US restoring full ties to Myanmar in 'substantial step forward'

The United States said on Friday it would upgrade diplomatic relations with Myanmar after President Barack Obama called the release of 200 political prisoners a "substantial step forward" in the Southeast Asian country's democratic reforms.

U.S. Secretary of State Hillary Clinton said Washington was ready to begin the process of exchanging full ambassadors after an absence of two decades, and would consider additional measures if the new civilian-led government's reforms continue.

"Much more remains to be done to meet the aspirations of the Burmese people, but the United States is committed to continuing our engagement," Obama said in a statement.

The U.S. move followed Myanmar's announcement that it was freeing some 200 political prisoners in an amnesty in the latest sign of change in a country that has spent half a century under authoritarian rule.

U.N. Secretary-General Ban Ki-moon also welcomed the prisoner release, calling it the most significant to date, and called on the international community to respond "by helping build conditions for sustaining the reform process."

The United States downgraded its diplomatic representation in Myanmar to charge d'affaires following a military coup in 1988 and a violent crackdown on pro-democracy protests in the country, formerly known as Burma.

Clinton, citing progress on a number of fronts, said the next step was to identify a candidate to return to Myanmar as the U.S. ambassador.

"This is a lengthy process, and it will, of course, depend on continuing progress and reform. But an American ambassador will help strengthen our efforts to support the historic and promising steps that are now unfolding," she said.

Senate Republican leader Mitch McConnell, who was en route to Myanmar for a visit on Friday, issued a statement describing the upgrading of ties as "entirely appropriate."

"While the (Myanmar President) Thein Sein government will need to do more to explain the military relationship with North Korea and hold free and fair elections, it appears entirely appropriate that the United States would consider restoration of more formal ties," said McConnell, who has been a leader in Senate efforts to apply economic sanctions on Myanmar.

SANCTIONS NOT IN PLAY - YET

The sanctions imposed by United States and other western nations have crippled Myanmar's economy, despite its rich resources including natural gas, timber and precious gems, and driven it deeper into the embrace of regional power China.

Clinton said she had instructed her team at the State Department to "to identify further steps that the United States can take in conjunction with our friends and allies to support the reforms underway," but did not suggest any step to remove sanctions was imminent.

Myanmar held elections last March which saw a nominally civilian government - although still heavily weighted toward the military - take over from the ruling junta.

Since then, the government has embarked on a series of reforms that have prompted the United States and other western nations to suggest they may eventually remove sanctions if enough progress is made.

Clinton, who traveled to the isolated Southeast Asian nation in December, said the United States welcomed reforms already under way, which included freeing veteran pro-democracy leader Aung San Suu Kyi in November 2010.

"I intend to call President Thein Sein and Aung Sang Suu Kyi this weekend to underscore our commitment to walk together with them on the path of reform," Clinton said.

Clinton said the United States would work with Myanmar to address concerns of ethnic minority groups, ensure that elections scheduled for April 1 are free and fair, and that all remaining political prisoners are also released.

"But this is a momentous day for the diverse people of Burma and we will continue to support them, and their efforts, and to encourage the government to take bold steps that build the kind of free and prosperous nation ... they desire to see," she said.

(Additional reporting By Matt Spetalnick and Louis Charbonneau)