Q+A: Why is the United States engaging with Myanmar?

BANGKOK (Reuters) - It would be very hard for elections next year in army-ruled Myanmar to be credible without detained opposition leader Aung San Suu Kyi's involvement, a top U.S. official said on Thursday.

Deputy Assistant Secretary Scot Marciel made the comment after a two-day visit to Myanmar, the first in 14 years by a top U.S. delegation and part of Washington's new policy of rapprochement with the reclusive junta.

WHY IS WASHINGTON ENGAGING WITH MYANMAR?

The Obama administration has recognized sanctions have failed and dialogue is needed to spur democratic reforms. It believes there is a better chance of progress if it engages and encourages the junta instead of disparaging the regime and ignoring it.

Washington is also concerned about reports of possible nuclear ties between North Korea and Myanmar, although it accepts there is so far scant evidence to prove this.

IS THERE A GEOPOLITICAL AGENDA?

Analysts and diplomats see another big factor behind the change in Washington's stance: China. It is no secret the United States is concerned about China's influence and wants to counter that by strengthening its presence and diplomacy in the region.

China may not be Myanmar's greatest friend but it is its economic lifeline, pumping billions of dollars into the country and serving as a reliable political ally. Washington might not be be so comfortable with that.

China has begun building a crude oil port in Myanmar, part of a pipeline project aimed at cutting out the long detour oil cargoes take through the congested Malcca Strait. The nearly 1,000-km long pipeline is expected to provide Myanmar with at least $29 billion over the 30 years, according to rights groups.

"It's is a big concern and geopolitically, it's difficult to counter the effect of China," said Sean Turnell, a Myanmar analyst at Australia's Macquarie University.

"However, Burma sees China's economic domination as a problem and it might want to show Beijing is not its only friend in town."

WILL WASHINGTON LIFT SANCTIONS?

Not yet. While accepting sanctions have failed, the United States insists trade, banking and travel embargoes will remain in place, despite the softening of its stance toward Myanmar.

Marciel said sanctions could be reviewed, and the issue put before lawmakers, only if the generals showed significant progress toward reforms, which could be a long way off.

WHAT IS THE UNITED STATES ASKING OF THE JUNTA?

Its main objective is to encourage the generals to be more inclusive and to make sufficient concessions to allow all players to take part in the political process, which includes ethnic groups and opposition parties.

Washington has repeatedly asked for the estimated 2,000 political prisoners to be freed and allowed to take part in the polls, and wants Suu Kyi to be released, or at least allowed to meet with her party.

WHAT WILL HAPPEN NEXT?

Washington says it is taking a pragmatic, open-minded approach and has described this week's visit by the fact-finding mission as "exploratory dialogue."

Both sides have agreed to appoint a special envoy to continue the two-way dialogue, but it is perhaps too soon for higher-level meetings. This week's snub by junta supremo, Senior General Than Shwe, was indicative of that.

Marciel said it was unlikely a meeting would take place between Myanmar Prime Minister Thein Sein and either U.S. President Barack Obama or Secretary of State Hillary Clinton at the inaugural Association of South-East Asian Nations/United States summit in Singapore later this month.

(Editing by Jason Szep)