013, Mongolia established an International Cooperation Fund which has supported children’s summer camps, basketball training and other exchanges with the DPRK in order to promote positive peace and people-to-people development in the region.

In the humanitarian arena, food aid to the DPRK has been channeled through international organizations, and the two countries have cooperated on physician exchanges. Prior research by Caprara and Ballen, conducted in cooperation with United Nations Special Envoy for Financing the Health Millennium Development Goals and for Malaria, has noted the additional soft power benefits of cooperative service development projects.

A recent global development forum hosted at the United Nations Asia-Pacific headquarters in Bangkok launched an Asia Pacific Peace Service Alliance which could build on these bilateral and regional exchanges in the critical area of humanitarian action and development in North Korea. An International Youth Leaders Assembly has been proposed in Ulaanbaatar for June, 2015, which would further the role of youth in fostering track two initiatives of service and dialogue.

Dr. Tsedendamba Batbayar, Mongolia’s Director of Policy Planning in the Ministry of Foreign Affairs and Trade, visited Washington in November, 2014 and noted the broad range of Mongolia-DPRK exchanges. Together with Mongolia Ambassador Bulgaa Altangerel, he emphasized his country’s desire to serve as a fair broker and mediator for the Northeast Asia region and to pursue prudent and practical measures to help build bridges of understanding between the people of North Korea and other parties.

But despite its uniquely constructive approach to dealing with the DPRK and other regional neighbors, Mongolia faces unique challenges in the mediator role it seeks to achieve. First, Ulaanbaatar has been able to gain Pyongyang’s trust because of the quiet diplomacy it has pursued, staying behind the scenes and out of the limelight. This has enabled a steady channel to the Pyongyang elite, and a focus on bilateral interests has been maintained. In short, drama has been avoided. But if Mongolia plays a more high-profile role with North Korea and multilateral actors, it will most likely be difficult to avoid some drama—posturing, rhetoric, and standoffs—emanating from various parties. Second, any increased or intensified involvement of China, Russia, and the United States in UB-led dialogue could come with the headache of big power arrogance and competition over leadership. The value of Mongolia’s role and activities for regional cooperation and peace stems from the fact that Ulaanbaatar does not assume airs or seek to dominate others. Whether China, Russia, and the United States would be able to refrain from seeking leadership and disproportionate influence in UB-led initiatives is highly questionable. Third, with respect to peninsular issues, for the UB Dialogues to gain more acceptance and credibility regionally and internationally requires that the DPRK become a consistent and collaborative presence at gatherings. Whether any nation or actor has the capacity to deliver consistent and collaborative participation by Pyongyang is an open question.

In addition, some observers believe that the impasse between North Korea and other nations is not simply the result of a trust deficit, but reflects mutually exclusive goals. While Mongolian mediation may not be able to solve the nuclear issue, it can be an effective channel – among others – for increasing communication, finding common ground, and beginning to ease tension.

Mongolia is the one Northeast Asian country that has kept its emotional cool and balanced policy interests with North Korea and other regional actors. It has not tripped over its own feet by politicizing historical grievances with its neighbors. Rather, it has exercised a calm can-do approach while its neighbors have engulfed themselves in hyper-nationalistic and ideological mire. And it has smartly used diplomacy and entrepreneurship to make friends and develop its own economy and people. These are significant assets that can be of benefit not only to UB but also to the region.

Recommendations

1. The Obama administration should actively support the Ulaanbaatar Dialogue process and encourage Seoul to find common cause in advancing greater regional dialogue and collaboration with the Mongolians through Track 2 and 1.5 processes. A precedent for this can be found in the case of Oman, which the current administration effectively tapped for back channel dialogue with Iran, kick-starting the present nuclear talks. Also, support by Washington would build on a prior exchange with Mongolia hosted by the Korea Institute for National Unification (KINU), where scholars noted potential benefits from three-way economic cooperation and the possibility of providing the North Koreans with a proven model of transformation from a closed statist system to a prosperous and more open system.

2. ROK President Park’s proposed regional cooperation mechanism should receive serious attention together with the Ulaanbaatar initiative. The two parallel efforts could benefit from being part of inter-connected strategies to defuse regional tension and forge greater trustpolitik.

3. The UN ESCAP headquarters can serve as an important multilateral bridge for humanitarian aid together with the multi-stakeholder Asia Pacific Peace Service Alliance (APPSA), which was launched at the UN headquarters in Bangkok last October. The U.S. Agency for International Development (USAID) could partner with UN ESCAP and the World Food Program to establish a verifiable humanitarian aid regime, building on prior food aid oversight protocols developed during the Bush administration. Mongolia also would be an excellent candidate for the training of an international volunteer corps for potential disaster and humanitarian relief and economic development projects concerning the DPRK and the broader Northeast Asia region. Mongolia has excellent working relations with the U.S. Peace Corps, which also helped facilitate the recent launch of the APPSA.

4. In the context of peninsula unification planning, regional economic cooperation on private and multi-stakeholder investment projects and the enabling of market-friendly policies could be further explored with Mongolia and other Northeast Asian partners in areas such as infrastructure, energy, and technology.5. Cultural and educational exchanges between Mongolia and the DPRK could be expanded on a multilateral basis over time to include the ROK, China, Russia, Japan and ASEAN nations together with UNESCO to further cultural bases and norms of peace.

Event Information

Northeast Asia has seen significant leadership changes in recent months, with the election of Park Geun-hye as president of South Korea, Xi Jinping as leader of China’s ruling Communist Party, and Shinzo Abe as prime minister of Japan. As leaders of world-leading economies, these key players will no doubt bring about dynamic change in the region’s politics and economy, while balancing relations with the United States and its own newly re-elected president.

On November 28, 2012, the Center for Northeast Asian Studies (CNAPS) at Brookings, the Japan Center for Economic Research, and Nikkei held a one-day conference on “Managing Transitions in Northeast Asia, the Global Economy, and Japan-U.S. Relations.” Three panels, featuring Brookings scholars as well leading experts from across Asia, provided their views on issues of profound importance to the Northeast Asian region including leadership transitions, global economy and trade, global governance, and U.S.-Japan relations in the 21st Century.

Audio

• Part 1: Managing Transitions in Northeast Asia, the Global Economy, and Japan-U.S. Relations
• Part 2: Managing Transitions in Northeast Asia, the Global Economy, and Japan-U.S. Relations