By Jason Szep and Aung Hla Tun
YANGON (Reuters) - As long-isolated Myanmar opens up, its people are flexing their newly democratic muscles and testing the boundaries of freedom in a series of protests over chronic power outages.
On Tuesday evening, several hundred people in the commercial capital Yangon marched at Sule Pagoda, the focal point of demonstrations in 2007 and 1988 that were crushed by the military which ruled for half a century until last year.
About 1,000 people protested for a third straight evening in northern Mandalay, Myanmar's second-largest city, the biggest demonstrations since a 2007 monk-led uprising in which dozens were killed and hundreds arrested.
The protests pose a difficult test for reformist President Thein Sein who has freed hundreds of political prisoners, relaxed state censorship, started peace talks with armed ethnic groups and held historic by-elections that catapulted Nobel Peace Prize laureate Aung San Suu Kyi's opposition party into a semi-civilian parliament.
His government also approved a bill authorizing peaceful protests in the former British colony also known as Burma.
"The government is in a very difficult position now," said Aung Thu Nyein, a Burmese economist who moved to Thailand after participating in demonstrations in Myanmar two decades ago.
"These protests are both a sign of dissatisfaction about public services and how the opening of democratic space is making interest groups more active than before."
But the demonstrations have gone smoothly with no arrests, and no unrest. In Yangon, police watched as protesters stuck white candles in front of a gold Buddhist shrine, chanting prayers for electricity, but they did nothing to stop them.
The protesters accuse the former military government of enriching themselves at the public's expense by selling natural gas to neighboring China while Myanmar, among Asia's poorest nations, faces frequent power outages. They want the new government to amend those deals, so more natural gas can be used domestically to offset the shortfall.
"Our country is abundantly rich in natural gas but the former military regime sold it to foreign countries without any consideration for the people," said Ko Htin Kyaw, a 49-year-old activist after laying a candle under the glowing golden stupa.
"Now the present government, being elected by the people, should try to do something to amend these unfair agreements so enough electricity can be supplied inside the country."
The protesters in Yangon were nearly outnumbered by enthusiastic crowds of Burmese media covering an event that would have been off limits to local journalists for decades.
As the protesters walked around the pagoda, they were trailed by dozens of clicking cameras. Hundreds of onlookers gathered outside the pagoda, blocking traffic, to watch the rare site of a protest held freely without police intervention.
The rallies began Sunday night in Mandalay. They spread to Monywa, about 130 km (80 miles) to the northwest, on Monday and then to Yangon, the commercial capital, on Tuesday. Activists used social networking site Facebook to get the word out.
About 50 protesters were briefly questioned by authorities in Mandalay, said Thein Aung Myint, 39, an organizer of the Mandalay protests.
"The police asked us who was behind us and the purpose of the protests. I told them nobody was behind us. We just staged the protest to demand enough supply of electricity."
No one was arrested, he said.
State media sought to explain the outages, which have reduced supplies to just four or five hours of power a day in Mandalay.
It said Myanmar had 18 hydro-power stations, one coal-fired power plant and 10 gas-fired power stations supplying the entire country of 60 million people. Those plants have been generating about 1,340 megawatts during a recent drought — while power consumption has been as high as 1,850 megawatts.
A bomb blast blamed on ethnic Kachin rebels at a power plant reduced supplies even further, by about 200 megawatts, state media said, citing data from Ministry of Electrical Power-2.
"Because of the drought, it's highly unlikely to be fixed soon," said Aung Thu Nyein, the Burmese economist.
Plans were under way, the government said, to build more plants in a project with U.S. conglomerate General Electric Co and construction and mining-equipment maker Caterpillar Inc.
Both companies have said they would like to expand in Myanmar following a suspension of U.S. sanctions last week.
(Additional reporting by Martin Petty; Editing by Rosalind Russell)