Via The Financial Times, an article on Myanmar, a pariah state taking tentative steps to attract foreign investors:

“…They have decided to change. It’s not what we called for, but there are changes. Even if they are pretending to change, we should push them so the change becomes irreversible. If we keep saying that ‘you haven’t changed the way we want’ and put obstacles in the way, then the changes will never come.”

The words are those of Harn Yawnghwe, son of the last hereditary ruler of an ethnic Shan principality in Burma. He went into exile as a teenager in 1963 after the country’s newly rampant military killed his brother and sent his father to die in prison.

Mr Yawnghwe is these days the director of the Euro-Burma Office in Brussels, established by dissidents to promote democracy in the downtrodden south-east Asian country. This month, he has been making his first return visit to his homeland.

Few people, in Burma or the outside world, had high expectations when in March the army handed power to a quasi-civilian government after nearly five decades of repressive rule. The handover followed a tightly controlled – some say rigged – election under a new constitution that preserved much military clout, including the right to appoint one-quarter of the members of a new parliament.

The man designated as president seemed hardly more promising. Thein Sein, a recently retired general, had made little impact in four years as prime minister in the junta led by Senior General Than Shwe.

But his inauguration speech set a fresh tone. He outlined an agenda of inclusive economic development and promised to renew crumbling health and education systems, fight corruption, pass laws to protect human rights and co-operate with those holding “different ideas and concepts” on issues of national interest.

Since then, the long-suffering population of Burma (renamed Myanmar by the generals) has witnessed almost unimaginable change. Censorship has been eased to allow debates, criticism and interviews with dissidents in domestic news publications. On the internet, previously inaccessible foreign news and opposition websites have been unblocked. Political exiles such as Mr Yawnghwe have been invited to return. Experts have been appointed to advise on reviving the economy. Parliament has held robust televised debates, has adopted a law permitting independent trade unions and is considering legislation that would make it easier to protest.

In August, Mr Thein Sein met Aung San Suu Kyi, the Nobel Prize-winning democracy leader who was reviled by the junta. She later told diplomats she believed the president was sincere in his desire for reform. In September, Thein Sein risked alienating the country’s long-time patrons in Beijing by suspending a $3.6bn Chinese dam project that would have flooded an area the size of Singapore. This month, the government released nearly 200 political prisoners, beginning what is expected to be a phased release of up to 2,000 dissidents.

The pace of change has persuaded many that the president is serious in his ambitions to bring development and greater freedom to a country that has suffered from economic stagnation, political repression and international isolation. The sense of excitement has brought renewed attention to a nation rich in oil and gas, gems and timber, and situated at the strategic crossroads of Asia, wedged between China and India. A country that because of sanctions the west had appeared to have lost to China is suddenly back in geostrategic play.

“There is a fundamental rethinking of the political direction of the country,” says Richard Horsey, who spent five years in Burma with the International Labour Organisation. “We should see this as a transition. It’s not a flick of the switch from authoritarianism to a fully open society. But the intention is to undertake a far-reaching liberalisation of governance in the country.”

Western capitals, which have long treated Burma as a pariah and subjected it to a range of sanctions, are now scrambling for an appropriate response to developments that are still fraught with uncertainty. Mr Thein Sein is almost certainly no liberal democrat and his initiatives take place within a constitutional framework that will leave Burma far short of the democratic changes for which many western governments, and Burmese exiles, have long pressed.

. . .

Yet in a region where authoritarian governments such as China and Vietnam have improved their people’s lives by enabling rising prosperity, many argue that the west should support any credible effort at more rational, open policies after decades of erratic military fiat. With its trove of natural gas and a largely untapped domestic market of some 54m, Burma is also of keen interest to western multinationals, which had mostly been deterred from doing business there by sanctions, red tape and reputational risk.

Burma’s recent history of false dawns and dashed hopes gives ample reason for caution. In 2002, Ms Suu Kyi was released from house arrest, raising expectations that the regime was poised to negotiate a transition from military rule. Just a year later, she was attacked by regime thugs and taken into custody. Back under house arrest, she then agreed a deal with Gen Khin Nyunt, the military intelligence chief of the time, for her NLD to attend the regime’s constitutional convention. But at the last minute, Gen Than Shwe vetoed the deal. Gen Khin Nyunt was later purged and put under house arrest himself. Ms Suu Kyi was released only last November.

