Obama vows to lift Myanmar sanctions as Suu Kyi visits

Welcoming her for the first time since her historic election victory last year, Obama announced a series of steps to coax the rapidly transforming southeast Asian country -- also known as Burma -- from decades of economic isolation.

"The United States is now prepared to lift sanctions that we have imposed on Burma for quite some time," he said, adding that the move would come "soon."

"It is the right thing to do to ensure that the people of Burma see rewards for a new way of doing business."

In a letter to Congress, Obama also announced plans to reinstate preferential tariffs for Myanmar that were suspended more than two decades ago amid rights abuses by the ruling junta.

The White House is keen to help the country's economy and Suu Kyi's administration -- which is managing a difficult transition from military-run pariah to full-fledged democracy.

Although its constitution technically bars the 71-year-old Nobel Peace Prize laureate from heading Myanmar's government, she received a leader's welcome in Washington.

After talks with Obama, Suu Kyi took part in a coveted Oval Office grip-and-grin photo shoot.

Obama turned to the once-imprisoned former opposition leader, offering his "congratulations on the progress that has been made."

"It's a good news story in an era when so often we see countries going the opposite direction," he said, acknowledging that much work remains to be done.

Suu Kyi is officially foreign minister and self-appointed state counsellor -- a role akin to prime minister.

After spending much of the last few decades under arrest, she is now de facto leader of a skeletal government, an economy hollowed out by decades of kleptocratic dictatorship and a country riven with ethnic and religious violence.

The veteran campaigner must tackle all those problems while keeping an eye on generals who may have second thoughts about reform.

US officials, who acknowledge Suu Kyi is working under some very tough political constraints, dare not push the military or the public too far or too fast.

"She has to tackle problems one by one" said Ben Rhodes, a key Obama aide who has spearheaded the administration's Myanmar policy.

- Leverage and sanctions - Obama did not say when he would rescind an executive order underpinning broader sanctions that declares Myanmar a "national emergency."

Although some curbs on ties to the military and some individuals will probably stay in place, scrapping the order would bring clarity to US companies considering business there.

Washington lifted a host of financial and trade embargoes on state-owned banks and businesses in May, but US firms have remained cautious.

Some policymakers worry lifting sanctions completely could weaken American leverage and may let the military off the hook.

There is still no civilian control of the military and officers are guaranteed a quarter of legislative seats.

Global Witness and other human rights groups have criticized Obama's move as "a major setback for efforts to clean up Myanmar's notoriously corrupt and abusive business environment."

"Lifting restrictions before the new government's reforms have borne fruit effectively invites US companies to do business with some of the worst figures from the country's past."

Suu Kyi has disappointed some of her more zealous Western supporters by following the junta's lead on some issues, especially refusing to recognize the Rohingya -- a persecuted Muslim minority group in the overwhelmingly Buddhist country.