On May 23rd, 2014, Mongolia provided North Korea and the United States neutral ground in its capital for track 1.5 meetings. Presumably, North Korea’s chief nuclear envoy met with two former US State Department officials to discuss resumption of the Six-Party Talks, which have reached a complete standstill since 2009. Ulan Bator has been keen on normalizing Pyongyang’s fractious relations with its adversaries and assist its Soviet-era ally in implementing economic reform. In this way, Mongolia unveils an alternative strategy that could incrementally reconfigure Pyongyang’s behavior, offering the US some lessons for its failing North Korea policy.

As a Soviet satellite, Mongolia was the second country to recognize North Korea and it received more than 200 orphans following the Korean war. Ulan Bator continued its charitable moves after its democratic transition, delivering food aid numerous times during North Korean hardship. Even though bilateral relations made a downturn after Mongolia’s post-communist strategic swung towards South Korea (Ulan Bator stepped up its trade with Seoul during the 1990s), they were revamped in 2002 after North Korean Foreign Minister Nam Sun Park made the first high-level visit to Mongolia in 14 years.

Earlier this year, Ulan Bator actively sought to thaw relations between Japan and North Korea by inserting itself as an intermediary in the abduction conflict. In March, a Japanese woman who was abducted at the age of 13 by North Korean agents, was reunited with her parents in Mongolia. Meanwhile, Ulan Bator props up North Korea’s impoverished economy through cooperation and investment in industry, tourism, and agriculture.

While many human rights advocates denounce these efforts as solely reinforcing Kim Jong Un’s stranglehold on North Korea, economic cooperation and dialogue could offer the only viable opportunity of meticulously changing the country from within.

US-spearheaded sanctions and international isolation of the “Hermit Kingdom” have not brought the defiant Kim family to its knees during the past fifty years.

Notwithstanding the gruesome atrocities carried out by the regime against its people, simply condemning the North for its deplorable human rights record from the sidelines will not deliver any significant results. Nor will choking off its economy. These policies have been tried for a long time, but to no avail. Diplomatic coercion has primarily solidified Pyongyang’s obstinate behavior, while only providing the West with moral justice on its side.

Mongolian President Tsakhiagiin Elbegdorj visited the reclusive state in October last year to cement a longstanding friendship. At the renowned Kim Il Sung University, he gave an unprecedented speech about freedom, upholding the rule of law and respecting human rights. “No tyranny lasts forever. It is the desire of the people to live free that is the eternal power,” thus Elbegdorj stated. He urged North Korea to emulate Mongolia’s transition model while implicitly encouraging Pyongyang to provide freedom to its people. Probably baffled by its content, no questions were asked by the professors and students in the audience. Instead, the speech was followed by lengthy applause.

What was particularly prudent about this visit, was that along with this value-laden speech, were lucrative cooperation and investment deals. Seeking to ease both countries’ dependence on China and Russia, Elbegdorj concluded significant trade and cultural accords. Through warming its relations with Pyongyang, some analysts claim that landlocked Mongolia seeks to obtain sea outlets to ship its energy resources and minerals to other Asian nations, and thus ironically gain potential access to international markets.

Ulan Bator has been pushing the Kremlin for rail construction to the North Korean port of Rajin, which would connect Mongolia with the North via Russia. Apart from being potentially profitable, these engagement efforts make Ulan Bator a crucial stakeholder in North Korea’s economy, rendering it increasingly costly for Kim Jong Un to ignore Mongolia’s calls for more freedom and stability on the Korean peninsula.

Mongolia’s thriving mining industry has fueled the country’s rapidly growing economy. According to The Economist, Mongolia was one of the top performers in 2013, expanding its GDP at a rate of 11.7 percent. North Korea, for its part, is seeking to implement its Byungjin policy of parallel nuclear development and economic expansion, irrespective of the United Nations (UN) sanctions regime. It has been reaching out to friendly nations such as Mongolia and Indonesia to attract foreign trade and investment and modernize its economy.