Espen Barth Eide, Norway’s deputy foreign minister, who met ministers and Ms Suu Kyi on a recent trip to Burma, argues that the country could be at the start of a transition similar to those of recent decades in formerly autocratic Taiwan and South Korea. They gradually came to allow more “moderate pluralism” without dramatic ruptures. “This is as good as it gets – a military regime deciding not to be a military regime any more,” he says. “It may be the start of a rough ride. But it’s not fake. There’s something real going on.”

Striking the right balance between maintaining pressure and supporting change is a high-stakes game at a time of rising tensions between Washington and Beijing over influence in Asia – and not everyone shares the new optimism. Pro-democracy campaign groups, and some members of Ms Suu Kyi’s National League for Democracy, dismiss the changes as easily reversible tactical manoeuvres to help win an end to sanctions. Human rights groups and freed dissidents themselves were disappointed by the limited scale of the recent prisoner release, which left many prominent campaigners behind bars.

“Thein Sein is on a journey and his destination is not democracy,” says Mark Farmaner, director of the Burma Campaign UK, another lobbying group. “His destination is lifting sanctions and gaining international legitimacy. He is looking around the world and seeing all these other dictatorships that don’t have sanctions and have normal diplomatic relations, and he wants the same. He is prepared to make more compromises to achieve that goal than his predecessors.”

Gen Than Shwe is now in retirement. That, say some observers, has given Mr Thein Sein the opportunity to push through important changes, backed by a handful of like-minded former military men. “From the outside, we’ve always seen the regime as if it were some monolithic, coherent whole,” says historian Thant Myint-U, author of two books on Burma. The reality was more fluid. “Thein Sein realises what many people have realised, which is the way that things were going in Burma was not sustainable, and that people in the country deserved a better government,” he adds. “There are ways in which one can improve the government without having a bloody revolution.”

. . .

People in contact with government officials say many in the ruling elite have long been dismayed by how far Burma has lagged behind its neighbours. The country has some of Asia’s highest poverty and malnutrition rates despite possessing some of its most fertile land. Much of the military top brass is also said to be discomfited by the tightening embrace of China. Diplomats say Mr Thein Sein is looking to improve relations with the west to counter dependence on Beijing.

“There is a sense that they need to have a more balanced set of external economic and political relations,” says Mr Horsey. “In their mind, they are susceptible to losing sovereignty. They think back to weak Burmese kings who, because of their failure to keep up with political and technical trends of the times, were dominated by foreigners.” One European diplomat who has been visiting the country for years says the government has “come to the conclusion they can’t survive without the west”.

Still, Mr Thein Sein’s reform path is fraught with risk. He faces opposition from military hardliners. Many officials are sitting on the fence, reluctant to commit. For now, the president seems to have the upper hand. But analysts fret that any outbreak of social unrest could provide an excuse for hardliners to retake power, through a constitutional provision that allows the army to declare a state of emergency. “The worst case is that there is some big disaster, which he mishandles. Then the army has a reason to come back in,” says Mr Yawnghwe from the Euro-Burma Office.

So far, the US and the European Union have responded cautiously to the unfolding events, welcoming the changes but saying the government must release more political prisoners before they will consider a relaxation of sanctions. Renewed fighting between the army and ethnic militias in Burma’s restive minority areas remains another concern.

“There are still real questions about how far they are going to go and where this is going to lead,” Derek Mitchell, the US special envoy for Burma, told journalists in Washington last week. “If in fact we do see reform, change, along those lines of democracy, human rights, national reconciliation and development, they will have a partner in the United States.”

In calibrating their response to events in Burma, western capitals are likely to take their cue from Ms Suu Kyi, who has struck a cautiously positive tone. Nyan Win, an NLD activist and former political prisoner, says the party is “thinking about how we can co-operate with the government and what we can do for democracy and human rights. We are optimistic that the present government wants to change towards democracy.”

Or as Mr Yawnghwe puts it: “If you ask people outside Burma, they’ll say it’s a sham. But if you look at people inside, they are saying, ‘let’s go with it, because this is what we have got’.”