Mongolia has unique fundamental advantages for mediation comparing to other nations in the Central and Northeast Asia, partially because of its "smallness."
No Territorial Disputes, No Attached Interests
Mongolia has clear border demarcation with both Russia and China. Both neighbors recognized absence of territorial disputes with Ulaanbaatar (Грайворонский 1999, 67). This fact makes it only country that has no territorial disputes in the region.
A country that has territorial disputes with one of two disputing parties can never be a neutral mediator for the issue the parties deal with. No Central Asian country has clear demarcation with all its neighbors today. Nor NEA nations have settled their territorial disputes. Lack of border demarcation and unsettled territorial claims effectively remove these countries from list of possible neutral mediators.
Friendly Relationship with All Regional Actors
Mongolia has friendly relations with all countries in the region. There is no "hostile" nation in both Central and Northeast Asia, therefore, all nations deserve to name their relationships "friendly" and they do; however, Ulaanbaatar's "friendliness" comes from its "smallness."
In Mongolia's case, the word "friendly" may refer twofold meanings. First, it means no disputed issues with other regional actors. Denying any possible reason of disputes is a survival strategy of a small country. Ulaanbaatar certainly has different views and positions form other regional powers, including neighbors, on certain issues like that was in Iraqi War, but the strategy requires avoiding and settling the difference of views before it escalates to disputes. "Friendly" policy makes Ulaanbaatar the best choice for mediator of the regional security issues since it prevents Ulaanbaatar from backing up one regional power against another,
Second, it means tolerance with and recognition of differences of views. This explains Mongolia's good relationship with the DPRK. Exchange of high level officials' visits has gradually increased between the two nations. Prime Minister of Mongolia has twice visited in Pyongyang recently, and Kim Yong Nam, President of Presidium of Supreme People's Assembly paid an official visit in Ulaanbaatar in 2007. Two nations have signed Treaty of Friendly Relationship and Cooperation in 2002 (Mongolia - DPRK Agreements n.d.). Mongolia hosts guest workers from North Korea in its agricultural and construction sectors. Although Mongolia is not a rich country, it generously provides humanitarian assistance to North Korea (Mongolia - DPRK Agreements n.d.) and offers its hospitality to those North Korean citizen who decided to leave their country. Friendly relationship with North Korea provides a potential advantage of Mongolia's mediating role although the success will depend on Pyongyang's recognition of Ulaanbaatar's policy and Beijing's interest to become a bridge between North Korea and the world.
Small Power as Honest and Impartial Broker
Mongolia's inability of exerting power to change others' policies strengthens the credibility of its potential mediation in the region. Nations discussing a sensitive security issue in Ulaanbaatar may feel comfortable about the host country's neutral intention.
Smallness of Mongolia is usually looked as disadvantage, but it becomes advantage in mediation (Chong 2007, 6). In fact, Mongolia may threaten no nation in the region (Molomjamts 2009). Disarmed nature of the "smallness" removes suspicion of Ulaanbaatar's impartiality.
As a small country, Mongolia has no attached interest in any regional disputes, which is the fact solidifying its impartiality. Sandwiched location between Russia and China, on the one hand, isolates it from rest of the world. From this vantage point, it is a disadvantage. But, in the other hand, this location makes Russia and China Mongolia's big buffers that protect it from any possible regional and international disputes, a fact that gives relative advantage. Ulaanbaatar can broker any regional problems impartially since it has no direct interest to the problems, arching from behind its two big buffers.
Neighbor regions of Mongolia composed of global and regional powers, interests of which frequently contradict. Major powers such as the United States, Russian Federation, the PRC, middle powers like Japan and South Korea, and the DPRK, which pursues "protest diplomacy (Henrikson 2006)" are all in NEA. In Central Asia, Tajikistan and Kyrgyzstan effectively pursue pro-Russian policies and Kazakhstan is emerging as a middle power. All these nations play or try to play important roles in regional as well as global politics. Compared to these actors, Mongolia's position is modest and neutral by its nature and takes no attempt to play a major role in regional politics.