Last September, the Mongolian oil trading and processing company, HBOil, bought a 20 percent stake in North Korea’s Sungri refinery. HBOil announced that it would supply crude oil to the state-owned refinery for processing, and subsequently re-import refined products to Mongolia. By planting itself firmly into the North’s economy, and engaging it on a diplomatic level, Mongolia is potentially able to influence Kim Jong Un’s policies. Elbegdorj’s landmark speech may well indicate a readiness by Ulan Bator to utilize this privileged position vis-à-vis Pyongyang.

In line with its economic ascendance, Mongolia is translating its growing self-esteem into numerous prolific initiatives to bolster its diplomatic footprint within the Central and East Asian neighborhood. The Elbegdorj administration conceives of itself as a potential broker on Korean affairs, being the only country both Koreas trust. Mongolia’s Foreign Minister, Luvsanvandan Bold, underlined these aspirations when telling reporters that “Ulan Bator can be a useful platform to create understanding.” He stated that “What Mongolia can provide is leverage to improve the situation in the region and pursue the initiative for parties to share dialogue.”

Also, Mongolian construction and manufacturing firms have hired around 1,700 North Korean laborers to work in Mongolia. Bilateral agreements allow for 5,000 North Koreans to work there. Even though the Kim regime absorbs a large chunk of their remunerations, it remains incredibly lucrative for North Koreans to work abroad. What is particularly promising, is that these labor exchanges, however limited, expose North Koreans to the relative riches and plural perspectives of the outside world. Most experts on Korean affairs argue that first-hand experience in other countries, especially in post-communist Mongolia where people have recently lived through a democratic transition, could slowly modify their frame of reference by infusing them with information that deviates from the Pyongyang propaganda narrative.

Besides their converging interests in regional security and monetary benefits, both countries share common geopolitical concerns: Russian and Chinese dominance within Central and East Asia, and preservation of political and economic maneuvering space. Mongolia’s foreign policy agenda is replete with experience of balancing economic, military and political interests between its two neighbors. It has learned to deal with its geographic confines and still been able to maintain constructive relations with both Moscow and Beijing, cultivate close relations with powerful though distant nations such as the US, and project its regional interests successfully.

This pragmatic foreign policy, famously depicted as Mongolia’s Third Neighbor Doctrine, has mitigated pressure from China and Russia while simultaneously seeking to bring beneficial terms to the table in trade and diplomacy. It has avoided potential territorial disputes and nationalist tensions by stoically adhering to this long-term strategy, which is multilateralist and realist by nature. Following the recent Crimean conflict, which critically exposed the intimate Russian-Chinese connection, Ulan Bator will have to balance within its complex geopolitical environment once again.

North Korea is confronted with tightened UN sanctions and strained relations with its traditional patron in Beijing. Kim Jong Un thus eagerly embraces Ulan Bator’s outreach, enabling him to counterbalance external coercion. These overlapping geopolitical and security interests, in combination with shared economic goals, provide ample opportunity for Mongolia to try and change Pyongyang’s relations with the outside world, ameliorate its debilitated economy, and perhaps even encourage them to implement tentative political reform.

Of course, next to an appreciation of Mongolia’s goodwill, North Korea’s candidness towards the former also illustrates Ulan Bator’s geographical distance from the Korean peninsula and weakness relative to Beijing, Washington, Moscow, Tokyo, and Seoul. Notwithstanding the fact that Mongolia is developing itself into a strategic economic partner of Pyongyang, these greater powers possess far more potential leverage over the North.

However, Mongolia’s activist approach towards North Korea does offer some basic guidelines for a more sensible strategy. The Obama administration’s current policy of strategic patience (which most Korea observers refer to as “doing nothing”), did not bring about any efforts towards denuclearization or a desired change in North Korean behavior; rather the opposite. Nor did diplomatic isolation and punitive sanctions alter the regime’s actions or hamper its continuity during the last five decades.

Even though North Korea remains anxious about its security position in East Asia, and therefore hard to deflect from its strategic-military arrangement, Mongolia’s approach of investing in the North and becoming a stakeholder in its development, represents a far more promising alternative. Elbegdorj’s speech surely testifies to its potential.