With the center of global economic activity shifting rapidly from the United States and Europe toward Asia, opportunities are being generated for the Pacific developing member countries (DMCs) of the Asian Development Bank (ADB) to benefit from increasing economic interdependence with Asia. Economic transmission channels are (i) trade in goods; (ii) trade in services, in particular tourism; (iii) finance and foreign direct investment; (iv) labor and remittance flows; and (v) aid.

Regional integration offers Mongolia the opportunity for a more prosperous future. But the country has lagged in this effort, which is surprising given its geographical location where bold integration initiatives have been launched, such as the People’s Republic of China’s (PRC) “Silk Road Initiative,” and where economic alliances have been strengthened under Central Asia Regional Economic Cooperation (CAREC) and Shanghai Organisation for Cooperation (SCO).

Central Asia has for centuries been seen as a neglected Russian “backyard,” but international interest in the region has increased over the last two decades because of its vast stores of energy and natural resources. But to achieve a brighter future the region must pursue economic integration. In the early 1990s, Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan became independent countries with the collapse of the Soviet Union. The abrupt separation from Moscow, the sudden interruption of economic relations under the Soviet Union, and the unprepared transition from state-directed to market economy created a deep economic crisis in all five countries. The beginning of this century saw their economic systems change and stabilize—but this occurred as these countries disclosed strong authoritarian trends.