Obama offers Myanmar better ties if it reforms

By Patricia Zengerle and Caren Bohan

TOKYO (Reuters) - U.S. President Barack Obama on Saturday offered Myanmar the prospect of better ties with Washington if it pursued democratic reform and freed political prisoners, including opposition leader Aung San Suu Kyi.

Obama will be in the same room as the Myanmar prime minister when leaders of the Association of Southeast Asian Nations (ASEAN) hold their first meeting with a U.S. president in Singapore on Sunday. Obama has no intention of speaking directly to Lieutenant-General Thein Sein, U.S. officials have said.

The Obama administration has said it is pursuing deeper engagement with the military government in Myanmar, known in Washington by its former name Burma, and this month sent its highest-level delegation to the country in 14 years.

In a speech at the start of a four-nation tour of Asia in Tokyo, Obama said neither U.S. sanctions nor engagement by other nations had succeeded in improving the lives of Myanmar's people.

"So we are now communicating directly with the leadership to make it clear that existing sanctions will remain until there are concrete steps toward democratic reform," Obama said.

"We support a Burma that is unified, peaceful, prosperous, and democratic. And as Burma moves in that direction, a better relationship with the United States is possible." Obama said the specific steps that were needed were the release of all political prisoners, including Nobel Peace Prize winner Suu Kyi, and a genuine dialogue between the government and the political opposition.

"That is how a government in Burma will be able to respond to the needs of its people. That is the path that will bring Burma true security and prosperity," Obama said.

Obama had no plans for direct talks with Myanmar's leaders during his meeting with ASEAN on Sunday, Secretary of State Hillary Clinton said this week, while adding that the opportunity might arise for her or Obama to meet the regime's officials.

Obama's meeting with ASEAN leaders takes place on the sidelines of a weekend summit of the Asia Pacific Economic Cooperation (APEC) forum in Singapore.

Myanmar's military, which has ruled the country for almost 50 years, plans to hold multi-party elections in 2010.

Suu Kyi has spent more than 14 of the past 20 years in detention of one sort or another, mostly under house arrest.

Myanmar's military government is shunned by the West over its rights record, which has kept previous U.S. presidents from meeting all 10 members of ASEAN, of which Myanmar is a part.

But since taking office less than a year ago Obama has greeted and spoken to leaders such as Venezuela's Hugo Chavez who were avoided at international summits by his predecessor.

The Obama administration decided in September to pursue deeper engagement with Myanmar to try to spur democratic reforms. U.S. Assistant Secretary of State Kurt Campbell visited Myanmar last week.

Despite the increased diplomacy, Clinton said there were no plans at this stage to drop U.S. economic sanctions on Myanmar.

(Writing by Dean Yates; Editing by John Chalmers)