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BANGKOK (Reuters) - Rare overtures by Myanmar's reclusive, authoritarian rulers toward liberalization and reform suggest change could be afoot in the isolated nation.
The sudden stream of conciliatory gestures by Myanmar's new civilian government has raised questions about the motives of the generals who only five months ago controlled one of the world's most secretive, corrupt and oppressive regimes.
Diplomats, political analysts and many Burmese interviewed inside Myanmar say the retired generals brought back to power after a controversial election last year now appear to realize some moves toward reform could be the key to their survival.
Last week, President Thein Sein held an official meeting with and Aung San Suu Kyi, the Nobel Peace Prize winning democracy advocate who was detained for 15 years until released from house arrest last year.
The meeting was welcomed by the international community, but widely regarded as theater.
Western sanctions in place since the military crushed a 1988 student uprising have isolated Myanmar's army dictatorships and continue to frustrate the new government, but there are no signs these will be lifted until there are concrete reforms, in particular, the release of an estimated 2,100 political prisoners.
"What seems to be happening is that the regime is seeking to make itself appear legitimate, a genuine and emerging democracy," said Michael Charney, a Myanmar expert at London's School of Oriental and Africa Studies.
"I don't see any of this as a positive step forward for democracy, but instead as a means of cementing in place the positions of the families who currently hold power over the country with a view toward long-term control."
The process of consolidating political power began long ago but accelerated in late 2009 when hundreds of state assets were auctioned off as part of an opaque privatization boom in which cronies of the then-military junta snapped up lucrative contracts, business monopolies and property.
The sell-off preceded a carefully choreographed election in November that was won by a military-backed party. Thein Sein, the fourth in command of the former ruling military body, was chosen by parliament to become head of state. He hand-picked his own ministers.
The election and privatization created a veneer of democracy and liberalization in the former British colony also known as Burma, ensuring power, wealth and patronage was concentrated in the hands of a military-linked establishment, as previously seen in Indonesia and as now entrenched in neighboring Thailand, where politics, business and the army are closely intertwined.
But despite those changes, Myanmar remains an international pariah, entangled in Western sanctions that restrict and stigmatize the country's elite.
Experts suggest those tycoons may have leaned on the government to talk up reforms, engage with Suu Kyi and to try to appear more transparent and tolerant.
Western governments are watching, along with multinational companies, some of which have privately lobbied for an end to sanctions on the impoverished country of 50 million people, which is rich in natural gas, timber and gemstones and nestled strategically between economic powerhouses India and China.
Recent overtures include calls for peace with armed ethnic separatists, presidential meetings with technocrats and foreign delegations, some tolerance of criticism, and the involvement of Suu Kyi in consultations about reconciliation and reform.
In one gesture, Myanmar's state-run newspapers last week dropped back-page banners attacking Western media. Three official newspapers dropped half-page slogans that had been running daily accusing the Voice of America (VOA) and the British Broadcasting Corp (BBC) of "sowing hatred among the people," and other Western media of "generating public outrage."
Yangon-based diplomats have expressed surprise at the government's apparent change in tone but want to see more substantial progress.
"So far, so good," said one Western diplomat. "I'm guardedly optimistic about further progress, but let's wait and see."
The mood is similar among parliamentarians. "Lawmakers, regardless of their party or background, have become more optimistic about the situation than before," said Aye Maung, a senator and leader of the Rakhine Nationalities Development Party.
It is unclear whether Thein Sein is making the changes on his own or doing so at the request of Than Shwe, his political master and the country's much-feared former strongman, whose orders are rarely defied.
Britain's Foreign Office praised the meeting with Suu Kyi as encouraging. Washington said it supported Suu Kyi's decision to engage in "open and transparent dialogue."
U.N. Secretary-General Ban Ki-moon went further, saying: "it is in the national interest that they seize the opportunity to extend and accept conciliatory gestures."
Win Min, a Burmese political scientist at Harvard University, said he believed Myanmar's new government was trying to convince the 10-member Association of South East Asian Nations (ASEAN) to allow it to take its rotating presidency in 2014, two years ahead of schedule and a year before a general election the government does not want to lose.
The government, he said, saw hosting ASEAN as "crucial" because it would represent a degree of international acceptance that could lead to A reduction of sanctions and the possibility of aid from international financial organizations.
Myanmar has invited a delegation from the International Monetary Fund (IMF) to visit in October to advise policymakers on how to tackle problems with the kyat currency, which has appreciated 20 percent in a year, hurting farmers and exporters and bankrupting businesses.
After months of inaction and simmering anger, the government last month cut taxes for exporters and has promised agriculture loans and price guarantees for millions of farmers, suggesting it may be concerned that any mishandling of bread and butter issues could see a repeat of bloody uprisings in 1988 and 2007 that were sparked by soaring inflation and fuel prices.
David Steinberg, a veteran Myanmar analyst at Georgetown University in Washington said the lack of substantive concessions, especially political prisoners, meant real reforms or any undoing of sanctions would not come soon.
But he said the gestures were important indicators, and the government should be given the chance to prove itself.
"We're seeing the possibility of change, things we've not seen before," he said. "There's a lot of disagreement from those who think this is phony change. It might be phony, but we should at least be open to the possibility some of it could be real."
Additional reporting Aung Hla Tun in Naypyitaw; Editing by Jason Szep and Miral Fahmy