Sanctions against Myanmar won't help: Singapore PM

SINGAPORE (Reuters) - Tightening sanctions on military-ruled Myanmar for its brutal crackdown on pro-democracy protesters would probably be counter-productive, Singapore's prime minister said in an interview published on Friday.

Lee Hsien Loong also said that the military, which has ruled former Burma for 45 years, was a key institution that would have to be a part of any national reconciliation process.

"We have to be mindful of the realities of the situation. First, sanctions against a regime that is ready to isolate itself are more likely to be counter-productive than effective," Lee told the Straits Times newspaper.

Lee also said China had been "quietly exerting its positive influence" on Myanmar's rulers to make the visit by U.N. envoy Ibrahim Gambari this week a "success".

"China and India are critical to any international approach to Myanmar. Both share borders with Myanmar," he said.

Singapore is one of Myanmar's biggest foreign investors and its trade with the country last year was S$1 billion ($675 million).

The city-state is currently chair of the Association of Southeast Asian Nations (ASEAN), whose foreign ministers last week voiced "revulsion" at the killings of protesters in Yangon.

Lee said in the interview that it was better for Myanmar to remain part of ASEAN as the regional grouping could "engage" the country and "help it to move forward".

ASEAN admitted Myanmar in 1997 amid international criticism and the country's membership has been a source of friction between the European Union and the Asian group.

($1=1.480 Singapore Dollar)