Myanmar's newly formed civilian government headed by a former army general President Thein Sein is surprising regional as well as international community by relative transparency and flexibility.  This has also encouraged leaders as Suu Kyi who and her Party, the National League for Democracy were banned from elections to seek greater engagement with the government. Suu Kyi has met with Thein Sein once and is hoping to meet him again. Labour minister Aung Kyi speaking to her on behalf of the government has already met the Nobel Laureate in Yangon thrice.

The Government also surprised all by suspension of the Myitsone dam project in Kachin State due to agitation by the local activists. The Dam is being funded by China and is expected to cost $3.6 billion. The activity is halted as, `it is against the will of the people,' as per a statement in the Parliament Environmental activists had brought up concerns over displacement and damage to ecology.

This decision will go down well with the international community. However the Dam is not likely to be completely off the table and may be taken up after an environmental and human displacement impact is undertaken to ensure that there is enough relief to the people. Apart from Myitsone, Myanmar have a number of dam projects in the offing most of them on the Irrawaddy and its feeders from the Chinese side of the border which are key revenue earners as electricity generated would be sold to China’s Yunnan province. The Chinese appeared to be surprised by this move and Foreign Ministry called for talks. "The Myitsone dam is a jointly invested project between China and Myanmar, and has been ... thoroughly examined by both sides," the ministry said in a statement, "relevant countries should guarantee the legal and legitimate rights of Chinese companies." Thein Sein may have a lot of explanation to do to Beijing.

The United States appears to be encouraged by these and other developments and has called for India to use its influence to push the Myanmar government to carry out more political and economic reforms.  Deputy Secretary of State William J. Burns speaking at the Brookings Institution said the US was happy with the current developments. On the path to possible rapprochement with Myanmar, US is keen that there should be some assistance for reconciliation with the new government in the country and India can play a fruitful role in the same thereby bringing Washington and President Thein Sein together after a long period of estrangement.

It is apparent that this is a change in the stance of the US government wherein the US President in his visit to New Delhi in November 2010 had asked India to break off relations with Myanmar. Indian analysts had castigated the statement by Mr Obama in the parliament and their stand seems to have been vindicated given that there is a shift in tack with a new government in the country which is keen to engage and is giving up isolationist policies of the military junta. How India is able to cash in on this opportunity now remains to be seen?

In a clear strategy to assume the chair of the ASEAN which it had been denied in the past as the country was under a military junta, the new Myanmar government is interacting with civil rights groups, Nobel Laureate Aung Suu Kyi, ASEAN as well as other emissaries including the US and UN. This is intended to open up space for consideration of the country for the ASEAN chair in 2014 which would be an acknowledgement of shift from a military to a civilian government. Given history of ASEAN states as Indonesia and Thailand where the military has been either in power or has a powerful say in political affairs even today there is hope that Myanmar’s case may also be favourably considered. However the main resistance is likely to be from the US and the West as in the past as well the Chair was denied to Myanmar due to this reason

Changes in Myanmar have been slow in coming and thus there have been accusations of continuance of the military junta rule given that the Union Solidarity and Development Party (USDP) a military supported party is in power and there is no worthwhile opposition in the parliament. While this may be true there is some difference with overall responsibility now with the President and the parliament. This small change would have to be acknowledged and step by step reforms proposed rather than expecting wholesale transformation which would be destabilizing.

The next steps of transition may be more important given that these would indicate reduction of influence of the junta brass as at present there are some reports of differences between reformists led by Thein Sein, Lower House Speaker Shwe Mann and Commander-in-Chief Min Aung Hlaing and hard-liners led by First Vice-President Tin Aung Myint Oo, Information and Culture Minister Kyaw Hsan, Finance Minister Hla Tun and Upper House Speaker Khin Aung Myint. In case the hardliners feel that President Thein Sein is moving too fast the possibility of a power struggle breaking out cannot be ruled out.

Meanwhile heavy fighting broke out between the Myanmar Army and Kachin Independence Army (KIA) in northern Shan State as forces launched a massive four-day offensive. The KIA Brigade 4 headquarters at Loikang, near Kutakai Township has reportedly fallen to government forces on 27 September. The offensive is being launched by 5 battalions of the Army aided by 120mm, 105mm and 80mm artillery fire. Reinforcements have also poured in Myitkyina and Bhamo townships of Kachin State, indicating further military offensives towards KIA bases in the region. The KIA has an estimated 10,000 troops with 4,000 of them under the command of KIA Brigade 4 based across northern Shan State.

The tension on Myanmar’s North Eastern border with China is increasing and even as there are a spate of projects hydro, pipeline and roads/ railway that are being undertaken there is growing resistance. While some conflict is a normal part of the growth process strong arm action taken by Myanmar’s security forces is likely to have a back lash with insurgency already raging in Kachin and Chin areas over a period. The Myanmar government is also roping in Aung Suu Kyi to talk to the rebels knowing importance of the projects to the Chinese as well as overall growth of the country but she has been reluctant so far and it remains to be seen if she would like to throw her weight behind these projects.