Bernard Kouchner, who is touring Asia to press for change in Myanmar, said the fund could be financed by the World Bank and based on one used to help with the reconstruction of Kosovo.

International sanctions imposed on Myanmar following last month's crackdown on pro-democracy protesters have had limited impact and should be complemented by incentives, he told the Foreign Correspondents Association in Singapore.

At least 13 people were killed when soldiers fired on the demonstrators, and thousands more were arrested.

European Union foreign ministers earlier this month approved new sanctions against the regime in Myanmar, formerly known as Burma, including an embargo on the export of wood, gems and metals.

'Do you believe that it (sanctions) will be enough? No. Will it be useful? I hope so,' Mr Kouchner said.

'But certainly, we also have to work on a political offer and incentives to be part (of efforts in dealing with) Burma, the Burmese people. This is much more difficult than having a decision on sanctions.'

He offered few details of his proposal, but said the fund could be sourced from institutions such as the World Bank and used to finance trade and development.

Mr Kouchner said British Foreign Secretary David Miliband had already expressed support for the idea of a fund to help the people of Myanmar, which could be achieved with the support of the European Union, the United States, Japan and Southeast Asian states.

He added it would be difficult for the Myanmar people to deal directly with the World Bank and there was a need for a 'go-between', a role that could be filled by non-government organisations working in Myanmar.

'This is not easy, but this is a bit more hopeful than offering the stick and not the carrots,' he said.

'We did it in Kosovo,' said Mr Kouchner, who was the UN chief for the Serbian province between 1999 and 2001. 'We had this trust fund... and it was difficult to get but it was very efficient.'

A Special Trust Fund for Kosovo, financed from the World Bank net income, was part of a strategy to help in the reconstruction and recovery effort of Kosovo. -- AFP