Obama says optimistic on change in Myanmar, meets Aung San Suu Kyi

NAYPYIDAW - US President Barack Obama said on Thursday he is optimistic about political change in Myanmar but that more work was needed to push forward with reforms.

Myanmar emerged from international pariah status when a semi-civilian government took power four years ago and initiated a wave of liberal change after nearly half a century of military rule.

But the pace of change has stalled, and Obama said this week the country was "backsliding" on some reforms. "I'm confident there will be a completely new day for Myanmar," Obama told reporters after meeting law makers in the country's capital, Naypyitaw. "The work is not done here."

The substantial power still held by the military, which is handling the transition to democracy, was one of the key questions that needed to be dealt with, Obama said.

The military holds 25 percent of seats in parliament, giving it veto power over constitutional amendments.

Obama did not say whether he discussed constitutional reform with the members of parliament. Among the group was opposition leader and Nobel laureate Aung San Suu Kyi, who is not eligible to become president under the existing constitution.

Obama will meet Suu Kyi again on Friday at her home in Myanmar's largest city, Yangon. She and other politicians made no comment after the meeting.

"It was excellent discussion about this transition taking place in Myanmar around consolidating some of the gains that have been made," Obama said of the talks. "But also pushing further to institute a genuine democracy here in this country that can serve the needs of all of its people."

How to protect minority rights was another key issue in the reforms, Obama said.

The persecuted Muslim Rohingya minority faces a humanitarian crisis in western Rakhine state, and US officials on Thursday called for Myanmar to draft a new plan to allow them to become citizens.

Shwe Mann, who holds the powerful position of parliamentary speaker of the lower house, was in the group of lawmakers that met Obama. He is tipped by some as a contender for the presidency when Myanmar holds a general election in 2015.

Obama was then set to raise a series of powderkeg rights issues in a meeting with his Myanmar counterpart Thein Sein - a former general who has led the reforms - late Thursday after the East Asia Summit closed.

Obama has framed Myanmar's reform process as an example of the positive effects of US engagement.

His administration has in recent years made a major foreign policy "pivot" towards Asia and - until now - Myanmar's baby-steps towards democracy have been trumpeted as a success for that strategy.

Most Western sanctions on Myanmar were dropped as it released political prisoners and loosened draconian press censorship, allowing a flurry of investor interest in the country seen as an exciting untapped market.

But, with the military still holding dominant positions and ethnic tensions flaring, questions have been raised around the world over whether the democratic process can be completed.

Activists have complained about the prosecutions of protesters and journalists, and the military shot dead one reporter last month in a volatile border area - a killing referenced by Obama in his Irrawaddy interview.

Suu Kyi is also barred from the presidency due to a clause in the constitution that is widely regarded as having been written for her - it rules out people with foreign spouses or whose children are foreign citizens.

Suu Kyi's husband, who died in 1999, was British and they have two sons.

Suu Kyi is campaigning to change the constitution ahead of elections next year, and a debate on the issue began in parliament on Thursday.

Obama will hold more in-depth discussions with Suu Kyi on Friday in the commercial hub of Yangon, followed by a joint press conference.

International concerns have overshadowed what Myanmar's government had hoped would be a celebration of the nation's democratic achievements this week, as it welcomed its biggest gathering of world leaders since the reforms began.

Thein Sein hosted the heads of the other nine members of the Association of Southeast Asian Nations (Asean) for an annual summit on Wednesday.

Asean was then joined by Obama and leaders from Japan, China, India, Australia, China, Russia, South Korea and New Zealand for the East Asia summit on Thursday.

Obama is in the midst of a hectic Asia-Pacific tour that started in Beijing for the Asia Pacific Economic Cooperation (Apec) summit, during which he announced a surprise climate deal with Chinese President Xi Jinping.

He will travel to Australia on Friday for the G20 summit.