The United States has eased financial sanctions on Myanmar to enable private U.S.-based groups to do charity work in the impoverished country.
The Treasury Department's action Tuesday is the first of a series of rewards from Washington in response to the military-dominated country holding special elections this month that were swept by the opposition party of Aung San Suu Kyi.
The changes are intended to support development and humanitarian assistance. Five decades of military rule turned what was once among the most prosperous nations in Southeast Asia into its poorest.
Treasury eased restrictions on financial transactions in support of private groups working on areas such as democracy-building, health and education, sport and religious activities.
Over the past three years, the Obama administration shifted from the long-standing U.S. policy of isolating Myanmar, and has said it will "meet action with action" _ gradually easing sanctions to reciprocate the government's reforms.
Last week, the U.S. formally lifted its opposition to the U.N. Development Program having normal operations in the country. The U.S. also plans to send a full ambassador for the first time in more than two decades, and to ease restrictions on American investment and the export of other financial services. The U.S. retains tough trade sanctions.
The advocacy group U.S. Campaign for Burma backed Tuesday's changes, but said it would be too soon to ease the ban on investment and financial services, fearing changes could be exploited by the military and its cronies.
The group's executive director, former political prisoner Aung Din, said the opposition would have only a small voice in Myanmar's parliament until full national elections in 2015. He said Western nations should keep their toughest restrictions in place for now.
Various governments have emulated the U.S. engagement with Myanmar's government, hoping to strengthen the hand of reformers in the country also known as Burma and dilute the influence of military hardliners.
Australia on Monday said it will lift financial and travel restrictions for more than 260 people in Myanmar, including President Thein Sein, but will keep its arms embargo and sanctions against around 130 other people, including military officials.
Next week the European Union is expected to discuss suspending its economic sanctions _ an idea endorsed by Suu Kyi when she met with British Prime Minister David Cameron in Yangon last week. Such a step by the EU could put pressure on the U.S. to do likewise, for competitive business reasons.
The Center for Strategic and International Studies, a Washington-based think tank, said the U.S. is likely to ease investment restrictions in sectors such as tourism, agriculture, telecommunications and banking. But it would retain bans on sectors such as natural resources and precious stones perceived to be closely linked to the military. Oil, natural gas and timber are key money earners for Myanmar.
Lifting sanctions entirely will be contingent on the government consolidating the reforms. The military remains the dominant political force in the country and severe rights abuses are still reported in ethnic minority regions. Despite the release of hundreds of political prisoners in recent months, others remain in detention.